1 of 3 Parts: On the Trail of Educational Philanthropist George Peabody (1795-1869)
On the Trail of Educational Philanthropist George Peabody (1795-1869)
By Franklin Parker and Betty June Parker
We met as students at Berea College near Lexington, Ky. (Sept. 1946), Betty entering from Decatur, Ala.; Franklin from Asheville, N.C. Berea College brought us together, led to our marriage (June 12, 1950), and its Alumni Office got us our first teaching jobs at Ferrum Jr. College near Roanoke, Va., 1950-52.
To improve our professional preparation we attended George Peabody College for Teachers (GPCFT), adjacent to Vanderbilt Univ., Nashville, Tenn., the summers of 1951 and 1952. Because Berea College was and remains a work-study tuition-free college, Franklin extended his GI Bill entitlement (he served in the U.S. Army Air Forces, 1942-46) to help cover graduate study costs at the Univ. of Illinois, Urbana, 1949-50 (MS in LS), and GPCFT, 1952-56 (Ed.D.); plus cover travel, housing, and other costs to U.S. and British libraries to read GP-related papers.
With a part-time job and small GPCFT scholarship for Franklin, together with Betty’s job teaching English in a Nashville business college, we became graduate students at GPCFT during 1952-56. Franklin took courses from and became a doctoral candidate under GPCFT’s Canadian-born Prof. Clifton Landon Hall (1898-1987), a graduate of Bishop Univ. (Quebec), McGill Univ. (Montreal), and the Univ. of N.C., Chapel Hill, with a Ph.D. in the history of education. He was a widely respected professor on the Peabody and Vanderbilt campuses.
Finding an area in the history of Tenn. higher education as a possible dissertation topic, Franklin went for approval (mid-1953) to GPCFT Dean (and later president) Felix Compton Robb (1914-97). Dean Robb told Franklin of his (Robb’s) earlier experience in a history course he had at Harvard Graduate School of Education under Harvard historian Arthur Schlesinger, Sr. (1888-1965). Knowing that Robb was a Peabody College administrator looking for a dissertation topic, Schlesinger described the importance of GP’s educational philanthropy, told Robb how the Peabody Education Fund (1867-1914) to aid public education in the defeated South had influenced all subsequent U.S. funds and foundations, that GP as founder of modern educational philanthropy had not been fully explored nor adequately documented.
Determined on a career in higher education administration, Robb chose instead to write a dissertation in education administration (Robb became GPCFT president and was Director, Southern Assn. of Colleges and Schools). Perhaps regretting a good topic not pursued, Robb urged Franklin to explore GP’s role in U.S. educational philanthropy as a dissertation topic.
Increasingly intrigued by what we found in libraries and encouraged by two small Jesse Jones scholarships, we read GP’s original letters and papers intensively in scattered U.S. and British depositories during 1953-55.
(GP in Brief: Sources in the GP Publications Listed Below)
GP was born Feb. 18, 1795, into a poor branch of the Peabodys, third of eight children in Danvers, Mass., 19 miles northeast of Boston. He lived long enough to see his birthplace (renamed South Danvers in 1855 when Danvers was divided into North Danvers and South Danvers) renamed Peabody, Mass., in his honor on April 13, 1868.
He attended a district school 4 years, ages 8-12 (1803-07), which was all his parents could afford; was apprenticed in a general store 4 years, ages 12-15 (1807-10); and worked for a year in his oldest brother’s dry goods store in Newburyport, Mass. (1810-11). His father’s death on May 13, 1811, leaving the family in debt and the Danvers home mortgaged, forced GP’s mother and the five younger children to live with nearby relatives. Eighteen days later, May 31, 1811, the Great Fire of Newburyport, where GP was clerking in older brother’s drapery shop, ruined business prospects and led to an exodus of many from that town.
Paternal uncle John Peabody (1768-1827), whose Newburyport store and stock were also ruined, urged his 17-year old nephew GP to join him in opening a dry goods store in Georgetown, D.C. Because his uncle could not obtain credit, GP asked a Newburyport merchant to stand surety for him for a consignment of goods on credit from a Boston merchant. With $2,000 in goods thus secured, uncle John and nephew George sailed from Newburyport (May 5, 1812) and opened a dry goods store in Georgetown, D.C., May 15, 1812.
Uncle John soon entered other enterprises. Alone GP tended the store and was also a pack peddler selling goods to nearby homes and stores. With nearby Washington, D.C., under threat of British attack, he volunteered in the War of 1812. There he met and impressed 35-year-old fellow soldier and experienced Md. merchant Elisha Riggs, Sr. (1779-1853). Riggs took the 19-year-old GP as junior partner in Riggs, Peabody & Co. (1814-29), which imported European fabric, clothing, and other goods for sale to U.S. wholesalers. The firm moved to Baltimore in 1815 and had warehouses in Philadelphia and NYC by 1822.
