Malcolm Peabody

MALCOLM PEABODY, TOM BIRCH: INTERVIEWER

Tom Birch:  This is Tom Birch and I’m here with Malcolm Peabody, at his house, 2811 Dumbarton Street in Georgetown, on a beautiful spring day in his garden, interested in talking about all things Mike Peabody and all things Georgetown and how all of that comes together.

Mike, why don’t you start by just telling us what brought you to Washington and maybe some of what happened before that made you decide to come to Washington?

Malcolm Peabody:  I became very interested in politics, when my brother, Endicott, ran for governor and won in the state of Massachusetts. I helped him win that election by giving 0.01 percent of his help to him.

[laughter]

Malcolm: I had come up there from New York where I was working in the Rockefeller administration, where I had joined the State Commission Against Discrimination as the Executive Secretary.

I knew nothing about civil rights at the time. I was hired by a chair, who was looking for somebody that didn’t know anything about civil rights, because the previous director thought he knew too much.

Inasmuch as, not only I did not know much about this, but also, I was from a Yankee family, which attracted him, because it was a Yankee who got him through Harvard College, helped get him through. His name was Elmer Carter and he was a wonderful black guy. He took a real shine to me and me to him over the next two years.

Before that, I was in Albany for a short time with another state organization where the bosses and I did not get along.  I asked to get another job. This is the one that was offered me, which I loved. I moved to New York City. It was just as I was getting married to Pam that this occurred, November of 1959. We moved first to Manhattan and then fairly shortly thereafter to Brooklyn, where I purchased a townhouse with four or five apartments in it. We fixed up one of them on the first, on the bottom floor, and had a very pleasant life there. It was right across the street from houses that were overlooking the river. One of them was inhabited by a former roommate of mine at Harvard. That was a pleasant time.

Then two years later, Elmer Carter retired as chair of the State Commission Against Discrimination and was replaced by a guy I didn’t like much and who didn’t like me much. I was ready to get out anyway and go back to Boston with Pam, and so I did.

At that time there was a guy who was a very well‑known director of the Boston Redevelopment Authority. He needed somebody who was knowledgeable about civil rights and by that time I had some expertise. Not much, but enough.

I was hired as the professional for civil rights work at the Boston Redevelopment Authority in order to guide the Authority in ways that helped rather than hindered the black community being displaced. I was at the head of the commission, not the chair but the executive committee, which was run by a famous black cleric who later became a congressman. At the same time, Chub was running for governor. He had won the primary, which surprised everybody, particularly the professional Democratic Party who did not wish to have a Yankee in their midst. This was totally untoward.

They paid him no attention, because although he won the primary for governor, there was already a popular Republican Governor, John Volpe, who was governing. He was running again. The thought was, “Chub Peabody had no chance.” Chub Peabody did have a chance. He won by just a few thousand votes and became governor.

A few months later, he appointed me the head of the Low‑Income Housing Committee. We worked to generate legislation, which would fix some of the problems we had. Amongst the members of that committee was a man by the name of Michael Dukakis, who became a big supporter of mine.

When asked, he gave me high marks. We came through with that committee. We got good legislation for it. Through the legislation, we set up the Housing Finance Agency, which continues today in Massachusetts and has funded many, many projects.

We also were running a housing allowance program, set it up, a small one. I had become very interested in improving the lot of the poor by giving them choice, very interested in that. I was quite taken by the example of the GI Bill where the GIs were given the right and the money. They go to the college of their choice.

It didn’t have to work that way. They could have just spread the money out to the colleges and let them get the GIs, but they didn’t. They gave the money to the GIs and that made an enormous difference, not only on the GIs but also on the entire economy, because the GI Bill undergirded the prosperity that occurred in the ’60s and ’70s and pushed the nation to the head of the world.

The GI Bill was a big part of that. I was very impressed with the whole concept of giving choice to the persons who were getting the help. All right, so then I also decided that I would be a fabulous congressman and decided that I would run for Congress. I did so in the Third District which included Newton going out to Route 2 to Concord and on out.

In 1968, I ran for that in the primary against a former lieutenant‑governor who had a position in Congress but who had been squeezed out by the fact that there were fewer districts after the new census.

He decided he would like to be in Congress. He was too good for me so I didn’t make it. He didn’t make it either. After that, I was out of a job and the question is, “What now?” I decided that since Nixon won, there might be an opportunity for a Republican such as myself, particularly one that knows something about civil rights, to go down and indeed, there was at HUD.

