June 1966 | Volume 17, Issue 4
George Peabody made fourteen million dollars and gave nine million away —with no tax deductions to urge him on
In a day when it is no secret that the very rich can, and do, practice philanthropy at bargain rates—about nine cents on the dollar, or, by a judicious transfer of stocks, paintings, or incunabula, bought cheap and appraised dear, at no cents on the dollar; or, indeed, with even better luck, at a profit—it requires a historical perspective to understand the mood in which the Western world reacted to the death in London of George Peabody on November 4, 1869. As a man who began to combine large-scale acquisition with large-scale distribution in the i85o’s, Peabody was the first great American philanthropist. At a time when the Astors, far richer than he, were giving little away, he was disposing of millions. Peter Cooper, to be sure, built and endowed The Cooper Union “for the advancement of science and art” during this decade, but his total bill was $900,000—a fraction of Peabody’s benefactions. Peabody munificently founded free libraries, museums, lecture halls, and musical conservatories, and he established the country’s first true foundation—the Peabody Education Fund, which helped put southern education on its feet after the Civil War. In the view of the late Dr. Abraham Flexner, an expert on funds and foundations, it was “the pioneer [fund] in the United States in combining private and unofficial with public and official endeavor. … To a considerable extent [it] determined the course that future educational benefactions would take.” It was after a conversation with Peabody on the pleasures of giving money away that Johns Hopkins made out a will leaving seven million dollars for a university and hospital. The trail that Peabody blazed was later followed, more lavishly but relatively no more generously, by Mrs. Russell Sage, Andrew Carnegie, Julius Rosenwald, the Fords, the Guggenheims, and the Rockefellers.
George Peabody was born in 1795 in South Danvers, Massachusetts, nineteen miles north of Boston, toward the end of an astrological period—on February 18—that all fellow Aquarians (socially minded, eager to improve the lot of the human race) will recognize as appropriate. During his lifetime, out of a fortune of approximately fourteen million dollars, he gave away some nine million for public purposes—without, of course, a penny of tax deduction for his largesse. He had made a great deal of his money in England, where he lived for the last three decades of his life, and he gave a great deal of it away in England; but he also gave much away in America, which he continued to think of as his home, never relinquishing his American citizenship.
The Peabody benefactions were not only generous; they were thoughtfully planned and thoughtfully set up. Stemming from principle rather than impulse, they were calculated to help people help themselves and to prevent poverty rather than cure it. And they were executed by able men, chosen by the founder. In England, for example, the early trustees of the £500,000 Peabody Donation Fund—established to build homes for the poor in London—included Charles Francis Adams, the American minister to Great Britain; Lord Stanley, the Postmaster General; and Junius Spencer Morgan, a Peabody partner in London who was the father of the first John Pierpont Morgan. In America, where the Peabody Education Fund had to work in a war-torn area sensitive to northerners, the Fund’s original trustees were drawn from North and South alike and included General Grant, Admiral Farragut, and the governors of New York, Massachusetts, Virginia, and South Carolina. Among successor trustees were Presidents Hayes, Cleveland, McKinley, and Theodore Roosevelt; J. P. Morgan, Anthony J. Drexel, Joseph H. Choate, and Bishop William Lawrence of Massachusetts. The Fund’s first general agent, or administrator, was Dr. Barnas Sears, who relinquished the presidency of Brown University to assume this post, and of whom the Dictionary of American Biography reports: His inauguration of the work for which the Fund was devised was perhaps the most important achievement of his career. The specific recommendations regarding the ends to be sought and the methods to be employed contained in his first report became the stereotyped policy of the trustees. In carrying it out Sears met a difficult and delicate situation with a patience, tact, and wisdom that won confidence and support in the South and ensured success.
