George Peabody

• Born: February 18, 1795
• Birthplace: South Danvers (now Peabody), Massachusetts
• Died: November 4, 1869
• Place of death: London, England

American banker, merchant, and philanthropist

Peabody amassed his fortune as one of the first investment bankers, and he then used his wealth to aid people in the United States and London. Generally recognized as the first American philanthropist, he funded schools, museums, cultural institutes, and housing projects.

Sources of wealth: Banking; trade

Bequeathal of wealth: Charity; educational institution

Early Life

George Peabody was the son of Thomas Peabody and Judith Dodge Peabody, both of whom were from Massachusetts families of English dissenters. Thomas Peabody, a leatherworker and small farmer, could not support his large family. At eleven, George, the third of eight children, was apprenticed to John Proctor, who ran a general store. Here Peabody learned to keep accounts, write clearly, serve customers, and appreciate those who helped him. Proctor valued Peabody as a conscientious worker and offered him a paid position when his apprenticeship was completed. However, Peabody chose to explore other possibilities, moving to his grandparents’ farm in Vermont, where he worked with his grandfather and met his sea captain uncle who impressed upon him that there were other possibilities in life. At age fifteen, Peabody returned to work in his brother’s drapery shop in Newburyport, Massachusetts. This business failed because of a widespread, local fire, and Peabody began looking for a new position.

First Ventures

Peabody’s first successful business venture resulted from an opportunity presented by an uncle, Colonel John Peabody. Recognizing the charisma and good work habits of this young man, Colonel Peabody invited his nephew to join him in establishing a general store in the Georgetown area of the District of Columbia in 1812. This business thrived, despite the impact of the War of 1812 upon the area. While young Peabody prospered, Colonel Peabody became mired in debt and had to give up the store.

While working with his uncle, Peabody served as a volunteer soldier in the auxiliary in the War of 1812. There he met Elisha Riggs, a merchant and banker, who was so impressed with the young man that in 1814 he invited Peabody to join him in a partnership in which Riggs was the major investor. According to Peabody’s records, after five years the firm earned a profit of $70,709.24, a figure reflecting the partners’ success and Peabody’s habit of keeping precise records. In 1816, the partners decided to move their business to Baltimore, Maryland, which at this time was second only to New York City as a commercial center. By 1827, the business had greatly expanded, and Peabody frequently traveled to Europe in order to develop markets and buy products. In so doing, he cultivated important business associations and learned about world trade. The partners renamed the company Riggs, Peabody and Company and developed branches in Philadelphia and New York City.

Mature Wealth

By 1829, Riggs withdrew from the company and moved to New York City, where he became an investment banker. Peabody became partners with Riggs’s nephew, Samuel Riggs, and changed the name of the company to Peabody, Riggs and Company, a firm that bought and sold products in Europe, the United States, and China. By the end of the 1830’s, the company’s focus was shifting from simply buying and selling products to financing the production and distribution of goods manufactured by other companies. Having traveled to Europe frequently by 1837, Peabody established himself in London. He gave up the dry goods business altogether and became a merchant and investment banker. By 1842, Samuel Riggs had left the firm, which was renamed George Peabody and Co.

Peabody earned a reputation for being a shrewd and honest businessman. He dealt largely in foreign exchange and American securities. American states had looked to Europe, especially London, to borrow money. In 1837, America experienced an economic crisis that caused individual states to repudiate interest on their loans and sometimes fail to repay these loans. Peabody was distressed to see this financial embarrassment of his countrymen, and he worked to restore confidence in the American states. To this end, he invested heavily in the states’ securities, simultaneously working to promote American enterprises in Europe and urging the states to preserve their commercial honor. At one point he labored to sell bonds for the state of Maryland in order to finance construction of the Chesapeake and Ohio Canal. He finally persuaded Baring Brothers, the wealthiest banking house in Europe, to accept the states’ securities, a deal reflecting his persuasive powers and trustworthy reputation.

