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Origins
Rishi Valley was born with the idea of starting a world university, conceptualized by Annie Besant, President of the Theosophical Society, in 1925. Three sites near Jiddu Krishnamurti's birthplace, Madanapalle were identified as possible locations for the school. At a site in Thettu Valley a Big Banyan Tree attracted his notice and he decided to build the school in the region surrounding the tree.

In 1926, Krishnamurti's colleague C.S. Trilokikar on his request went from hamlet to hamlet by bullock cart, buying land until a 300 acre campus had been assembled. By 1929 most of the land for Rishi Valley had been acquired. Trilokikar named the whole basin Rishi Valley, a name derived from legends about rishis, who were rumoured to live in the hills surrounding the valley, thousands of years ago. However, before the land was completely assembled, Besant abandoned the idea of a world university because there were more pressing matters of national importance for her, such as India's Indian Home Rule.

Relocation
The Guindy School was a school that was temporarily based in Madras and had been started by Besant in 1918, was a well recognized school and its first headmaster, G.V. Subba Rao (GVS) was a young and renown theosophist. Space in the Guindy School was limited, the neighbourhood was noisy and crowded and each year the torrential Northeast Monsoon would cause havoc, destroying the school's thatched roofs and blowing down its cottages. After a particularly bad cyclone in late 1930, destroyed much of the Guindy School Krishnamurti met GVS, and it was decided that Guindy would be be relocated to Rishi Valley.

The building of the initial structures was undertaken by the Theosophists who were drawn to Krishnamurti's teachings. Many engineers were brought in to oversee construction work on campus, all of whom refused to accept pay. By September 1931, the initial structures were ready to accommodate the school. Shortly after this, Subba Rao relocated to their new campus with approximately ninety students and their teachers. Just as the moving was completed, an unprecedented 50 inches of rainfall graced Rishi Valley's parched landscape and the area was inundated with water. The inhabitants of the surrounding villages thought the coming of the school was a blessing and a sign of prosperity.

By 1934 the basic structures in the school had been built including the Senior School building which is still used today. Oil and petromax lamps were used for lighting till 1937 after which two dynamos began to provide electricity during the day. Students and Teachers also began tree planting in and around the campus during this period.

GVS as Headmaster (1931-1941)
Subba Rao's decade long tenure (1931-1941) was a pioneering one, with some of the teaching methods carried over from his experiences at the Guindy School. When he shifted to Rishi Valley, GVS became the first headmaster of an Indian boarding school. At Guindy, Tamil was the medium of instruction; at Rishi Valley,Telugu was added as a language of instruction. GVS laid the groundwork for the school by practicing a simple lifestyle that included meditation, a quiet life, austerity with material possessions, and harmony with nature. Indeed, the beautiful natural expanse of the valley provides for some quiet retreats for 'nature studies'--outdoor lessons as part of the timetable, which originated with GVS. On the sports field, he disallowed prize-giving ceremonies, as he felt it harboured unhealthy competition.

Finally, and perhaps most importantly, all senses of division were supposed to be eliminated: caste, gender, religion, and that of anything which might cause fractious relationships among students. This was important in a country on the brink of a new era in history—one in which the aim was secularism and social parity.

On 24 June 1941, an unforeseen police raid was conducted on the school. Some 'prohibited books' and 'leftist magazines' were seized because under the British these were banned books as they were thought to promote Indian independence. Many teachers were put under house-arrest, fined or were put under probation for three years. The Director of Public Instruction even forced two longstanding teachers to resign. As a result, Subbarao became 'dangerous' for proliferating such material during the heat of the freedom struggle and the wartime constraints Britain was facing at that time. The perpetrator of this incident was later found to be an unhappy senior student who tipped off the police about the presence of communist literature on campus. This unexpected event ended GVS's tenure as principal.

Unsteady Years (1941-1950)
The resignation of GVS had several consequences that brought the school to a standstill: expenditures were cut back sharply, co-curricular activities were curtailed and some of the best teachers left. This was also a period of transition at the school as several principals - Y.K. Shastri, K.A. Venkatagiri Iyer, Narayana Iyer and K. Srinivasa Raghavan came and departed quickly. At this time, Krishnamurti was in the United States and was only able to return to India in late 1947, after Indian independence. During this period Muriel Payne, an associate of Krishnamurthy gave a new direction to the school.. She came to Rishi Valley, influenced by Krishnamurti, in an attempt to revive it. Along with five others, she set up a group in 1948, which tried to gauge the situation and get the school back on track. This experiment ended abruptly and in July 1949 the curtains came down on Rishi Valley as an institution. Ms. Payne's experiment might have failed, but her interest in the school had not waned. She was instrumental in restarting the school under a new administration with F. Gordon Pearce, a noted educator, at the helm. Krishnamurti took a renewed interest in the school. New people were getting involved and a new kind of school emerged.

In July 1950, the school was officially reopened, with 15 pupils. The fees were reduced to a level so as to attract a wide range of students even though it put some pressure on the budget. To ensure a good start, the staff agreed to an initial lowered salary until the school became stabilized.It was up to Pearce to revitalize the school as its finances were low.

Pearce Years (1951-1958)
Within two years the school was running well with 110 fee-paying boarders as well as a waiting list for admissions. The student population was growing more diverse with 80% of students coming from northern, western and eastern India as well as some from overseas. During this period emphasis was put on high quality education and an effort made to acquire teachers of high calibre. Two of the best teachers at this time were David Horsburgh and Sardar Mohammad.

A lot of activities were also introduced during this period that are still followed in the school. Students could learn classical North Indian and South Indian music. International folk dancing was also introduced during this period by an American teacher David Young. Local folk dancing was brought in by David Horsburgh. Hiking, trekking and camping were also encouraged and teachers would often accompany students. One of Pearce's long lasting innovations at Rishi Valley was his introduction of 'astachal'. Children would gather together every evening, to sit quietly while the sun was setting on the Astachal hill. It was a time which gave children the opportunity for quiet reflection.He resigned on October 5, 1958 and went on to found two more schools in India.

Balasundaram Years (1958-1977)
Dr.S. Balasundaram was intially made a member of the Krishnamurti Foundation India in December 1955 and took charge of the Rishi Valley estate while simultaneously teaching at the Institute of Science in Bangalore. It was decided by Krishnamurti that Dr.Balasundaram should be made the new principal of the school after Pearce resigned in October 1958. He was principal of the school for almost two decades till March 1977.

It was during this period that Rishi Valley expanded in numerous ways. It was decided that Rishi Valley would be made a self-sufficient community in terms of food grains, fruit and vegetables which would be grown on the agricultural land attached to the school and also in terms of milk by reorganizing the school's dairy. The administration felt that Rishi Valley should not live in isolation from other neighboring communities and that a Rural Centre be formed which should help the surrounding villages with housing, health, adult education and also provide schemes for them in agriculture and dairying so as to improve the quality of life of the villagers. Various other efforts were made to provide schooling even to those who could not pay school fees with the help of government schemes.It was also seen that Krishnamurthy's philosophy was integrated as much as possible into school life.

A lot of advancements were also taken in terms of improving the infrastructure of the school. Many of the larger buildings - the Assembly Hall, the Senior Girls' and Boys' Hostel and the Dining Hall were built during this period. Enrollment was increased to 200 and with additional fees the school became financially stable for the first time.