OK, so clearly some of this is outdated, but regardless. Somewhere along the line things got much, much easier. I guess now when you remember a grand-parent that only had an eighth grade education, they were doing pretty well. I just feel a bit cheated for some reason.
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"Asleep at the switch? I wasn't asleep, I was drunk!" - Homer Simpson
God forbid that there should be old fashioned disclipline in our schools! Don't you know that the poor kiddies have the right to go around in drug gangs and carry/use weapons in the schools?
Today if an educator dare to disclipline a kid they are up
creek!
Whate
A pretty good discussion of its authenticity (exam definitely real, but intended for teachers rather than eighth graders) can be found at:
http://www.truthorfiction.com/rumors/1895exam.htm
Note that a completed exam is not mentioned (and indeed does not appear on any of the joke lists). barefootsworld.net probably found both the exam and a modern-day solution to the exam off the 'net.
Even if the exam were intended for eighth graders, I would still disagree that it represented a higher standard of learning. Much of it involves simple regurgitation (not understanding) and arbitrary rules.
The past is always seen through rose-colored glasses. Even those of us who are college-age seem to remember times when things were better (I put the peak of the world as I have experienced it at 1993). When you look at newspapers from a "better day," though, you quickly realize that though today's problems may not have existed, different but equally serious ones did.
Some of the answers were too pat, and some weren't even correct or complete. Also, given the problems that Kansas has had lately defending homegrown educational standards, I wonder if the publication of this exam isn't some sort of attempted compensation. FWIW, given the more current brou-ha-ha, I found it curious that creation theory was NOT mentioned...
Parts of the exam read like a Sherlock Holmes novel, where it is impossible to solve the mystery with the facts given. (Conan Doyle was notorious for such shortcomings.) The measures for a bushel are not included, nor is the weight of wheat given at any point in relationship to volume. If this were a fair exam, such information would be clearly stated. As it stands, such an exam would give a home-state bias towards teachers educated in schools where such knowledge was rote learning. Where might that be?... (hint, it might begin with a K).
The phonetics questions were also a tip-off that the exam wasn't aimed at eighth graders. While grammar and penmanship were held as important skills, phonetics was more the realm of "normal school" education.
The circulated story is even more outrageous, mixing units of measure:
"What is the cost of 40 boards 12 inches wide and 16 ft. long at $20 per metre" The metric system was legal in the U.S. at the time, but not required. To expect midwest students isolated from international trade to be able to convert metres into feet at that point in history is ludicrous.
I kind of liked: http://www.middleweb.com/gradexam.html
as an alternative.
The skill set for successful navigation of life, now, as in 1895, includes having a good sense for what is BS and what is fact.
Will, the whole drug gang in school routine is more of a problem of huge schools than lack of discipline, IMO. When school districts process children in factory schools, they get factory style problems. The overall quality of education is far inferior in these schools compared to small schools. Small classes allow the teachers to have more direct influence over individual students. This is something that was well known in 1895, but illusory cost savings changed the educational model to having centralized schools and larger grade segregated classes. Only recently have educators started to admit that big schools are a mistake for teaching basic skills, and the benefits of more expensive equipment don't match the benefits of individualized education.
One thing is for sure: I am smarter than the author of that test! 
Don't you suppose it's possible this was all common back then? If you were to ask my Grandfather, or any of his neighbors that are his age, he would be able to recite how many pounds are in a bushel of wheat, corn, apples, etc. It would kind of be like asking today's 8th graders how many cigarettes in a pack. It's common knowledge.
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"Asleep at the switch? I wasn't asleep, I was drunk!" - Homer Simpson