In view of the widespread attention given to endowments of colleges and universities in recent decades, this historical essay explains how the importance of endowment, the emphasis upon increasing it, the competition for it, and even its current meaning originated between 1890 and 1930. This development established an upper tier of wealthy universities that maintained their elite status through the ensuing century, thereby contributing to the stratification of higher education in the United States over the long term.

The author questions whether the tension between what is "liberal" and what is "useful" is one of the oldest problems in education.

A review is presented of the differences between Matthew Arnold's and Thomas Huxley's views on liberal education.

The author argues that the graduate of the "artes liberales" (liberal arts) is the Roman orator, trained to defend persuasively the right and just, and not the person devoted to the Socratically-based introspective search for truth, as many contemporary academicians would maintain.

Liberal education in Japan, and specifically at Japan's Tenri University, is described. The conflicts between the society's need for well-rounded educated individuals versus well- educated specialists are noted.