LSE was founded in 1895. The decision to create the School was made by four Fabians at a breakfast party at Borough Farm, near Milford, Surrey, on 4 August 1894. The four were Beatrice and Sidney Webb, Graham Wallas and George Bernard Shaw.
LSE was founded after a bequest to the Fabian Society of some £20,000 by Henry Hunt Hutchinson. The Hutchinson bequest coincided not just with the Fabians' ideas but also with a wider movement in society.
The aim of the School was the betterment of society. By studying poverty issues and analysing inequalities, the Webbs sought to improve society in general. Sidney Webb in particular, noted Beatrice in her diaries, had a vision of 'a centre not only of lectures on special subjects but an association of students who would be directed and supported in doing original work.' Other donations were solicited to add to the Hutchinson legacy and the School developed rapidly through private philanthropy.
LSE held its first classes in October 1895 in rooms in John Street, moving a year later to 10 Adelphi Terrace. In 1900 LSE was recognised as a faculty of economics in the newly-constituted University of London and in 1901 the Faculty degrees were announced as the BSc (Econ) and DSc (Econ) - the first university degrees principally dedicated to the social sciences.
In 1902 the School moved formally to its present site, in Clare Market and Houghton Street, off the Aldwych. In May 1920 King George V laid the foundation stone of the
The School's motto was adopted in February 1922. Suggested by Professor Edwin Cannan from Virgil's Georgics, the phrase rerum cognoscere causas means to know the causes of things. The industrious beaver emblem was chosen in the same year.