The emphasis on housing and education of Peabody’s two major single philanthropies may well have reflected the fact that their author, in his youth, was poorly housed and modestly educated. He was born in a two-story, four-room, yellow frame house on the outskirts of South Danvers, the third son and fourth child (in a family of five boys and five girls) of Thomas and Judith Dodge Peabody. Although the family name was well known in New England, little is recorded of his father beyond the fact that he had fought in the Revolution. The boy who was to give $2,000,000 to southern education, $150,000 to Yale, $150,000 to Harvard, $60,000 to Washington College (now Washington and Lee), $25,000 to Phillips Academy (Andover), and $25,000 to Kenyon College, attended district “school between the ages of seven and eleven, where he did badly in arithmetic and well in penmanship. He was then apprenticed by his father to the neighboring general store of a Captain Sylvester Proctor, where four years of handling groceries and dry goods and bartering them for farm produce netted him thirty dollars and a suit of clothes. His next three business connections were still far from Rothschildian. At fifteen he worked for a year on the Vermont farm of Jeremiah Dodge, his maternal grandfather, performing such chores as clearing hillsides of sumac trees; the following year, 1811, he joined his brother David, twice his age, in a newly opened dry-goods store in Newburyport, Massachusetts. Shortly thereafter their father died, leaving their mother and several small children to support; the store was destroyed that same year in a great Newburyport fire; and George, at seventeen, moved on to Georgetown, in the District of Columbia, to clerk in another family dry-goods store, that of an uncle, John Peabody. Uncle John had already gone bankrupt once in the business; creditors were after him, and he installed his nephew, partly as a cover, as titular head of the business. In this reverse nepotism, George flourished. Within two years he was running the store, but his uncle’s situation made him apprehensive. In 1814, when Elisha Riggs, a successful competitor in the District, suggested a merger, George accepted. He had saved a little over a thousand dollars, which he invested in Riggs & Peabody, but if the capital was largely Elisha’s, the business genius was largely George’s. The firm began to export southern cotton to England and import finished goods to the United States. In 1815 it moved to Baltimore to acquire shipping facilities, and in 1822 it established branches in Philadelphia and New York. It was by this time a supplier of credit to facilitate the movement of cargoes by others. Peabody made his first trip to London in 1827. Two years later Riggs retired, leaving his partner in sole charge and well on his way toward a typical nineteenth-century American business metamorphosis—that of dry-goods merchant into banker.
This metamorphosis—subsequently exemplified in the careers of Henry Clews, Levi P. Morton, Junius Spencer Morgan, and the founding partners of J. & W. Seligman and Company and K’fchn, Loeb and Company—was dramatically highlighted in 1835. The state of Maryland, in severe financial trouble, appointed Peabody as one of three commissioners to negotiate loans. The merchant went to London and sold $8,000,000 worth of state bonds there, thus maintaining Maryland’s credit and upping his own. He refused a $60,000 commission and received a vote of thanks from the state legislature.
In 1837, the now-prosperous Peabody took the step that was to qualify him, geographically, for an impressive collection of British honors. He moved to London, where under the sign of George Peabody & Company he began to specialize in foreign exchange and American securities. The Panic of 1837 found him a heavy buyer of depreciated bonds of the American states at what turned out to be bargain rates. During the next few years, his firm became the leader in trading American securities in Europe and the house on which American letters of credit were most generally drawn. Meanwhile, Peabody himself became a kind of unofficial American ambassador. In 1851, when a World’s Fair was scheduled at the Crystal Palace in London, Congress made no appropriation for the American exhibitors. Peabody personally advanced the $15,000 needed to fit up galleries and arcades for the display of Colt’s revolver, McCormick’s reaper, Hoe’s printing press, Hobbs’ unpickable lock, Bond’s spring governor, and Hiram Powers’ famous statue of The Greek Slave . A mortified Congress later paid him back.
On each Fourth of July, Peabody gave a BritishAmerican banquet graced by such consequential guests as the octogenarian Duke of Wellington. His offices, well-furnished with American newspapers and magazines, became headquarters for travellers from the United States. One of them, described anonymously as “an American writer in London,” had this to say about Peabody’s habits of entertainment: During 1851 Mr. Peabody commenced inviting to dinner every person who brought a letter of credit on his house. The thing had been unknown heretofore. He showed to the stranger particular attentions. A day or two after his arrival there was a polite note of invitation to dinner at the ‘Star and Garter’ or to a Sunday’s fete at Hampton Court, or to a sail on the Thames, or, at least, to an ‘At Home’ at Club Chambers … At the head of the dinner-table, as the host of the numerous fetes given at Richmond Hill, Blackwall, and Hampton Court, in his spacious suite of apartments at Club Chambers, or among guests at his extemporized pleasure-parties, Mr. Peabody was one of the most genial of men. … Where the Duke [of Wellington] went all could go. It [the July 4, 1851, dinner] was without exaggeration the affair of the season. Mr. Peabody spared no expense. Lablache, Alboni and Grisi, lent the concert the aid of their voices; duchesses waltzed with Governors of States, and members of Parliament flirted with Massachusetts belles, long past the small hours of the night; newspapers chronicled the wonderful success of the rich American’s banquet; and on the morning of July 5, 1851, George Peabody’s name was in the mouths of half the kingdom.
