James Smithson, the illegitimate son of the first Duke of Northumberland, died in 1829, leaving his estate to the United States of America for the establishment in Washington of an institution "for the increase and diffusion of knowledge."

By 1846, eight years had passed since Congress had accepted the half-million-dollar Smithson bequest, and what should be done with the money remained unresolved. "One gentleman wanted a library; another, an observatory; a third, common schools; a fourth, farming schools; a fifth, some other particular object," noted one exasperated congressman.

On February 28, Representative Robert Dale Owen of Indiana asked that the Smithsonian bill be made a special order of the day for the second Tuesday in April, "so that we at last escape the just reproach for receiving money for one of the best purposes on earth and then doing nothing with [it]." After two days of debate, a bill stripped of specific programs, including Owen's pet project for a teacher training institute, passed the House of Representatives. On August 10, in the hurry of adjournment, the bill passed the Senate without comment and was immediately signed into law. The act provided for a building "of plain and durable materials and structure without unnecessary ornament, and of sufficient size and with suitable rooms for the reception and arrangement of objects of natural history, a chemical laboratory and lecture room or rooms." A governing authority, called the Board of Regents, was composed of three members of the Senate, three members of the House of Representatives, six private citizens appointed by the Congress, and, ex-officio, the Vice President, Chief Justice of the United States, and Mayor of the District of Columbia. The specific activities of the Institution were left undecided.