Peabody, George (1795-1869)
George Peabody (1795-1869)
Merchant, financier, philanthropist
Early Year. George Peabody was born on 18 February 1795 in South Danvers (now Peabody), Massachusetts. His parents being of modest means, Peabody attended the local village school for only four years before taking up an apprenticeship with a local grocer at age eleven. Several years later he became a clerk in his brother David’s dry-goods store in nearby Newburyport until the business was destroyed in a fire in 1811. In May 1812 Peabody moved to Georgetown, outside of Washington, D.C., where he was made a partner in Elisha Riggs’s substantial dry-goods business. The company was relocated to Baltimore in 1815, and when, in 1829, Riggs retired, Peabody became the senior partner in the firm. In his efforts to expand his business, Peabody made several trips to London, which was at this time still the world’s financial capital. In 1837 he settled permanently in London, becoming something of a celebrity and serving as an unofficial American ambassador. Through his role as a financier, Peabody also succeeded in becoming extremely wealthy and began a remarkable career as one of the most noted philanthropists of the nineteenth century. The objects of his giftgiving varied: he outfitted the ship used by Sir John Franklin in his Arctic explorations (1845–1847); when Congress was not forthcoming with support, he gave a large sum to finance the American exhibit at the 1851 International Exposition in London; and he donated $2.5 million to the City of London to aid in building sanitary dwellings for workers and their families.
London. During his years in London, Peabody maintained a special affection for the land in which he had been born. His ostentatious Fourth of July parties were attended by English nobility and by many of the country’s most prominent business and political leaders. In 1835 Peabody secured an $8 million loan to rescue the state of Maryland, then on the verge of bankruptcy. When, in the late 1830s and early 1840s, American credit suffered a series of setbacks on the international market, Peabody intervened personally with contacts in London to help restore confidence in American enterprise. He also made substantial gifts to his hometown of Danvers, financing the construction of a public library there along with other public projects, and to the city of Baltimore, where he established the Peabody Institute with a $1.5 million gift. The Peabody Museum of Natural History, at Yale University, and Harvard’s Peabody Museum of Archaeology and Ethnology both had their origins in large donations from him.
Affection for the South. Perhaps out of regret at having been deprived of an education as a youngster, Peabody seems to have been an early and enthusiastic supporter of the common-schools crusade. In 1852 he remarked that he was full of hope for the United States so long as “we plant the New England institution of the common schools liberally among the immigrants who are filling up the valley of the Mississippi.” His stay in Baltimore some years earlier and his travels throughout the South had developed in Peabody a strong bond of sympathy with the South, and his financial dealings had put him in touch with prominent businessmen throughout the region. Though firm in his conviction that southerners had erred in seceding from the Union, Peabody was greatly distressed over the outbreak of the Civil War and expressed his regret that tensions had spilled over into military carnage. At the close of the war, he was one of the individuals most clearly calling for sectional reconciliation. “Never during the war or since have I permitted the contest to interfere with the warm friendships which I had formed for a very large number of the people of the South,” he told a Baltimore audience at the war’s end, “and now, after the lapse of these eventful years, I am more deeply, more earnestly, more painfully convinced than ever, of our need of mutual forbearance and conciliation, of Christian charity and forgiveness, of united effort to bind up the fresh and broken wounds of the nation.”
Southern Education. Education was to be the centerpiece of Peabody’s formula for reconciliation. In February 1867 he established the Peabody Education Fund and began appointing well-known educators and public figures from both the North and South as trustees, including, most prominently, Brown University president Barnas Sears. When, in 1869, he augmented his original endowment with additional funds (bringing the total donation to $3.5 million), Peabody told trustees, “This I give to the suffering South for the good of the whole country.” Under Sears’s direction, the fund developed a strategy aimed at rooting public education in the region. With limited funds and a vast field of work in which to operate, Sears established clear guidelines that directed the trustees and shaped the future of southern education: the bulk of the fund’s resources would be devoted to substantial towns and cities, where large numbers of students could take advantage of the schools, rather than sparsely settled rural areas; faced with a severe shortage of trained teachers, the establishment of teacher-training institutes and normal schools would be made a priority; finally, Sears made it clear that their intention was to spur the development of a comprehensive school system, not to fund it entirely. He devoted considerable effort to involving local communities and state government in funding and administering the new schools.
