Helena Blavatsky
Meeting Henry Steel Olcott and the foundation of the Theosophical Society

Blavatsky was intrigued by a news story about William and Horatio Eddy, brothers based in Chittenden, Vermont, who it was claimed could levitate and manifest spiritual phenomena. She visited Chittenden in October 1874, there meeting the reporter Henry Steel Olcott, who was investigating the brothers' claims for the Daily Graphic. Claiming that Blavatsky impressed him with her own ability to manifest spirit phenomena, Olcott authored a newspaper article on her. They soon became close friends, giving each other the nicknames of "Maloney" (Olcott) and "Jack" (Blavatsky). He helped attract greater attention to Blavatsky's claims, encouraging the Daily Graphics editor to publish an interview with her, and discussing her in his book on Spiritualism, People from the Other World (1875), which her Russian correspondent Alexandr Aksakov urged her to translate into Russian. She began to instruct Olcott in her own occult beliefs, and encouraged by her he became celibate, tee-totaling, and vegetarian, although she herself was unable to commit to the latter. In January 1875 the duo visited the Spiritualist mediums Nelson and Jennie Owen in Philadelphia; the Owens asked Olcott to test them to prove that the phenomena that they produced were not fraudulent, and while Olcott believed them, Blavatsky opined that they faked some of their phenomena in those instances when genuine phenomena failed to manifest.

Drumming up interest for their ideas, Blavatsky and Olcott published a circular letter in Eldridge Gerry Brown 's Boston -based Spiritualist publication, The Spiritual Scientist. There, they named themselves the "Brotherhood of Luxor", a name potentially inspired by the pre-existing Hermetic Brotherhood of Luxor. They began living together in a series of rented apartments in New York City, which they decorated with taxidermied animals and images of spiritual figures; their life was funded largely by Olcott's continued work as a lawyer. Their last such apartment came to be known as the Lamasery. Allegedly encouraged by the Masters, Blavatsky and Olcott established the Miracle Club, through which they facilitated lectures on esoteric themes in New York City. It was through this group that they met an Irish Spiritualist, William Quan Judge, who shared many of their interests.

At a Miracle Club meeting on 7 September 1875, Blavatsky, Olcott, and Judge agreed to establish an esoteric organization, with Charles Sotheran suggesting that they call it the Theosophical Society. The term theosophy came from the Greek theos ("god(s)") and sophia ("wisdom"), thus meaning "god-wisdom" or "divine wisdom". The term was not new, but had been previously used in various contexts by the Philaletheians and the Christian mystic, Jakob Böhme. Theosophists would often argue over how to define Theosophy, with Judge expressing the view that the task was impossible. Blavatsky however insisted that Theosophy was not a religion in itself. Lachman has described the movement as "a very wide umbrella, under which quite a few things could find a place". On foundation, Olcott was appointed chairman, with Judge as secretary, and Blavatsky as corresponding secretary, although she remained the group's primary theoretician and leading figure. Prominent early members included Emma Hardinge Britten, Signor Bruzzesi, C.C. Massey, and William L. Alden; many were prominent and successful members of the establishment, although not all would remain members for long.
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