in 1868, baker was reelected to the position of governor, defeating thomas hendricks by 961 votes, the closest in state history. during his administration, a women's prison was built, and a soldiers' home to assist the returning veterans and the indiana state normal school in terre haute were constructed. other school institutions were built during his term using federal funding provided by the land-grant system. along with private donations, the money was used to start purdue university. baker signed the law to create the school in 1869, and it opened just after his term ended. another of baker's acts as governor was to establish the governor's portrait collection. the assembly agreed to spend up to $200 per portrait for the creation of the collection. baker then hired painters and sought out the families of the former governors to procure photos and paintings from which official portraits could be created.