In Eighteen Hundred Twenty-seven Peabody visited England. He was then thirty-two years old. The merchants from whom he bought discovered a surprising thing when they met Peabody—he was not the bounding, bragging, bustling, hustling American. He hustled, of course, but not visibly nor offensively. He had the appearance of a man who had all the time there was. He was moderate in voice and gentle in manner, and we hear of a London banker paying him the somewhat ambiguous compliment of saying, "Why, you know, he is a perfect gentleman—he does not seem like an American, at all, you know!" Peabody had the rare gift of never defeating his ends through haste and anxiety.
The second trip Peabody made to London was in Eighteen Hundred Thirty-five, and it was on a very delicate and important errand.
The State of Maryland was in sore financial distress. She had issued bonds, and these were coming due. Certain Southern States had repudiated their debts, and it looked as if Maryland was going to default. Peabody issued an open letter calling on the citizens of Maryland to preserve their commercial honor. The State bonds were held mostly in New York and Philadelphia, and these were rival cities. Baltimore was to be tabu. Stephen Girard had loaned money to Maryland, and in Eighteen Hundred Twenty-nine had declined to renew, and this some said had led to the stringency which reached its height in Eighteen Hundred Thirty-five. Then it was that the State of Maryland empowered George Peabody to go to London and negotiate a loan. The initiative was his own. He went to London, and floated a loan of eight million dollars. Robert Owen said that Peabody borrowed the money "on his face."
He invited a dozen London bankers to a dinner, and when the cloth was removed he explained the matter in such a lucid way that the moneybags loosened their strings and did his bidding without parley. Peabody sailed back to Baltimore with the gold coin. Another case of Charm of Manner.
Peabody knew the loan was a good thing to both borrower and lender. And the man who knows what he is going to do with money, and when and how he is going to pay it back, is never at a loss for funds.
In Eighteen Hundred Ninety-three Andrew Carnegie called upon the banks of Pittsburgh for a million-dollar loan. The bankers said, "Why, Mr. Carnegie, this is unprecedented!" The reply was: "Well, I am a man who does unprecedented things. If you believe that I know what I am doing, get this money together for me—life is too short for apologies—I'll be back in an hour."
Three of the bankers coughed, one sneezed, but they got the money and had it ready when Andy called in an hour. In this transaction Andy held the whip-hand. The Carnegie Mills were already owing the Pittsburgh banks a tidy million or so, and they were compelled to uphold and support the credit of their clients, or run the risk of having smokestacks fall about their ears. It was so, in degree, with Peabody and the London bankers. A considerable portion of Maryland's old bond issue had been hypothecated by the Philadelphia and New York bankers with merchants in London. It was now Peabody's cue to show London that she must protect her own. His gracious presence and his logic saved the day. It is a great man who can flick a fly on the off-leader's ear, when occasion demands.
As a commission for securing the London loan, the State of Maryland gave Peabody a check for sixty thousand dollars. He endorsed the check, "Presented to the State of Maryland with the best wishes of G. Peabody," and gave it back. Peabody's success with Threadneedle Street tapped for him a reservoir of power. To bring Great Britain and America into closer financial and industrial relationship now became his life-work. In Eighteen Hundred Thirty-five he moved his principal office to London. This was for the purpose of facilitating the shipment of English goods to America. The English manufacturers were afraid to sell to American merchants. "Capital is timid," said Adam Smith, the truth of which many of us can attest.
Peabody knew the trade of America; and his business now was to make advances to English jobbers on shipments going to "the States." Thus did he lubricate the wheels of trade.
London bankers had been trying to show English manufacturers that trading with the "American Colonies" was very risky, inasmuch as these "Colonies" were "rebels," and entertained a hate and jealousy toward the Mother Country which might manifest itself in repudiation almost any time. This fanning of old embers was to keep up the rate of discount. The postage on a letter carried from England to America, or America to England, was twenty-five cents when Peabody first went to England. He saw the rate reduced to ten cents, and this largely through his own efforts.