John Jacob Astor

German-born American fur trader and financier

• Born: July 17, 1763
• Birthplace: Waldorf, near Heidelberg, Baden (now in Germany)
• Died: March 29, 1848
• Place of death: New York, New York

Combining a shrewd eye for profits with relentless determination, Astor was, in turn, the first American monopolist, the country’s leading fur trader, its leading trader to China, and “landlord of New York.” By the end of his life, he was by far the richest man in the United States.

Early Life

It is known that John Jacob Astor was born near the ancient German city of Heidelberg, but information concerning the origins of his family is incomplete. It seems certain that the Astors (or Ashdoers) were not originally German. The first Astor in Germany arrived in either the sixteenth or the eighteenth century, was either Italian or Spanish, and was either a religious refugee or a soldier, depending on which story is preferred. In any case, the Astor family was not a wealthy one. Astor’s father was a butcher who had very little aptitude for business. His mother, fortunately, was methodical and frugal, qualities she passed on to her four sons. John Jacob was the youngest.

With the death of his mother and the arrival of a stepmother, John Jacob became very unhappy and discontented. He left home at the age of sixteen or seventeen and worked his passage down the River Rhine to join an older brother in London. For two or three years, John Jacob worked in his brother’s piano manufacturing company, learning English and saving money to travel to America, where a second brother was established as a butcher in New York.

In November, 1783, Astor set sail bound for Baltimore with money enough to tide him over, a stock of German flutes to trade, and a berth in steerage for the trip. The ship arrived in the Chesapeake in January but remained icebound for two months, unable to reach its destination. During that time, Astor became acquainted with a young German returning to America, where he had previously been a fur trapper and trader. Once aroused to the potential for fabulous profits, Astor inquired into the minutest details of the trade and determined to enter the fur business himself. In March, 1784, Astor arrived in New York and soon obtained a job with an old Quaker fur trader. His marriage to Sarah Todd in 1785 brought him a handsome dowry of three hundred dollars, connections with the upper classes of New York City and with various sea captains, and a wife with great business ability of her own. The following year, Astor was able to set up business on his own account as a fur trader and agent for the sale of imported musical instruments.

Life’s Work

John Jacob Astor quickly became affluent. To be truly successful as a fur trader, Astor had to compete with the giant Hudson’s Bay Company and the Northwest Company, both based in Montreal, and which, between them, dominated much of the trade. With a secure financial base from the music shop run by his wife, Sarah, he was able to spend the time to gain the confidence of trappers and Indians in upstate New York through personal contact and by offering a better price than his enormous rivals.

In 1789, Astor was invited to attend the annual meeting of the Northwest Company at Fort William on Lake Superior. What he saw convinced him that if he was ever to compete seriously, he had to develop trade in volume. Consequently, Astor began to develop a regular trade in furs between Montreal and London, and between London and New York (direct trade between Canada and the newly independent United States was illegal until 1796). At the same time, he continued to develop his contacts and agents in the woods in anticipation of the day when he could replace the two great Canadian fur companies.

As his income soared, Astor took his brother’s advice and began to invest in real estate. To further his financial interests, John Jacob began to frequent the meeting places of powerful city merchants and became a member of the Masons. By the time of Jay’s Treaty in 1796, by which Great Britain agreed to leave the rich hunting grounds south of the Great Lakes and to end the trade ban on goods from Canada to the United States, Astor was in a good position to attempt to rival the great fur companies. He was, by then, one of the leading merchants of New York, estimated to be worth fifty thousand dollars.

In 1800, Astor invested in a cargo of furs bound for China. His share of the profit from this one voyage was estimated at fifty-five thousand dollars and was reinvested in the China trade. By 1803, he had ships of his own built and was becoming the leading American merchant in the China trade. All the while, Astor continued to invest several thousand dollars per year in Manhattan real estate, trading in anything that would bring a good profit from the return journeys of his fur ships, and extending his contacts among fur trappers in the woods.

In 1808, Astor was ready to exploit the possibilities opened up by the Louisiana Purchase . He founded the American Fur Company to monopolize the fur trade west of the Mississippi. The company was capitalized at one million dollars, all of it supplied by Astor himself, and was blessed by the American government, which was full of Astor’s business acquaintances and clients. The key to Astor’s scheme was to establish a settlement at the mouth of the Columbia River on the Pacific coast—to be called Astoria—as a clearinghouse for furs from animals caught in the region; they could then be sent directly to China, the world’s best market. Never before had the merchant taken such a big gamble.

The venture was accompanied by great suspicion between Americans hired to run the settlement and the Scots-Canadians hired for their expertise. It was a suspicion shared by Astor himself and was compounded by his assignment of responsibilities. The result was the complete failure of an overland expedition sent to set up trading posts on its way to Astoria and the subsequent loss of the ship that Astor sent out to build the settlement. Worse yet, the War of 1812 allowed the Northwest Company to send an armed ship to Astoria to claim it for Great Britain. Astor’s Scots-Canadians sold the settlement to their former employers, the Northwest Company, for a fraction of its real value. It was Astor’s greatest setback, one of remarkably few. The nearly one-million-dollar loss sustained by Astor was subsequently made up from profits derived from his investment in American war bonds.

