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The Polytechnic Institution was opened in August 1838 to provide the public with (in the words of its prospectus of 1837) 'a practical knowledge of the various arts and branches of science connected with Manufactures, Mining Operations, and Rural Economy'. The idea was that of Charles Payne, former manager of the Adelaide Gallery in the Strand. William Mountford Nurse, a builder, provided the initial capital. Sir George Cayley, landowner and aeronautical scientist, became chairman of the provisional committee and later of the directors. His influence helped to raise the necessary share capital. A house at no 5 Cavendish Square was purchased, and a new gallery building (designed by James Thompson) added, with an entrance on Regent Street. The Institution received its charter of incorporation in 1839. The Gallery housed a large exhibition hall, lecture theatre, and laboratories. Public attractions included exhibitions, working machines and models, scientific lectures, rides in a diving bell - a major attraction - and, from 1839, demonstrations of photography.

In 1841 Richard Beard opened the first photographic studio in Europe on the roof of the building. The Polytechnic became known for its spectacular magic lantern shows, pioneered by Henry Langdon Childe (d 1874), and a new theatre was added in 1848. John Henry Pepper (1821-1900) was appointed lecturer and analytical chemist in that year. He was its most famous showman, also expanding the teaching role of the Polytechnic, which began evening classes in 1856 under the auspices of the Society of Arts. By the 1870s these were formalised under the Polytechnic College. By 1841 the Institution was calling itself the Royal Polytechnic, probably due to the patronage of Prince Albert. Expansion gradually gave way to financial difficulty, reflecting a long-standing tension between education and the need for profit. A fatal accident on the premises in 1859 caused the first company to be wound up and a new one formed. Various regeneration schemes were considered, but in 1879 a fire damaged the roof, precipitating the final crisis. By 1881 the Royal Polytechnic Institution had failed, the assets sold at auction and the building (no 309 Regent Street) put up for sale. It was purchased by the philanthropist Quintin Hogg, and the RPI succeeded by his Young Men's Christian Institute (later known at the Regent Street Polytechnic), which opened in 1882. Hogg lived for some years in the house in Cavendish Square.