Nutty Trivia For centuries hand ground peanuts were made into a paste and eaten by the Peruvian Indians and African tribes. Ambrose Staub, a St. Louis doctor, invented a peanut mill in 1903 to make butter for elderly patients with weak teeth. Eventually, the idea caught on and these days peanut butter is a popular and nutritious staple in the American diet. However, no one is quite certain who the first person was to combine peanut butter with jelly to make the now famous peanut butter and jelly sandwich.