Roles and permissions

Jon,

Yes, that's the default position.
But you have (at least) two ways round this.

1. You can designate one teacher as Course Creator within a course category.
This gives that user the ability to create new courses in the category (or sub-category), AND allows him/her to grant the Teacher role to other users.

2. Go to Site Administration->Users->Permissions->Define Roles
and click the Allow Role Assignments tab.
There you can find the Teacher row and tick the box in the Teacher column.
This is a global setting so that ALL Teachers will be able to add ANY users as Teachers to any of the courses that they are already Teachers on...
...and these new Teachers will have the same ability!!!

Regards,

John