George Romney hired me to be the Deputy Assistant Secretary of Equal Opportunity. Sam Simmons was the Director. He’s a man well‑known in the black community in Washington, DC. A good guy.

There he is. I was there with him, which was a wonderful way to start things out except for the fact that Sam wanted very much for the blacks to control the civil rights organization, which is the first time they’d had this opportunity. That meant that I didn’t have much to do.

I did not dislike him for this. I could see why he was doing it. I still had little to do. It happened to be that I knew the number two at HUD. I knew his family, he knew mine. I persuaded him. I said, “I think it would be a great idea if we had a trial of this housing allowance program, which I started in Massachusetts which seems to be having some success.”

He was very interested, because at the time, the massive public housing programs that the Johnson administration had started were creating chaos, because they were huge buildings. They only put them in poor areas. It helped to turn the poor areas worse.

Wards 7and 8 were just part of that process. This was going on all over the country. There were some situations, like in St. Louis, where they had built these huge housing projects which had become so bad that they had to tear them down.  You may recall.

Tom:  Pruitt‑Igoe.

Malcolm:  Pruitt‑Igoe, exactly. HUD was open to the idea of a different concept. I persuaded them that we needed to do a trial. Dick Van Dusen who was the number two, a wonderful man, then organized this to occur through Model Cities.

Model Cities was giving money to a number of communities to make the model. We persuaded the one in Kansas City that this would be a good trial to work with Model Cities. We put together a program, which we made available to about 160 families and instead of giving them housing, we gave them money and told them in effect, “Go find your own housing.”

The program worked very well. First of all, it worked fast, because you didn’t have to build the housing, and cheaply, because you didn’t have to build the housing. Also, it worked in terms of spreading out the black community. It worked from a dozen different directions. That was the start.

It so happened that, at the time, in the Senate, Senator Brooke was the senator from Massachusetts, who by the way had beaten my brother after he’d been beaten as governor, he went for Senate and unfortunately, he agreed with Mr. Johnson about the Vietnam War. The Vietnam War was very unpopular in Massachusetts and as a result my brother lost to Senator Brooke.

Senator Brooke became extremely interested in public housing and liked this idea that was being tested out in Kansas City and particularly impressed with the results which we put together in a report.

A member of his staff by the name of Timothy Naegele was in HUD talking to some members of the group that I worked with to put this program out, “Anything new going on around here?”

They gave him the report. He was very impressed with it and Senator Brooke was fabulously impressed with it. He said, “Just what I wanted.” He persuaded the Senate to come up with $100 million to try the program out elsewhere in the United States. They ran about six or seven programs around in various cities in the United States, which all panned out very well.

It was because of that, that over time, because it took a while, they really didn’t get going on this program until…That was in the early ’70s and it was 10 years before this program really took hold and started to grow. Today it is HUD’s largest program. Isn’t that interesting?

Tom:  That’s tremendous. When you were doing that work, were you living here in Georgetown then, when you first came to Washington?

Malcolm:  No. We got a place in Cleveland Park, a beautiful house. It was over by the cathedral. It was at Lowell and 36th Street. You could just see the cathedral right up the road. We lived there for almost 10 years.

Tom:  I see. Then for some reason you decided to make the move and come to Georgetown, is that what happened?

Malcolm:  We realized that with prices going up that we were foolish to rent. I wanted to buy this house and it was not available. We bought another one down on 16th Street, near Massachusetts Avenue, near the Jewish Cultural Center, which Pam did not like and I didn’t like all that much. We sold it. She wanted to go to Georgetown. “OK.” Is there anything else you want to know about?

[laughter]

Tom:  This house, then, was available?

Malcolm:  Yes. This house was owned for many, many years by Ambassador Bohlen. I forget his first name.

Tom:  Charles.

Malcolm:  Charles Bohlen, who was the Ambassador to Russia and was one of two or three or four ambassadors that designed the post‑war. He was a wonderful man.

He not only bought this house, he put this addition on before they could stop him. Which means that we have a master bedroom up there, big bedroom, our own bath, and a study, and down here a large dining area, which is what it was before, and a patio and a garden. Just a beautiful job.

He did that in 1950. When did we buy it? That would have been 1982 or ’83, there was more renovation to do, which we did.

