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The Athenaeum was founded in 1824 at the instigation of John Wilson Croker, then Secretary to the Admiralty, who was largely responsible for the organisation and early development of the Club. In March 1823 he had written to Sir Humphrey Davy, who was a personal friend and also at that time the president of the Royal Society, proposing the foundation of a club "for Literary and Scientific men and followers of the Fine Arts". A Committee was formed, the names being proposed by Croker, who wrote that "all depends on having a Committee with a great many good names and a few working hands". The first meeting was held on 16 February 1824, when 14 men were present, and a small sub-committee was appointed with full powers to do what was necessary to get the club started. It was resolved that there should be 400 members, of whom 300 were to be appointed by the Committee and and the remainder elected by ballot. This first committee also included Sir Thomas Lawrence (who designed the club seal with the head of Athene), Francis Chantrey and Viscount Palmerston. Sir Humphrey Davy became the first Chairman of the club and Michael Faraday the first secretary, though he soon found that he could not spare the time required and resigned, though he remained as a member of the club.The total number of members was increased to 1,000 by December 1824.

By May 1824 temporary premises had been rented at 12 Waterloo Place, and Croker and the Committee turned their minds to providing a permanent home for the club. Decimus Burton, then 24 years old, was commissioned to design a permanent clubhouse. A site was chosen on the north side of Pall Mall East but was found to be too small. The next proposed site was on the east side of Trafalgar Square , but then the government decided to demolish Carlton House and develop the site and a portion of it was offered to the Athenaeum. The offer was accepted and a long lease was granted by the Crown.

Decimus Burton designed the club house in Neoclassical style. The main entrance on Waterloo Place has a Doric portico with paired columns. The original building had two principal storeys; the third and fourth were added at the end of the19th century. A statue of Pallas Athene by Edward Hodges Baily stands above the porch. There is a continuous balustrade on the first floor, with an outstanding but costly frieze depicting the Panathenaic procession, copied from the Parthenon, above the first floor windows. Croker, who was much involved in the building of the clubhouse, was determined that it should have the frieze, despite the cost, and resisted pressure from some members (in those pre-refrigeration days) that an ice-house be part of the scheme; leading some wit to compose the rhyme:

I'm John Wilson Croker, I do as I please. Instead of an Ice-House I give you a... Frieze!

The frieze was executed by John Henning at a cost of £1,300. Building commenced in 1827 and was completed by 1830. The total cost was £43,101 14s 8d. This exceeded the estimate by £2,226, attributed to the cost of gas fittings and furniture

The new building was complete by early 1830 and the first general meeting was held there on 30 May 1830. However there was a cash deficit of some £20,000 and in 1832 it was decided to allow 200 supernumerary members, half selected by the committee and half elected by the club. Additional expenditure was soon required to improve the ventilation of the clubhouse and because of recurrent troubles with the gas lighting (it was one of the first buildings to be lit by gas) and it was decided in 1838 to increase the permitted number of members to 1,200, which made it necessary to elect a further 40 members. These became known as "the Forty Thieves" and comprised some very distinguished men including Charles Dickens and Charles Darwin.

The Duke of Wellington was a founding member of the club and the stone installed at his request to assist him in mounting his horse can still be seen on the pavement outside the front porch.

Sir Thomas Lawrence designed the club seal: a head of Athena inside an oval surrounded by the legend "ATHENÆUM CLUB·PALL MALL".

In 1886 the clubhouse was lit by electricity, a relative innovation for London buildings *** an innovation in London

The Athenaeum has always been a club for members with intellectual, literary, scientific and artistic interests. Apart from the ordinary members of the club, who require to be proposed and seconded and to have support from a number of other existing members, a special rule allows the committee to also admit men (and now women) "... of distinguished eminence in Science, Literature, or the Arts, or for Public Service".