(GP: Young Merchant in the South, 1812-37)
Taking early responsibility as family breadwinner, GP sent his mother and siblings flour, sugar, clothes, other necessities, and money. By 1816, at age 21, he had paid the family debts and restored his mother and siblings to their home. Newburyport lawyer Ebon Mosely wrote GP on Dec. 16, 1816: “I cannot but be pleased with the filial affection which seems to evince you to preserve the estate for a Parent.”
GP paid for the education at Bradford Academy, Bradford, Mass., of five younger relatives: brother Jeremiah, from 1819; sister Judith Dodge during 1821-27, sister Mary Gaines during 1822-27, cousin Adolphus W. Peabody (paternal uncle John’s son) during 1827, and a nephew named for him (oldest brother David’s son George), also during 1827. He bought a house in West Bradford, Mass., for his relatives who were enrolled in the academy where his mother also lived for several years.
He later paid for the education of other relatives: nephew Othniel Charles Marsh (1831-99), at Yale Univ., later the first U.S. paleontologist; nephew George Peabody Russell (1835-1909), Harvard-trained lawyer; niece Julia Adelaide Peabody (b. April 25, 1835), Philadelphia finishing school; and others.
GP traveled in the U.S. and abroad for Riggs, Peabody & Co. He made five European buying trips during 1827-37. When Elisha Riggs, Sr., withdrew to become a NYC banker, the firm became Peabody, Riggs & Co. (1829-48), with GP as senior partner and Riggs’s nephew, Samuel Riggs (d.1853), as junior partner.
(Appointed Fiscal Agent to Sell Abroad Md.’s State Bonds for Internal Improvements: Canal and RR)
In 1836, as part of large scale internal improvements in many states (building roads, canals, and railroads), the Md. legislature voted to finance the Chesapeake and Ohio Canal and the B&O RR with interest-bearing state bonds sold abroad. Md. appointed three agents to sell its $8 million bond issue abroad. When one agent withdrew, GP sought and secured his place. He left for London Feb. 1837, just before the Panic of 1837.
The depression that following the financial Panic of 1837 led the two other agents to return to the U.S. without success. GP remained in London the rest of his life (1837-69), 32 years, except for three U.S. visits: 1-Sept. 15, 1856 to Aug. 19, 1857; 2-May 1, 1866 to May 1, 1867; and 3-June 8 to Sept. 29, 1869.
Depressed conditions after 1837 led nine states, including Md., to stop interest payments on their bonds sold abroad. GP had to sell the bonds in this depressed market and amid British and other European investors anger at the stoppage of interest payments. He publicly assured investors that repudiation was temporary, that payments would be retroactive; and by letters, printed in newspapers, he urged officials in Md. and other defaulting states to retroactively resume interest payments.
GP finally sold his part of the Md. bonds cheaply for exclusive resale by London’s Baring Brothers banking firm. In 1847-48 Md. officials acknowledged publicly that GP had upheld Md.’s credit abroad in the aftermath of the financial panic and that, rather than burden the Md. state treasury, had declined the $60,000 commission due him. Md. Gov. Philip Francis Thomas (1810-90) transmitted the Md. legislature’s resolutions of praise to him and wrote, “To you, sir…the thanks of the State were eminently due.”
(Transition from Dry-Goods Importer to London-based Broker-Banker Selling U.S. State Bonds to Promote Internal U.S. State Improvements)
Gradually curtailing business activities for Peabody, Riggs & Co., he withdrew his capital in 1843 and severed his connection in 1845 (the firm’s business ended in 1848). He founded George Peabody & Co., London (Dec. 1, 1838-Oct. 1, 1864) and increasingly sold abroad U.S. state bonds to finance roads, canals, and railroads. He succeeded in transition from merchant to investment banker.
With others he helped finance the U.S. government’s second Mexican War loan; bought, sold, and shipped European iron and later steel rails for U.S. western railroads; and was a director, investor, and financier of the Atlantic Telegraph & Cable Co. He had learned to marshal capital to finance and expand U.S. business and industrial growth. In the 1850s he became the most eminent U.S. banker in London dealing in U.S. trade and U.S. state and federal bonds.
George Peabody & Co. prospered. Asked in an interview on Aug. 22, 1869, how and when he made his money, GP said, “I made pretty much of it in 20 years from 1844 to 1864. Everything I touched within that time seemed to turn to gold. I bought largely of U.S. state securities when their value was low and they advanced greatly.”