Tom:  The front of the house, which is wooden…

Malcolm:  Correct.

Tom:  …which is much older. Quite old.

Malcolm:  Yes. It was added onto at least one more time and probably two, creeping out back each time.

Tom:  That’s not unusual with most of these houses in our neighborhood.

Malcolm:  When you look at our house, it looks minuscule. Who would want to live in it? Then, this huge…

Tom:  It just unfolds.

Malcolm:  Just unfolds.

Tom:  I became very interested in something you were doing a number of years ago, and still have an interest in, I know, big interest, and that’s charter schools. I’ve never understood what brought you to that topic and that kind of response to public education.

Malcolm:  Again, it was the GI Bill. In the 1980s, it was very clear that public education in this town stank, and the Federal City Council started up a program. Do you remember this at all?

Tom:  Keep going, I might.

Malcolm:  You might. To renovate the school system, they came up with a very good report. They then met with top people, engaged leaders from all parts of the community and sat down with a school system who was part of the report and said, “OK, let’s now make the changes necessary.”

They said, “Yes, we’ll do it. Maybe we’ll do it next year.” They set up a successor organization to monitor and assist with the changes. They put out a report each year. That was in the ’80s, as I said. The last report was in the early ’90s.

The answer was, “We haven’t achieved it.” It was at that time I got very interested in seeing what could be done. I helped form a group with another lady, who was very interested in this entire area, and we worked together. The two of us together set up FOCUS, Friends of Choice in Urban Schools.

The whole point was to give parents choice as to where to send their children. We were first interested in perhaps a program of giving educational money to the various parents and let them go to private school. We then heard of this fabulous program out in Milwaukee and Minneapolis, which was where they, in 1992, they started up a Charter School Program.

We got very interested in that and with thinking about how we could bring that legislation to Washington, DC. At the time, it was 1994 by that time, and the Republicans had taken over the Congress. Newt Gingrich being the Speaker of the House. Although Newt Gingrich was not a wonderful person in many other ways, he had been a teacher.

Tom:  That’s right.

Malcolm:  He was very interested in better education for the city. The break came, and I often give Marion Barry the real credit for starting the Charter School Program, because he bankrupted the city just as Newt took over in Congress. [laughs] Newt had the power.

Marion gave him the power by bankrupting the city. Newt was a Republican. I was a Republican. I worked with his staff and group and tried to get the thing through Congress. I wasn’t able to do much, but I did a little. Once we had the law, we set up the Friends of Choice in Urban Schools to defend it, because it was immediately being attacked by the union and others.

We managed to get the charter school board set up. At that time, there were two boards. One was the public school’s agency, which could also try to set up charter schools, which they did for a time. Their schools were terrible. Eventually, they dropped out of the system saying, “We don’t want to do that.”

The charter school board became the only board. We supported them politically. Also, there were a number of groups interested in starting schools and we set up a program to train them and help them get their charters. We got them started that way.

Tom:  It’s now a thriving part of education in the city.

Malcolm:  Yeah. It’s about 47 percent of all kids.

Tom:  That’s a remarkable thing.

Malcolm:  It’s now under another attack, mostly by the unions.  First of all, it’s very difficult for new charter schools or expanding charter schools to find space. There are empty schools that they can take over, but the mayor won’t give them up. That’s been a long‑term problem.

Tom:  It’s a struggle.

Malcolm:  It’s a real struggle. Also, the cost of construction has gone way, way, way up. The original law did not have funding for space. It was just to fund education. I was able to work with members of Congress to get an addendum through, which gave financial allowances to every child, which the schools could use to find space.

That space, that’s about $3,000, $3,400, per student per year, which is significant. Unfortunately, the cost to provide has gone up to about $4,400 a year. It’s a very big challenge for the schools to find space, particularly the new ones.

That’s a big problem right now. The union is a big part of the problem, saying they don’t wish to see the charter schools expand. They’re the political force behind keeping that money out of the hands of charter schools.

Tom:  You’re still in it.

Malcolm:  I’m still in it. I’m emeritus. I just went to a board meeting today. I intend to, now, that I’m a single person, I can do more. I plan to stay as an assistant to the extent I can in the next few years.

Tom:  I know, Mike, that you have all these years, also had a business of developing and investing in properties.

Malcolm:  Yes.

