He was born at Lower Park House, Lower Park, Bewdley in Worcestershire, England to Alfred Baldwin and Louisa Baldwin (née MacDonald) and through his Scottish mother was a first cousin of the writer and poet Rudyard Kipling. The family owned the eponymous iron and steel making business that in later years became part of Richard Thomas and Baldwins.
Baldwin had his early education at St Michael's School and Harrow School. He later wrote that "all the king's horses and all the king's men would have failed to have drawn me into the company of school masters, and in relation to them I once had every qualification as a passive resister." Baldwin then went on to the University of Cambridge, where he studied history at Trinity College. His time at university was blighted by the presence, as Master of Trinity, of a former schoolmaster who had punished him at Harrow for writing a piece of schoolboy smut. He was asked to resign from the Magpie & Stump (the Trinity College debating society) for never speaking, and, after receiving a third-class degree in history, he went into the family business of iron manufacturing. His father sent him to Mason Science College (the future University of Birmingham) for one session as preparation. As a young man he served very briefly as a Second Lieutenant in the Artillery Volunteers at Malvern. Baldwin married Lucy Ridsdale on 12 September 1892.
Baldwin proved to be very adept as a businessman, and acquired a reputation as a modernising industrialist. Later he inherited £200,000 and a directorship of the Great Western Railway upon the death of his father in 1908.
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