Often ill and urged by business friends to take a partner, GP on Oct. 1, 1854, at age 59 took as partner Boston merchant Junius Spencer Morgan (1813-90). J.S. Morgan’s son John Pierpont Morgan (later Sr., 1837-1913), at age 19, began his banking career as NYC agent for George Peabody & Co. Increasing illness hastened GP’s retirement on Oct. 1, 1864. Unmarried, without a son, and knowing he would no longer control the firm, he asked that his name be withdrawn.
George Peabody & Co. (Dec. 1838-Oct. 1, 1864) continued in London as J.S. Morgan & Co. (Oct. 1, 1864-Dec. 31, 1909), Morgan Grenfell & Co. (Jan. 1, 1910-Nov. 1918), Morgan Grenfell & Co., Ltd. (Nov. 1918-90), and Deutsche Morgan Grenfell (since June 29, 1990), a German-owned international banking firm.
GP’s was thus the root of the international banking house of J.P. Morgan, a fact amply recorded yet largely forgotten and not generally known. Relieved of business burdens GP spent the last five years of his life (1864-69) looking after his philanthropic institutions, first begun in 1852.
(GP as Educational Philanthropist)
More intriguing than how GP made his money was why and how he gave it away. In 1820 he was worth between $40,000 and $50,000. His 1827 will left $4,000 for charity. His 1832 will left $27,000 (out of a $135,000 estate) for educational philanthropy. He early told intimates and said publicly in 1850 that he would found an educational or other useful institution in every town and city where he had lived and worked. During his lifetime he earned about $20 million. Before his death (Nov. 4, 1869) he gave half his fortune to philanthropy and half to his relatives. (Note: $20 million in 1869 is estimated to equal $258.3 million In 2001 purchasing power).
He gave to his 27 philanthropic institutes, numbered below, a total of about $10 million. His seven U.S. Peabody institute libraries, with lecture halls and lecture funds, like the Lyceums (from 1826) and later Chautauquas (from 1872), were part of the adult education centers of the time.
Four of his seven Peabody Institute libraries are in the Mass. towns of: (1)-Peabody, (2)-Danvers, (3)-Newburyport, and (4)-Georgetown. The four-part (5)-Peabody Institute of Baltimore (PIB) contained a reference library, initially so extensive that the Library of Congress early borrowed from it, plus an art gallery, a lecture hall a lecture fund, and a conservatory of music.
The PIB, to which he gave a total of $1.4 million, presaged (and may have set a model for) such later cultural centers as the Lincoln Center, NYC; and the Kennedy Center, Washington, D.C. (the PIB reference library and the PIB conservatory of music became part of the Johns Hopkins Univ., from 1982). Other Peabody libraries are in (6)-Thetford, Vt. and in (7)-Georgetown, D.C. (now the Peabody Room of the Washington, D.C., public library.
Influenced by his nephew O.C. Marsh’s scientific interests and attainments, GP founded three Peabody museums of science: (8)-the Peabody Museum of Archaeology and Ethnology at Harvard Univ. (anthropology); (9)-the Peabody Museum of Natural History at Yale Univ. (paleontology), $150,000 each; and what is now the (10)-Peabody Essex Museum, Salem, Mass. (maritime history plus Essex County historical documents), $140,000.
GP earlier gave the (11)-Md. Institute for the Promotion of Mechanic Arts $1,000 for a chemistry laboratory and school, Oct. 31, 1851; (12)-Phillips Academy, Andover, Mass., $25,000 for a professorship of mathematics, Oct. 30, 1866; (13)-Kenyon College, Gambier, Ohio, $25,000 for a professorship of mathematics and civil engineering, Nov. 6, 1866; and to former Gen. Robert E. Lee’s (1807-70) (14)-Washington College (renamed Washington and Lee Univ., 1871), Lexington, Va., $60,000 for a professorship of mathematics, Sept. 1869.
He gave $20,000 publication funds each to the (15)-Md. Historical Society, Baltimore, Nov. 5, 1866; and the (16)-Mass. Historical Society, Boston, Jan. 1, 1867. He gave the (17)-U.S. Sanitary Commission to aid Civil War orphans, widows, and disabled veterans $10,000, 1864; and the (18)-Vatican charitable San Spirito Hospital, Rome, Italy, $19,300, April 5, 1867.
He had a (19)-Memorial Congregational Church built in his mother’s memory in her hometown, Georgetown, Mass., $70,000, 1866. For patriotic causes he donated to the (20)-Lexington Monument, in what is now Peabody, Mass., $300, 1835; the (21)-Bunker Hill Memorial, Boston, Mass., $500, June 3, 1845; and the (22)-Washington Monument, Washington, D.C., $1,000, July 4, 1854.
Continued in Part 2 of 3 Parts.