Tom:  You have this great sense of public service. It would appear to take all of one’s time, and the next project that you’ve been devoting a great deal of energy to is campaign finance reform.

Malcolm:  Yes, a bit of a problem.

Tom:  How does that catch you?

Malcolm:  Let me tell you that I got interested in this question when I ran for Congress. It cost me $75,000 to run the campaign, which, at that time, was about average per Congress congressional election. Today, it’s over a million‑and‑a‑half. I watched the problem grow gradually. I often say that it’s very much like cooking a frog. Do you know how to cook a frog?

Tom:  Slowly. [laughs]

Malcolm:  If you put him in a hot water, it’ll jump. If you put him in tepid water and raise it gradually, you can eventually boil it, which is what’s been happening. The problem has gradually, gradually grown. It started because the unions started getting a lot of favors from Congress using money, and the business got very upset about it.

They hired a man by the name of Lewis Powell, who later became Supreme Court Justice, “What do we do about it?” He said, “Get into the act. Go give your own money.” They started building and expanding their lobbying power. There were 600 registered lobbyists when I came here in Washington in 1969. Today, there are over 12,000.

Tom:  I’m one of them.

Malcolm:  You were one, right. Over 20 for every senator and congressman.

[laughter]

Tom:  That’s a laugh, isn’t it?

Malcolm:  Yeah, it is. What do you do with them? I got very interested in the question. I learned about this group that was beginning to work on it, Issue One. It wasn’t Issue One, at the time, it was something else.

I joined them. I had some ideas as to what might be done. One of them was to see if we could recruit former congressmen, because I knew from members of Congress that I knew that were no longer there that they didn’t like the system at all. One of the reasons they got out was because of it. Amo Houghton was one. Do you remember him?

Tom:  Of course I do.

Malcolm:  He was a classmate of mine at Harvard Business School. We got to be very good friends. He was very interested in the idea of recruiting. We started forming this group and recruited maybe 8 or 10 people.

At that point it became very interesting to Nick Penniman, who runs Issue One. He hired professionals, former congressmen to fill out and he got a guy called Zach Wamp. Do you know him?

Tom:  I do. I remember when he was in Congress.

Malcolm:  He, now, is the Republican side and Tim Roemer is on the Democratic side. We hired both of them. They’re not employees, but we hire them. They have increased it to 202 former congressmen and senators.

This group can be a real power source. We’ve used them individually on many occasions to help out. Over the next election, I’m hoping to be able to work with them as a group. I feel very good about having helped to start that organization.

Tom:  Just a few years ago, you brought your skills and attention and dedication to these national issues, to a neighborhood issue when we thought we were going to lose our corner grocery store.

Malcolm:  I know. It was so important.

Tom:  How did that happen? How did that start? It was for sale, I guess.

Malcolm:  Yeah, it was for sale.

Tom:  Scheele’s.

Malcolm:  The question is, “What would the owner do with it?” He sold it first to a group that decided they wouldn’t do it after all. That sale didn’t go through.

Tom:  The current owner?

Malcolm:  Jordan O’Neill, whose name I know very well. A good guy.

Tom:  Yes, he is.

Malcolm:  We started talking to him about, “Is there any way we can keep it?” He was about to turn it over into a single-family house which would have made him more money. A good deal, but he was willing to give us a lease. When I say “we,” it’s because Marilyn Melkonian was definitely a co‑partner in this. We arranged it that he would give us a 15‑year lease. We would have to raise $70,000.

Tom:  Marilyn lives about as far from Scheelee’s as you do on the other side of 29th Street. You had the effort coming from both sides.

Malcolm:  I knew Marilyn at the time. That turned out very well. Doesn’t it make a huge difference, that store?

Malcolm:  It’s tremendous.

Malcolm:  Tremendous difference.

Tom:  One thing that impressed me about your effort on that was bringing together so many of the residents in this immediate neighborhood.

Malcolm:  We had to raise $70,000. How much did you put in?

Tom:  A great share of that. We dug into our pocket.

Malcolm:  I know you did.

Tom:  That store is a real focus of our neighborhood.

Malcolm:  I feel very good the way that turned out.

Tom:  You have two sons. Did they grow up in this house?

Malcolm:  No, they did not. By the time we were here, there were away at college. Not college but prep school.

Tom:  It’s been a good location for you.

Malcolm:  It has. It has indeed.

Tom:  It’s great to have you in the neighborhood. You’re a good neighbor to all of us.

