George Peabody [pronounced with all the emphasis on the first syllable, like ‘puberty’] was born in the little town of Danvers, Massachusetts, in the United States of America on 18 February 1795. His parents, Thomas and Judith Peabody, were not well off. George didn’t didn’t get a full education; he had to leave school at the age of 11 and, become an apprentice to a grocer. At the age of 16 he went off to join the army, where he met Elisha Riggs. They became friends and in 1814 they set up a wholesale dry goods firm with money provided by Riggs. The firm was called Peabody Riggs & Co. It wasn’t long before they were opening branches in several major cities. In 1816 Peabody moved to Baltimore in Maryland, where he lived for the next 20 years.
Peabody first visited England in 1827 to negotiate a deal for American cotton in Lancashire. Over the next few years, Peabody came to appreciate the extent to which businesses in the United States where suffering from a lack of foreign capital, and he moved into banking. He set up the firm of George Peabody & Co, specialising in raising and exchanging money. In fact, he played a major part in helping his adopted home state of Maryland from going bankrupt by arranging a loan for it in 1835.
But ever since his first visit to London, Peabody had formed a deep affection for the city and he settled in London permanently in 1837. He also seriously increased his wealth that year by taking advantage of a run on American companies’ shares. This was the panic of 1837, where American companies were suffering an acute shortage of finance and the stock market virtually collapsed. Peabody’s bank took advantage of the situation to buy large amounts of the securities at the low point, but also provided financial help to companies which needed it. When the market and confidence returned to normal he made a killing on his bonds. (He similarly took advantage of the panic of 1857.) His bank entered into partnership with the father of JP Morgan in 1854.
In London, and freed from the necessity to concentrate on business due to the fortune he had now amassed, Peabody was able to turn his mind to philanthropic aims. He was very interested in providing housing for the poor. The lack of suitable housing for the very poor in London was becoming an acute problem as thousands of people swelled the population to work in industry and were often close to homeless.
Peabody wanted to do something to relieve the acute poverty he saw in the poorer parts of London, and at the suggestion of Lord Shaftesbury, he decided to start building housing which could be rented to the poor at a low rent.
Peabody set up the Peabody Donation Fund in London in 1862. He gave a considerable part of his fortune to it. The fund then started constructing dwellings ‘for the artisans and labouring poor of London’. He started on a relatively small scale with 66 flats in Commercial Street in Whitechapel in 1864. The Fund went on to set up ten estates in all during the following years.
On interesting point to notice. Peabody was not seeking to help the destitute. He was seeking to help artisans (who could earn a living) and the labouring poor – not the out-of-work poor. The reason was that the tenants of his properties had to pay rent – not a full rent – but some rent. That was ultimately how the entire project could be financed. For the Fund to be able to borrow money to finance construction, it had to be able to offer a return to the banks, even if the entire project was just to break even.
Peabody didn’t only concentrate his generosity on housing for the poor in London. He founded several other charitable organisations in America. Peabody Institutes were set up in Danvers, his birthplace, and Baltimore. He also endowed museums in Harvard, Yale and Salem. And he set up the Peabody Education Fund to help poor children have the education which he felt he had lacked.
Peabody was a humble man. Various honours were offered to him by Queen Victoria, including a baronetcy, but he declined. He never married. He died in London on at the age of 74. With the Queen’s approval, Peabody was temporarily buried in Westminster Abbey. But then, as his will requested, his body was transferred to his hometown, Danvers, Massachusetts. Prime Minister Gladstone arranged for one of the Navy’s most prestigious ships, HMS Monaco, to transfer Peabody’s body to America. He was buried in Danvers. Danvers changed its name to Peabody in his honour.
Peabody was one of the earliest of the great philanthropists. Unlike many, who attached a religious obligation to their gifts, Peabody was not at all concerned about the religious beliefs of the people he was trying to help. He was only trying to help.
There is a bronze statue of Peabody by William Wetmore Story outside the Royal Exchange in the City of London, which put up before his death in 1869.