John Jacob Astor

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An American fur trader, merchant, and capitalist, John Jacob Astor (1763-1848) used his profits from fur trading to invest in a wide range of business enterprises. By the time of his death he was the richest man in America.

John Jacob Astor was born in Waldorf, near Heidelberg, Germany, on July 17, 1763. He was named after his father, a poor but convivial butcher. In spite of the family's poverty, Astor was sent to the local schoolmaster, who provided him with an exceptional education, considering the times. When Astor reached the age of 14, his father decided that his son should work with him. The boy assisted for 2 years before, in 1779, he struck out on his own. He joined a brother in London, where he learned English and worked to earn passage money to America. In 1783, after the peace treaty ending the American Revolution had been signed, he sailed for the United States to join another brother who had emigrated earlier. He landed at Baltimore in March 1784.

Astor soon joined his brother in New York and began to demonstrate his talent for business. He received a shipment of flutes from England, which he offered for sale. He also worked for several furriers and began buying furs on his own. In 1784 and 1785 Astor made furbuying trips to western New York for his employers, purchasing furs for himself at the same time. He acquired enough furs to make a trip to England profitable. In London he established connections with a reputable trading house, signed an agreement to act as the New York agent for a musical instrument firm, and used his profits from the furs to buy merchandise suitable for trade with the Native Americans. Not yet 22, he had already proved himself a shrewd and competent businessman.

His initial success convinced Astor that a fortune could be made in the fur trade. He began to spend more time managing and expanding his business. Between 1790 and 1808 his agents collected furs from as far west as Mackinaw, Mich. The Jay Treaty and the British evacuation of forts in the Old Northwest worked to Astor's advantage, and he expanded his operations in the Great Lakes region. Through an arrangement with the British Northwest Company, he purchased furs directly from Montreal. By about 1809 he was recognized as one of the leading fur traders in the United States.

Following the Louisiana Purchase, Astor turned his attention to the fur trade in the Pacific Northwest. Through shrewd political maneuvers he obtained a charter for the American Fur Company. His plan was to establish a main fort at the mouth of the Columbia River, with sub-forts in the interior. His fleet of ships would collect the furs and sell them in China, where goods would be purchased for sale in Europe; in Europe merchandise could be bought to sell in the United States when the ships returned.

Although the town of Astoria was established on the Columbia, the company's operations were unsuccessful. After the War of 1812 Astor renewed his efforts to gain control of the fur trade in North America. Through influence in Congress he secured legislation that prohibited foreigners from engaging in the trade except as employees and that eliminated the government's trading post serving independent traders. By the late 1820's he monopolized the fur trade in the Great Lakes region and most of the Mississippi Valley. This monopoly put him into direct competition with the Rocky Mountain Fur Company and British fur interests in the Pacific Northwest. However, by 1830 Astor's interest in the company had begun to decline.

Through his dealings in the fur trade Astor became involved in general merchandising. During the 1790s he had begun to import and sell a large variety of European goods. During this early period he showed little interest in establishing trade relations with China. Between 1800 and 1812, however, his trade with China expanded and became an integral part of his business dealings in Europe. The War of 1812 temporarily disrupted his plans, but it gave him an opportunity to purchase ships at a bargain price since declining trade had made merchants anxious to dispose of their fleets. After the war Astor had a sizable fleet of sailing vessels and again became active in the China and Pacific trade. For a time he was involved in smuggling Turkish opium into China but found the profits were not worth the risk and abandoned this venture. Between 1815 and 1820 he enjoyed a commanding position in the China trade. Thereafter his interest declined, and he turned his attention to other business activities. One explanation for Astor's success as a merchant was that he had the capital to buy superior merchandise at a low cost and a fleet of ships that could transport the goods to markets more quickly than his rivals.

Astor retired from the American Fur Company and withdrew from both domestic and foreign trade in 1834. He turned to other investments, including real estate, moneylending, insurance companies, banking, railroads and canals, public securities, and the hotel business. The most important was real estate. He had invested some capital in land early in his career. After 1800 he concentrated on real estate in New York City. He profited not only from the sale of lands and rents but from the increasing value of lands within the city. During the last decade of his life his income from rents alone exceeded $1,250,000. A reliable estimate placed his total wealth at $20-30 million (the greatest source being his land holdings on Manhattan Island) at his death in 1848, at the age of 84.

