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.
Further Reading on George Peabody
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).
Additional Biography Sources
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.