Malcolm:  They’re such wonderful people, except you, of course…

[laughter]

Malcolm:  …and Sidney.

Tom:  Well, we’re an interesting bunch. Let’s put it that way.

Malcolm:  We are an interesting bunch and very friendly. Not just you, because from time to time, you’re very friendly, but the neighbors could not be nicer.

Tom:  Have you seen changes in the neighborhood in the 35 years you’ve lived here?

Malcolm:  Yeah, but primarily on the other side of this street, that’s changed a good deal. Whereas this side, they tend to stay a lot longer.

Tom:  It’s all for the good.

Malcolm:  All for the good.

Tom Birch:  Mike, your family’s name is well known here in Georgetown because an important feature of the Georgetown Public Library is what we call, not the Peabody room, but “The Peabody Room.”  Which is the repository for all things historical and historic about Georgetown. Is this some family connection that…?

Malcolm Peabody:  He’s a very close relative.

Tom:  Please tell us about it.

Malcolm:  He was fifth cousin to my great‑great‑grandfather. [laughs]

Tom:  That’s pretty intense. How did this George Peabody come to be here in Georgetown?

Malcolm:  His uncle was running a hardware store right about where the Riggs Bank is today. The corner of Wisconsin and…

Tom:  And M.

Malcolm:  …and M Street. Riggs was a friend of his or became a friend of his. Indeed, they started working to put together a financial organization which later became Riggs Bank. Although my ancestor was not involved in that.

He decided that Baltimore, which was a much better place to do business, which indeed it was in that time. It’s faded somewhat.

Tom:  [laughs] Well, it’s a thriving seaport.

Malcolm:  George Peabody during the time that he was here started a little library. I think it was of his own. I’m not sure.

When he left to go to Baltimore, he gave those books to the new library which was here in Georgetown. He may have had something to do with establishing it. I don’t know. They certainly did give him a room, or named a room for him.

He also had a school named after him over in the Capitol area. It’s the Peabody School. There’s a street named for him. Peabody Street, where there is a charter school.

Tom:  Comes around, doesn’t it?

Malcolm:  Then he moved to Baltimore and set up a very, very valuable business which was supporting cotton ‑‑ cotton factory. He would give money to the growers in the South with money he would get from England.

After a while, he decided that it would be better to go where the money was. He went to England. There, he set up a banking organization which became very successful.

He had a very good career there. Among which was he was very helpful in some sort of international show where they were having various…This just may have been the same one that we saw in…Come on. The lady who was queen ‑‑ Queen Victoria.

Tom:  Queen Victoria, sort of an exposition?

Malcolm:  Yeah. It was her husband that put that together.

Tom:  Albert. Right. The Crystal Palace.

Malcolm:  Crystal Palace. I think that my ancestor was very helpful in getting the Americans to be part of that show. In any case, he was not only very successful in business, but he had a great charitable instinct.

When the railroads came into London, they had been coming to the outskirts but they weren’t allowed intown. When they were allowed in, they destroyed a whole lot of housing that was in the poor areas. The stations they built destroyed areas.

They were not recompensed. They just lost their full value. He thought that was terrible.

He started The Peabody Housing Foundation. Have you heard of it?

Tom:  I believe I have.

Malcolm:  Today, it has continued to grow and grow and now has 52,000 units in London.

Tom:  Your DNA is deeply imprinted [laughs] not only with public service but with housing.

Malcolm:  Well, I didn’t realize that.

Tom:   Thank you for telling us about George Peabody. I wanted to make sure that people knew the background of it.

Malcolm:  There’s one more thing.

Tom:  Yes, go on.

Malcolm:  That is, when he reached his 70s or 80s ‑‑ I forget ‑‑ he decided he would retire. He left his bank to his chief subordinate who said to him, “Mr. Peabody, I hope you’ll leave your name. It’s so well‑recognized.”

“I hope you’ll leave it on the bank.” He said, “No. I can’t control what happens with my name and I don’t want it marred in any way. You have to put your own name on it.”

So Junius S. Morgan and his son J.P…Isn’t that an interesting story?

Tom:  It’s wonderful. They were forced to put their own name on the bank.

[laughter]

Tom:  That’s great. I knew there was a good story there. Thanks for that. Appreciate it. This has been a good evening’s chat.

Malcolm:  Yes, indeed.