Inquiring minds want to know. (At least, my inquiring mind wanted to know.)
So, to save you all the legwork, I did a bit of it myself.
John Newbery (1713-1767) was a jack of all trades, mostly involving books. He operated a bookshop in London called The Bible and Sun (love that name!). He published books, he commissioned books, he founded magazines. He even wrote a book in 1744: A Little Pretty Pocket-Book. This became the first in a series of books aimed at entertaining and educating young people. By the end of his life, he'd written several more.
But he didn't found the Newbery award.
That honor goes to Frederic G. Melcher, a co-editor of Publisher's Weekly in the early 1900s. In 1920, he started publishing issues devoted to children's books, and in 1921, he proposed to the American Library Association in 1921 that they give out an award to honor children's books. In his original proposal, the purpose of the Newbery was
"To encourage original creative work int he field of books for children. To emphasize to the public that contributions to the literature for children deserve similar recognition to poetry, plays or novels. To give those librarians, who make it their life work to serve children's reading interests, and opportunity to encourage good writing in this field."(As an interesting side note, Melcher also came up with the Caldecott medal idea, too.)
The award criteria for a Newbery Medal is as follows: The committee members need to consider the interpretation of the theme or concept; the presentation of the information; the development of plot; the delineation of characters; delineation of setting; an appropriateness of style. (Though not necessarily in all of the elements, but it should be excellent in all the qualities pertaining to the book -- the reason why poetry and biography books can win.) They need to consider excellence of presentation for a child audience. They need to consider each book as a contribution to literature. And, my favorite part: "The award is not for didactic intent or for popularity."(I found this information here.)
So. There you have it. I thought it would clear up why The Story of Mankind won. It doesn't, though, does it? All I can do is assume that standards of excellence and presentation for a child audience were different in 1922 then they are today.