It was during this period of increasing fame, as his capital was rising into the millions, that Peabody became aware of an occupational problem: what to do with his money. He never married; a story, possibly apocryphal, has it that he carried a lifelong torch for a Providence girl, who, travelling in Europe with friends, met him and became engaged to him, only to jilt him for a former fiancé. His habits, other than those connected with business entertainment, were frugal. He carried his lunch to his office in two small tin boxes, and when not with clients he dined, by preference, in cheap chophouses. He liked to fish, to play whist and backgammon, to sing Scottish songs, and to talk. He employed a valet only during the last year of his life, when he was ill and feeble. During most of the 1860’s, when his income was more than $300,000 a year, he drew only one per cent, $3,000, for personal expenses. He helped support an army of poor relatives, but the surplus remained alarming. He hit upon philanthropy as the answer to the problem.
For Peabody, charity began at home. In the summer of 1852, when he was invited to the centennial celebration of the severance of the town of Danvers from Salem, he was too busy to show up; but he sent the centennial committee $20,000, to which he later added $230,000 more, to establish a Peabody Institute. This opened in 1854 with a museum, lecture hall, and library, and Peabody visited it two years later, on his first trip to America in nineteen years. A lavish welcome awaited him. Contemporary lithographs depict grand processions of silk-hatted citizens, an Institute inscribed “Dedicated to Knowledge and Morality,” and other local buildings and triumphal arches bearing banners inscribed with such devices as “Danvers Welcomes Her Favorite Son,” “Danvers Welcomes a Nation’s Guest,” “Honor to Him, Who Loves to Honor His Country,” “A Friend at Home and Abroad,” and “George Peabody Respected and Honoured on Both Sides of the Atlantic.” A reception was held, followed by a dinner for fifteen hundred, at which, if we can believe the erratically spelled bill of fare, more than fifty dishes were served, namely: Boiled: Mutton, Caper Sauce. Turkey, Oyster Sauce. Chickens, Celery Sauce. Saltpetred Beef. Ham. Tongue. Roast: Turkeys. Geese. Chickens. Ducks. Lamb. Beef. Pigs. Entrees: Potted Pigeons. Beef a Ia mode. Chicken Salad. Stewed Oysters. Brazed Tongue. Escalloped Oysters. Lobster Salad. Chicken Mayornase. Game: Black Ducks. Widgeons. Teal. Red Head Ducks. Pastry: Charlotte Russe. Tipsey Cake. Chess Cake. Cream Cake. Glacée Pudin. Custard Pudding. Washington Pies. Pies of various kinds. Cake of all kinds. Ice Cream: Vanilla. Pine Apple. Lemon. Strawberry. Sherbet. Punch. Fruit: Oranges. Raisins. Apples. Peaches. Pears. Grapes. Melons. English Walnuts. Almonds. Pecan Nuts. Table Ornaments: Tea. Coffee.
These were downed to the accompaniment of thirteen speeches (including one by Peabody); one song of welcome, rendered by a relative of the guest of honor—Mrs. Joel R. Peabody, who started out, Welcome! illustrious friend and guest! / Aye, more than welcome here, / And be the day forever blessed / That brings back one so dear; two odes, sung by other ladies; and a score of toasts, commencing with one to Rufus Choate (“An adopted son of old Danvers”) and moving with great sweep to King Alfred, Bacon, Shakespeare, and Milton (“They are ours by inheritance. Our share in their glory is that of brotherhood with the elder branch of the family”).
The Favorite Son bore up admirably. “Mr. Peabody appeared in our streets the next morning, apparently as fresh and vigorous as usual,” a published account of the proceedings states. “He made personal inquiry and observation of all matters relating to the Institute, examining the Treasurer’s books.”
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.”
In England, after one hundred years, Peabody’s charitable project still nourishes. Today London’s Donation Fund, with a capitalization of nearly £3,000,000 and a board of governors headed by Sir Charles J. Hambro of Hambros Bank, runs five thousand flats inhabited by some eighteen thousand tenants, ranging, according to a recent annual report, from bagmakers, brewers’ men, and costermongers to lamplighters and needlewomen.
