- Historic Sites
The First Great Cheerful Giver
George Peabody made fourteen million dollars and gave nine million away —with no tax deductions to urge him on
June 1966 | Volume 17, Issue 4
Thus awakened to the pleasures of philanthropy, the banker went on to revisit Baltimore and to present it with a Peabody Institute. His initial gift was $300,000, which he eventually increased to $1,500,000. His founding letter to the trustees called for an extensive library; a lyceum for lectures on science, art, and literature; a “Gallery of Art in the department of Painting and Statuary”; an Academy of Music with “a capacious and suitably furnished saloon” (today the Peabody Conservatory of Music); and “ample and convenient accommodation for the use of the Maryland Historical Society.” Peabody was a practical man of his time, and his letter reveals a double standard of rewards as applied to the sexes. It provided for an annual grant of $1,200, of which §500 was to be awarded in cash prizes of from $50 to $100 each to “graduates of public Male High Schools adjudged most worthy, from their fidelity to their studies, their attainments, their moral deportment, their personal habits of cleanliness and propriety of manners”; $200 was set aside for ten $10 gold medals and twenty $5 gold medals to reward female high-school graduates for similar virtues. The remaining $500 was to be given to meritorious School of Design graduates of the Mechanics Institute of Baltimore. The Institute itself, Peabody’s third biggest single benefaction, was completed in 1861 but the Civil War postponed its opening until 1866. Its treasurer was Enoch Pratt, a wholesale-iron millionaire who, like Johns Hopkins, became a philanthropic disciple of Peabody’s. In the 1880’s, he presented the city of Baltimore with a $1,000,000 Pratt Free Library.
During the Civil War, Peabody invested some $9,000,000 in Union bonds. Although his influence in Great Britain was on the side of neutrality, his early days in the South had left him without animus. “Never during the War or since,” he said when it was over, “have I permitted the contest or any passions engendered by it to interfere with the social relations and warm friendships which I have formed for a very large number of the people of the South.” His establishment of the Peabody Education Fund in 1867 was influenced by this regional interest. He had retired from business in 1864, when he turned George Peabody Sc Company over to its younger partner, Junius Spencer Morgan, who changed its name to J. S. Morgan & Company. Morgan’s son John Pierpont had worked in the Peabody firm for a year in 1856; and his subsequent banking houses in New York presently acted as the American representatives of J. S. Morgan.
Thus the man who gave J. P. Morgan his first job and whose bank was the progenitor of the House of Morgan was close to seventy when, for the first time in his life, he was free to act as a full-time humanitarian. Actuated by the postwar impoverishment of the southern states, the concomitant collapse of education there, and the pressing needs of the emancipated slaves—and particularly their children—Peabody set up the Education Fund “for the promotion and encouragement of intellectual, moral, or industrial education among the young of the more destitute portions of the Southern and Southwestern States of our Union.” It was endowed, on the books, with $3,500,000, but $1,500,000 of this was invested in Mississippi and Florida state bonds that never paid their coupons and were eventually repudiated. It divided its income between the promotion of free public schools and the professional training of teachers. It awarded scholarships in all the southern states (those in Mississippi and Florida were withheld until 1892), and in 1875 it created the State Normal College in Nashville, Tennessee, which in 1889 became the Peabody Normal College and in 1905 the George Peabody College for Teachers. The founder had stipulated that the Fund might be terminated after thirty years; actually, it continued for forty-seven, until 1914. Its residue was divided, unequally, between the George Peabocly College and the John F. Slater Fund, set up in 1882 lor industrial education for Negroes—the Slater Fund got $350,000 and Peabody college got $ 1,500,000, to which the Rockefeller-founded General Education Board afterward added many millions. “Of all [Peabody’s] gifts,” President Calvin Coolidge wrote in 1926, “the most remarkable was the Peabody Education Fund. … George Peabody, who has been called ‘the father of modern educational philanthropy’ … was a pioneer. He blazed the trail. He pointed out the path.”
Queen Victoria might have challenged the first part of this statement. Was the Education Fund any more remarkable than the £500,000 Donation Fund, established in 1862 for the purpose of slum clearance and “the building of lodging-houses for the laboring poor of London"? Several blocks of buildings were erected and the laboring poor invited in at an average room rental of two shillings sixpence a week. “The London press with one accord proclaimed the gift as unparalleled in the history of the world,” the Reverend O. S. Butler observed in 1895, at a centennial celebration of Peabody’s birth. “The whole nation joined in a chorus of praise and thanksgiving, from the throne to the poorest hamlet in the realm. The children of poverty clapped their bony fingers and shook their emaciated forms with wild delight, to realize that one man was found that remembered the poor. In our own country the news was received with unmingled satisfaction.”