Further Reading

The most complete biography of Astor is Kenneth Wiggins Porter, John Jacob Astor, Business Man (2 vols., 1931). A somewhat critical work which deals extensively with Astor's interest in the fur trade is John Upton Terrell, Furs by Astor (1963). See also Washington Irving, Astoria (1836; repr. 1961); Meade Minigerode, Certain Rich Men (1927); and Harvey O'Connor, The Astors (1941). A background discussion of the fur trade that includes Astor is provided by Bernard De Voto, Across the Wide Missouri (1947). Social histories of New York that discuss Astor are Arthur Pound, The Golden Earth: The Story of Manhattan's Landed Wealth (1935); Frederick L. Collins, Money Town (1946); and Edward Robb Ellis, The Epic of New York City (1966).

(1763-1848), fur trader, businessman, and real estate investor. Astor began life as one of twelve children of a poor German butcher and died the richest man in America. The making of a great fortune was the aim and purpose of Astor's life, and he accomplished it by dominating the American fur trade and investing his profits in the real estate of burgeoning New York City. Shortly before his death, Astor was asked if he would have done anything differently with his life. He is supposed to have replied that his only regret was not having bought all of Manhattan.

Astor was born in the small town of Waldorf, near Heidelberg, Germany. At twenty he followed his older brother Henry to New York, arriving with hardly a penny. He became a clerk to a fur trader and mastered that business quickly. His employer was impressed with Astor's intelligence and energy and entrusted him with more and more responsibilities, including buying furs upstate and selling them in London.

Before long Astor was operating on his own account and prospered at once. He began putting his profits into Manhattan real estate, investing nearly $7,000, a large sum of money in those days, between 1789 and 1791. Astor's strategy was to buy, very cheaply, land that lay far beyond the developed area of the city and then to wait for the city's rapid growth to reach his lots. In 1803, for instance, he paid $25,000 for seventy acres located more than an hour's ride north of what were then the city's physical limits. By the 1870s the land was worth $20 million to the Astor family. Today the area is known as Times Square.

Because China was an excellent market for furs in 1800, Astor entered the China trade and earned large profits from it, often as much as $50,000 from a single voyage. In 1808 he established the American Fur Company to exploit the newly acquired Louisiana Purchase and the Pacific Northwest. He built a trading post at the mouth of Oregon's Columbia River in 1811, naming it Astoria. This grand scheme fell apart when one of Astor's ships was lost at sea and the War of 1812 cost him the support of his allies in Canada. It was Astor's one great failure.

Regardless, Astor turned the War of 1812 to good account when he made the federal government, desperate for cash, a large loan, paying only about forty cents on the dollar for government bonds. As always it was the increase in his fortune that mattered to Astor; patriotism did not deter him from driving any but the hardest of bargains.

By the end of the 1820s Astor had a near monopoly of the American fur trade, but he realized that because of the vagaries of fashion and rising costs, the trade was becoming less profitable. He sold out all his fur interests in 1834 and spent the last fourteen years of his life speculating in New York real estate.

When Astor died in New York, he left an estimated $40 million, a sum several times larger than any other American fortune of the day. He left nearly all of it to his son, but gave $400,000 to establish the Astor Library, one of three that would later merge to form today's great New York Public Library.

Bibliography:

Kenneth W. Porter, John Jacob Astor, Business Man (1931); David Sinclair, Dynasty: The Astors and Their Times (1984).

Author:

John Steele Gordon

See also Robber Barons.

Astor, John Jacob (ăs'tər), 1763-1848, American merchant, b. Walldorf, near Heidelberg, Germany. At the age of 16 he went to England, and five years later, in 1784, he arrived in Baltimore, penniless. He later went to New York City, where in a few years he entered into business with a small shop for trade in musical instruments and furs. Shrewdness, driving ambition, and stolid concentration brought him to a commanding position in the burgeoning economy of the United States. He became a leader of the China trade and was an astute investor in lands, principally in and around New York City, but he is perhaps best remembered as a fur trader. He chartered the American Fur Company (1808) and founded subsidiary companies-the Pacific Fur Company (see Astoria, Oreg.) and the South West Company (operating around the Great Lakes). His firm exercised a virtual monopoly of the trade in U.S. territories in the 1820s and still did when he retired from it in 1834. The wealthiest man in the United States at his death, he left a fortune that has continued to make the family name prominent. Part of his money went to found the Astor Library (see New York Public Library). His Astor House was a forerunner of family hotel properties that much later included the Astor Hotel and the Waldorf-Astoria.

Bibliography

See biographies by J. U. Terrell (1963) and K. W. Porter (1936, repr. 1966).

Quotes:

"A man who has a million dollars is as well off as if her were rich."

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