Dissension within Sigma Delta became apparent on October 30, 1863, when George Brainerd tendered his resignation to the society. The resignation was unanimously declined, but it contributed to a rift that would not heal. On that same day, due to a seeming desire of some of the members to bust up Sigma Delta and try to become part of another organization, Samuel Buel suggested that Sigma Delta try to obtain a charter from some large and flourishing society such as Sigma Phi, which had been founded in 1827 at Union College and had six chapters at the time. He had previously had an interview with a minister who belonged to Sigma Phi, who assured him that he favored such a move. He promised to do all in his power to help them obtain a charter. Sigma Phi sent representatives to Troy who were entertained and had their hotel bills paid.

A petition was prepared and submitted to Sigma Phi, but at its convention at Union College on March 4, 1864, a motion was adopted to the effect that no more charters be granted. Since no action was taken on Sigma Delta's petition, this was accepted as a refusal.

Dissension in Sigma Delta continued to grow such that two factions sprang up within the society. The eight members who ultimately founded Theta Xi considered such divisiveness incompatible with their ideals of unity and fellowship. They determined to build anew with the intention of forming a society national in scope - a tall order for the Civil War era!

The ill feeling became more acute after the failure to obtain a charter, and at a regular meeting held on March 11, 1864, attention was called to the sad condition of the society. A suggestion was made that each one present express his views concerning the management of the affairs and offer some plan of removing this feeling which has existed, and does now exist, among us. This suggestion was accepted and each member in turn was called upon for his opinion. One suggested plan, which met with instant favor and was finally agreed upon, specified that bottles, suitably covered and labeled, be provided and placed in the adjoining club room.

On March 12, 1864, two large cups of white and black beans were provided for the purpose of voting. A bottle was placed upon the table and each member went into the clubroom to cast his ballot on the member whose name appeared on the bottle. After everyone had voted the bottle was sealed, and the next vote taken. When the process was completed, the members assembled in the club room to count the votes. Before any bottle was opened, each man deposited on the table the keys and all other property in his possession which belonged to the society. The bottles were emptied alphabetically and, as one received a majority of black beans, he took up his hat and left. The first person who received a majority of black beans remarked, "I guess I am not wanted here." Four of our eight founders had opened their bottles before the five who received a majority of black beans left them in possession of the room. A new lock was immediately put on the door.

At a meeting held on April 1, 1864, a committee consisting of Waite, Buel, Brainerd, and Packard was appointed to prepare a constitution. At this meeting the secretary was instructed to recall their petition to Sigma Phi and inform them of their intention to form a new society. On April 6, Buel presented two monograms, Theta Xi and Theta Psi, as possible names for the new society. Theta Xi was chosen because of the reported existence of a local society called Theta Psi at Yale at that time. On April 29, 1864 - that most sacred night in the history of our brotherhood - eight former members of Sigma Delta met in their secret rooms for the purpose of founding Theta Xi. Ralph G. Packard was chosen chairman because he had been president of Sigma Delta at the time of its dissolution. Brother Farnum was requested to act a secretary. A committee made up of Brothers Buel and Brainerd was designated to develop an initiation service, while another committee comprised of Brothers Raymond, Starbuck, and Brainerd was made responsible for developing a grip, various symbols, and names of the officers, as well as for completing all vacancies in the constitution. The Constitution, By-Laws, and Rules of Order which had been drawn up by the committee were read and adopted without a dissenting vote. The oath of initiation was taken by all the Founders as a group, then they signed the Constitution alphabetically and by classes. The new society decided that the chapter be called the Alpha Chapter of Theta Xi, and that each succeeding chapter should be named by the following letter of the Greek alphabet. On the same night Edward H. Morrison was unanimously selected as the first new member of the Fraternity, and was initiated eight days later on May 7, 1864.

In the first forty years of its existence, the Fraternity had founded six new chapters located within approximately two hundred miles of RPI. It was not until 1905 that Theta Xi began its westward expansion with the chartering of Theta Chapter at Purdue in February of that year and Iota at Washington University in St. Louis a month later. The Fraternity established its first West Coast chapter in 1910 with Nu Chapter on the Berkely campus of the University of California; moved into the Southwest three years later by locating Rho Chapter at the University of Texas and entered the Pacific Northwest in 1915 by establishing Upsilon Chapter at the University of Washington. Theta Xi's introduction to the South occurred in April, 1921 when Alpha Alpha Chapter was chartered at Louisiana State University. In less than sixty years the dreams of our Founders had become a reality. Theta Xi had become a national organization.