Mixed Schooling. In the charged atmosphere of Reconstruction, when many southern whites remained bitter over the manifold results of the war, educators inevitably had to confront the dilemma of sharp racial antagonism. Specifically, they were faced with a choice between organizing an integrated or a segregated system of public education. Although integrated schools had been successfully established in a few areas—most notably New Orleans—many whites refused outright to send their children to school alongside blacks. Former slaves and their descendants harbored a different perspective. While they did not necessarily desire to attend school with whites either, and in some cases valued the autonomy that separate schools offered, they resented the stigma of inferiority that segregationists endeavored to maintain, and generally spoke out in favor of integrated schools. This set them at odds with the trustees of the Peabody Fund, who employed their considerable prestige and influence—besides money—to undermine efforts at integration. Sears in particular railed against the “futile attempt to force ’mixed schools,’ “and warned that “any authoritative interference with the schools of these States would be disastrous to the dearest interests of education.”
Separate but Equal. Although his death in London in 1869 removed him from the controversy before it reached its zenith, Peabody himself apparently acquiesced in Sears’s judgment, and the fund as a whole came in for severe criticism. The abolitionist William Lloyd Garrison called Peabody “conservative by structure, taste, and affinity,” while others complained that Sears had “imbibed the Southern prejudice against the Negro.” Sears’s controversial proposal to devote less per capita funding to black schools than the fund expended upon white schools, which he justified with the claim that “it costs less to maintain schools for the colored children than for the white,” further raised the ire of fund critics. With some justification they claimed that northern philanthropy was being used to restore the racial order that the Civil War had aimed to topple.
J. L. Curry, A Brief Sketch of George Peabody, and a History of the Peabody Fund through Thirty Years (New York: Negro Universities Press, 1969).
George Peabody (1795-1869), American merchant, financier, and philanthropist, amassed a fortune during his business career. He began as a merchant and ended as a banker and dealer in American securities in England.
Born on Feb. 18, 1795, in Danvers, Mass., George Peabody had a limited education before being apprenticed to a grocer at the age of 11. He subsequently was involved in other mercantile establishments, served briefly in the War of 1812, and became a partner of Elisha Riggs in a wholesale dry-goods establishment in Georgetown, D.C., in 1812. The partners opened branches in Baltimore, New York, and Philadelphia, and Peabody went to London in 1827. When Riggs retired 2 years later, Peabody became the senior partner. He settled permanently in England in 1837.
Peabody arrived on London's financial scene with some appreciation of the need for foreign capital in America and the opportunities which awaited those involved in such capital movements. In 1835 he arranged for a substantial loan for Maryland in London. A year later he was one of the incorporators and the president of the Eastern Railroad—one of the first successful railroads in New England. His firm, George Peabody and Company, specialized in foreign exchange and American securities. In 1843 he ended his mercantile pursuits, and over the next 20 years he accumulated the bulk of his $12 million fortune acting as an international banker and offering diversified services to British and American clients. He also acted as an unofficial ambassador to England, strengthening Anglo-American ties whenever possible.
Operating at a time when American demand for foreign capital was almost insatiable, Peabody showed a sensitivity to current conditions that enabled his firm to sidestep the effects of the Panic of 1837, which destroyed some of his competitors. During the years that followed, while American securities were declining and American credit was under severe attack, he bought substantial amounts of depressed securities and influenced American businesses and states and other political entities to honor their obligations to foreign bondholders. The consequence was great personal advantage to Peabody and Company as well as considerable benefit to the political entities involved when normal economic conditions were restored. The firm adopted similar tactics during the Panic of 1857. Once again, Peabody and Company assisted by massive credits extended to American entities by British banks, and the company profited greatly because its confidence in the long-range prospects of the American economy had led it to purchase great amounts of depressed American securities.
While engaged in international banking and acting as the chief institution funneling British capital into the United States, Peabody personally began the systematic program of donations which made him the world's first great philanthropist. The bulk of his fortune went to various scientific and educational institutions and to programs supporting the poor of England and the United States.
Accounts of Peabody are Philip Whitwell Wilson, George Peabody, Esq.: An Interpretation (1926), Edwin Palmer Hoyt, The Peabody Influence: How a Great New England Family Helped To Build America (1968), and Franklin Parker, George Peabody: A Biography (1971). An early brief view is Jabez Lamar Monroe Curry, A Brief Sketch of George Peabody (1898; repr. 1969). For useful background see Lewis Corey, The House of Morgan (1930).
Hidy, Muriel E., George Peabody, merchant and financier: 1829-1854, New York: Arno Press, 1978 i.e. 1979.
Parker, Franklin, George Peabody, a biography, Nashville: Vanderbilt University Press, 1995. □
Peabody, George, American businessman and philanthropist; b. South Danvers, Mass., Feb. 18,1795; d. London, Nov. 4, 1869. He was the founder of George Peabody & Co., which specialized in American securities and foreign exchange. In 1837 he settled in England, where he conducted a thriving business. In 1857 he disbursed $1,500,000 for the founding of the Peabody Inst. in Baltimore, which later established the Peabody Cons, of Music.
—Nicolas Slonimsky/Laura Kuhn/Dennis McIntire