There were other Peabody benefactions which, while relatively minor, grew to be exceedingly fruitful. A fine example was the $150,000 that he gave to Yale. This founded the Peabody Museum of Natural History, the leading institution of its kind in New England. During its first quarter-century it was run by Professor Othniel Charles Marsh, a nephew of Peabody’s who had persuaded his uncle to put up the money for it. Marsh, whom Peabody generously supported far beyond Yale’s judicious stipends, was a pioneer in vertebrate paleontology. Thanks to his discoveries and vast collections in this field, gathered chiefly in the western states, “The Peabody’s” accumulations of fossil vertebrates are extraordinary to this day. If the uncle had no other memorial, the nephew’s museum would suffice. As early as 1868, when it had been paid for but not yet built, George T. Dole, a Yale man of the 1830’s, delivered before the Phi Beta Kappa Society of Yale College an original poem, “Yale Revisited,” in which he anticipated A grand Museum, where, in bright array,f The Cabinets their rich stores shall display and went on to immortalize its founder .
But who the rich Maecenas that supplies Funds, this idea to fitly realize? One whom no College ever graduated, Nor classic institution cultivated: From a New England common school sent forth, He stands, at length, with magnates of the earth, A prince of merchant princes; aye, a prince Of the high order of beneficence.
Let all the rich, who mean, when they shall die, To do great things by way of legacy, How to make sure a worthy end, and see, And taste the pleasure, learn of PEABODY.
It was only a year later that the “prince of merchant princes” was himself dead, having by that time seen and tasted the pleasure of a great many of his good works. He had also been suitably rewarded with much esteem and praise in high places, perhaps even more notably in England than in the United States. Congress had ordered a medal struck in his honor in 1868; but Queen Victoria had offered him a baronetcy (which he refused), and had presented him with a miniature enamel portrait of Her Majesty wearing the Koh-i-noor Diamond, the Order of the Garter, and a jewelled cross given her by Prince Albert. It was inscribed, “Presented by the Queen to Geo. Peabody, Esq., the Benefactor of the Poor of London,” and it is said to have cost its donor $70,000. There was also a statue of Peabody, unveiled by the Prince of Wales in 1869 on Threadneedle Street, in the heart of the London financial district.
Peabody was given three impressive funerals, and—elaborately embalmed—spent over three months between deathbed and grave. During the first of these obsequies, held in Westminster Abbey, London shopkeepers lowered their blinds and closed up shop. The mourners included Prime Minister William Gladstone, and an obituary sermon was delivered by the Bishop of London. After thirty days of lying in state in the Abbey, the body was transported to the United States, on the Queen’s order, by Great Britain’s newest and biggest warship, H.M.S. Monarch . There was some grumbling in America about the propriety of this. On the whole, however, it was taken as a gesture of Anglo-American friendship to relieve the tension caused by American reparation claims for the depredations of the British-built Alabama against Union ships during the Civil War. President Grant dispatched the U.S.S. Plymouth to accompany the Monarch as an escort, and on January 25, 1870, the two ships steamed into the harbor at Portland, Maine—chosen over Boston because its deeper channel could accommodate the big Monarch .
After several days of lying in sentinelled state at Portland’s city hall, where services included a choral rendition from Handel’s Messiah by 300 voices, Peabody’s remains went by special train to Peabody, Massachusetts. (It was his old home town of South Danvers, which in 1868 had gratefully changed its name in honor of its famous son.) There was a flurry of excitement and controversy when it was rumored that Robert E. Lee (who had known Peabody briefly but fondly) might attend the final funeral there; but Lee was ill and sent his regrets—to the satisfaction of those who felt that a man like Lee had no ceremonial business north of the Mason-Dixon Line. But the young Prince Arthur, Queen Victoria’s third son, who had recently come from a tour of Canada, appeared with his retinue for the ceremony, which took place in the South Congregational Church on February 8, after another week of lying in state—this time at the Peabody Institute Library. Numerous American dignitaries were also present: the governors of Massachusetts and Maine, mayors of half a dozen cities, the trustees of the Peabody benefactions from at least as many different other places. The first great American philanthropist had been an unconscionable time aburying, but at length he was put to rest in a granite sarcophagus he himself had ordered six months before.
Among the elegies from well-known persons in various parts of the world there was one from Victor Hugo. “Yes,” wrote the famous French author, “America has reason to be proud of this great citizen of the world and great brother of all men—George Peabody. … Like Jesus Christ, he had a wound in the side: this wound was the misery of others. It was not blood that flowed from this wound: it was gold which now came from a heart. … It is on the face of [such] men that we can see the smile of God.” It was a tribute no doubt somewhat too Gallic in its expression for American taste, but the sentiment, nonetheless, seemed appropriate.