After the war, Astor was in a strong position. He had been able to buy several ships at cheap rates and had invested in real estate and mortgages, both at low prices as a result of wartime depression and a British blockade. Also, despite the Astoria catastrophe, the American Fur Company after 1815 was able to drive out or take over all rivals in the rich Missouri country and around the Great Lakes. It achieved a complete monopoly by 1822.

During the decade of the 1820’s, Astor wound down his interests in the China trade as commodities such as tea glutted the market. He shifted his investments to transportation, insurance companies, banks, federal and state securities, and, most heavily, to real estate. During the 1830’s, returns from land and property in Manhattan were so great that Astor decided to liquidate all of his interests in commerce and concentrate instead on his investments, particularly real estate. By this time, the fur trade was in decline and so was Astor, now in his seventies.

To perpetuate his name, Astor built the finest hotel in New York, Astor House, and commissioned the writing of a book defending his actions in the Pacific Northwest. Both Astor House and the book Astoria , by Washington Irving, were completed in 1836. Both were immediate and conspicuous successes.

The Panic of 1837 drove many businesspeople to ruin, but not Astor. His great wealth cushioned him and, indeed, he took advantage of the economic depression to extend his investments in Manhattan real estate. With recovery came a huge influx of immigrants, all desperately in need of housing. The value of Astor’s investments soared as New York expanded as never before.

John Jacob Astor died on March 29, 1848, after suffering for several years from palsy, extremely poor circulation, and painful stomach disorders. To his son, William Backhouse Astor, he left the bulk of his fortune.

Significance

John Jacob Astor’s career spanned the period from the infancy of the young American republic to the early years of its industrial revolution. It was a time of great commercial opportunity. No other single individual was able to capitalize on the possibilities with such singular success. His drive and determination to make money dominated all those with whom he did business. It mattered little to Astor in what branch of commerce or finance he made money; profit margins were all that counted. Astor is principally remembered, however, for his achievement in building the first private monopoly in United States history. It was his American Fur Company that, over the course of fifteen years, attained almost total control over the fur trade in the United States. His purchase of large tracts of Manhattan and the dispersal of investments in banking, insurance, and government stocks secured Astor’s fortune for his family and ensured that it would thrive.

Bibliography

Chittenden, Hiram M. The American Fur Trade of the Far West. New York: Press of the Pioneers, 1935. Reprint. Stanford, Calif.: Academic Reprints, 1985. A comprehensive examination of the complex structure and pattern that existed before and during the establishment of the American Fur Company. It follows the policies and actions by which independent trappers and companies were driven out of business or incorporated into Astor’s company, and the ways in which the Native Americans were dealt with, employees kept in line, and the trade rationalized.

Gebhard, Elizabeth L. The Life and Ventures of the Original John Jacob Astor. Hudson, N.Y.: Bryan Printing, 1915. A highly colored and favorable account of the great man, written by a descendant of Astor’s friend and fellow German immigrant, John Gabriel Gebhard. Full of detail.

Haeger, John Denis. John Jacob Astor: Business and Finance in the Early Republic. Detroit: Wayne State University Press, 1991. Describes Astor’s life and career as a merchant, fur trader, and speculator to examine American economic development between 1790 and 1860.

Irving, Pierre M. The Life and Letters of Washington Irving. 4 vols. New York: G. P. Putnam’s Sons, 1863. An account of the great literary figure by his nephew. Washington Irving was a longtime friend of Astor, which was why he was commissioned to write Astoria. Pierre and his uncle lived in Astor’s house for two years preparing materials for the novel. There are a number of revealing letters and episodes concerning Astor.

Irving, Washington. Astoria. Philadelphia: Carey, Lea, and Blanchard, 1836. Reprint. Edited by Richard Dilworth Rust. Boston: Twayne, 1976. This is the authorized version of Astor’s astounding career, written by a longtime friend and literary client. It is the most detailed version of Astor’s early career and serves as the main reference point for all later accounts. However, some of its facts have been questioned, because Irving seems to have accepted many of the myths propagated about, and by, Astor. The book was a best-seller when it appeared.

Madsen, Axel. John Jacob Astor: America’s First Multimillionaire. New York: John Wiley & Sons 2001. Straightforward recounting of Astor’s life and business enterprises.

Minnigerode, Meade. Certain Rich Men. New York: G. P. Putnam’s Sons, 1927. Of the seven men studied, Astor merits the second chapter, following his friend Stephen Girard, the banker. This is a balanced account that stresses Astor’s ruthless business practice and his love of family.

Porter, Kenneth Wiggins. John Jacob Astor: Business Man. 2 vols. Cambridge, Mass.: Harvard University Press, 1931. Easily the most detailed and informative account of Astor’s career, questioning some of Irving’s assumptions. Porter concentrates largely on Astor’s financial interests but does not neglect the personal aspects of his subject.

Sinclair, David. Dynasty: The Astors and Their Times. London: J. M. Dent & Sons, 1983. A book primarily about the fortune bequeathed by John Jacob Astor. It offers an iconoclastic view that subjects Astor to biting criticism in places and that is informed throughout by a skepticism about business practices and “great men.” A good corrective to some of the favorable accounts cited above.