Peabody lived a modest lifestyle, but he believed in presenting a positive image. He wore fine clothes and entertained with style. He eagerly welcomed Americans to London and eased their way into business or society. During any given week he took as many as eighty American visitors to dinner and thirty-five people to the opera. In 1851, England planned the Great Exhibition of Works of Industry. When Peabody learned that the United States was sending representatives but did not plan to exhibit America’s important new inventions, he undertook to pay for the effective presentation of such products as Samuel Colt’s revolver, Cyrus Hall McCormick’s reaper, and Richard March Hoe’s printing press, all of which astounded exhibition visitors. In the same spirit of fostering goodwill, Peabody began hosting huge Independence Day dinners, with the first one attended by the duke of Windsor.

From his youth, Peabody felt a strong sense of responsibility for those close to him, an ever-expanding circle of people. He supported his family from his first apprenticeship, and he supported Colonel Peabody’s family after the colonel’s death. He contributed to fire victims in his hometown, and he aided his first employer, Proctor, in old age. He paid for his nephews and nieces to attend college and graduate school. Appalled at the desperate condition of the Irish people during the potato famine, he paid for grain to be delivered to the hungry. Having had little education himself, Peabody supported not only the education of his family but also the education of others, funding scientific studies, libraries, museums, lectures, and teacher training. In London, he created a fund to build housing for the poor.

As Peabody’s company thrived, he began to look to the future and to retain a new partner. He found this person in Junius Spencer Morgan, who joined his firm in 1854. After Peabody’s death, Morgan’s son J. P. Morgan would become a partner in the firm that became J. P. Morgan and Company.

As Peabody grew older, he became increasingly interested in ways to divest his wealth for the optimum benefit of humankind. He made extended trips to the United States in the last years of his life, visiting his many friends and relatives and developing philanthropic plans. He was esteemed and honored in both the United States and Great Britain. Grateful citizens of London erected a statue to him in the city’s financial district, and Queen Victoria presented him with a letter of gratitude and her portrait. He received the Freedom of the City of London award. When he died in London in November, 1869, he became the first American to be honored with interment in Westminster Abbey. At his request, his body was to be buried in his family plot in Salem, Massachusetts, and his body was moved to the United States. The British and American navies vied for the honor of transporting his remains. In a compromise, his coffin traveled across the Atlantic in a British warship, The Monarch, escorted by an American warship.

Legacy

Peabody, considered the first American philanthropist, became a model for others. He established the first philanthropic foundations in England and America. In Baltimore, he advised and inspired Johns Hopkins and Enoch Pratt, who respectively financed a university and library for this city. Other philanthropists also followed Peabody’s lead.

Peabody himself funded the Peabody Institute in Baltimore, the first cultural center in the United States, which provided a public library, lyceum, music conservatory, art gallery, and monetary awards for outstanding students. He established the Peabody Education Fund, designed to reinvigorate education in the South after the Civil War. The George Peabody College for Teachers, now merged with Vanderbilt University, remained a leading school for training teachers into the twenty-first century. He created the Peabody Institute in what is now Peabody, Massachusetts, and he endowed museums and chairs in natural science and anthropology at Yale and Harvard Universities, respectively. In London, he built Peabody Homes, a multibuilding complex that in the twenty-first century continued to provide thousands of homes for the working poor. His assistance to his nephew, Othniel C. Marsh, enabled Marsh to become a world-renowned paleontologist.

Bibliography

Jones, Frank N. George Peabody and the Peabody Institute. Baltimore: The Peabody Institute Library, 1965. Helpful booklet describing the history of the Peabody Institute in Baltimore.

Parker, Franklin. George Peabody: A Biography. Nashville, Tenn.: Vanderbilt University Press, 1971. Fulsome, engaging study of Peabody’s life, philanthropy, and legacy.

Shatzkin, Kate. “Tribute to City Charity: Baltimore’s Philanthropists Are Honored at Mansion Once Owned by Johns Hopkins.” Baltimore Sun, September 11, 2001, p. B3. Describes the tradition of philanthropy in Baltimore started by George Peabody.

Stiehm, Jamie. “Beginning a New Chapter, Hopkins: The George Peabody Library Reopens with a Renewed Interest on Its Public Mission.” Baltimore Sun, May 11, 2004, B1. Describes the George Peabody Library of the old Peabody Institute as it had evolved by 2004.