John Jacob Astor and the First Great American Fortune
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Raleigh, NC: Lulu Co. Retrieved October 9, Bloomington, IN: Xlibris Corporation. An American merchant". New International Encyclopedia 1st ed. New York: Dodd, Mead. Encyclopedia Americana. Retrieved September 4, Oxford University Press. Johann Jakob Astor - Ein Lebensbild , p. New York: D. German Historical Institute. Retrieved July 7, January Archived from the original on November 10, March 20, New York: The Society.
December 8, Retrieved December 9, Pacific Fur Company. Tonquin Beaver Albatros. American frontier. John Jacob Astor William H. Boring Jonathan R. Davis George Flavel C. Western genre Western lifestyle Western wear. Anchorage Iditarod Nome Seward Skagway. Creede Denver Telluride Trinidad.
Augustine St. Marks Tallahassee. Fort Boise Fort Hall. Fort Dearborn. This amount was a significant sum of money in and enough to help the couple establish a business. Astor was about five feet nine inches tall. Newspaper stories about him later in life described him as slightly over-weight, boxy in shape. He was said to speak with a heavy German accent and write without much regard to correct spelling or grammar. Astor was eventually highly successful as a trader in furs, which meant buying animal skins either from Native Americans or from white " mountain men " who ventured into the wilderness of the Rocky Mountains and the Pacific Northwest to find and trap animals.
Astor then sold the furs he had bought to manufacturers of fur coats or fur hats. For the most part, Astor hired others to negotiate directly in the purchase of furs, although he occasionally ventured out himself, once going as far as Mackinaw in Michigan. In building his fortune, Astor took full advantage of being in the right place at the right time. He entered the fur business just before furs, and in particular fur hats for men, became enormously popular. He also entered the business just when the United States was on the brink of rapidly expanding into the interior of the North American continent, well beyond the narrow strip of territory east of the Appalachian Mountains that English immigrants had begun colonizing with early settlements in Virginia and Massachusetts.
In , the United States and Britain signed a treaty known as the Jay Treaty after American negotiator John Jay [—] , which resulted in British withdrawal from military forts in the so-called Northwest Territory the area around the Great Lakes. The treaty also opened new opportunities for Americans to trade with Canada which in was British territory. The effect of the treaty for Astor was to enable him to expand his fur-trading business rapidly.
Astor traveled to London in in an effort to supplement his growing fur business with trade overseas. This license enabled Astor's ships to trade in any port controlled by the company. Although he was already a well-established businessman by then, Astor traveled at the lowest possible cost in a travel class called steerage. Steerage class entitled him to a small bunk bed deep inside the ship. It was the same sort of ticket he had used to travel to the United States from London fifteen years earlier. It was characteristic of Astor for his lifetime to make tremendous amounts of money but to spend as little as possible.
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In April , President Thomas Jefferson —; served — signed a treaty with France to acquire a vast stretch of wilderness west of the Mississippi River. The next year, Jefferson sent Captains Meriwether Lewis — and William Clark — on an expedition to explore the new territory. Their demanding trip blazed a wilderness path that eventually made it possible for Astor to make a fortune by expanding his fur-trading business westward into the areas newly acquired from France. More directly, it enabled Astor to complete with the Northwest Company, a well-established English company already trading in furs from the American West.
Astor's contribution was not in blazing a new path through the wilderness. Instead, his contribution was in having a grand vision of how to earn a business fortune from the fur trade and in acquiring the political influence and financial resources to make it happen. In , Astor organized the American Fur Company , with himself.
John Jacob Astor and the First Great American Fortune by Alexander Emmerich
His business plan was to establish a fortress in Oregon, where the Columbia River drains into the Pacific Ocean. There, Native American and white fur trappers could bring their furs to sell to Astor. In turn, ships owned by Astor would carry the furs to China, across the Pacific Ocean , where they could be sold. While in China, Astor could purchase Chinese tea and other goods that the same ships could bring back to the East Coast of the United States. It was a huge, even magnificent, global trading plan, and eventually Astor made it succeed.
The first step was establishing a fur-trading post in Oregon, which Astor called Astoria. Set up in , the plan almost immediately fell victim to fighting between the United States and Britain in the War of — Threatened with an imminent British military occupation of Astoria, Astor's representative sold the outpost to the Northwest Company, Astor's Canadian-owned main competitor in the fur trade, at a significant loss.
It seemed that the War of had sunk Astor's scheme before it could get off the ground. But the war actually proved to be a business boon for Astor in another area. The U. In , at the end of the war, Astor and other investors bought government bonds for about eighty-two cents on the dollar meaning that the government promised to pay back one dollar in exchange for a loan of eighty-two cents—an interest rate of nearly 22 percent.
Over the next twenty years, Astor's good business judgment enabled him to build one of the great fortunes of early American history—thanks in part to his influence over government policy. For example, in , Astor persuaded Congress to pass a law that barred noncitizens of the United States from engaging in the fur trade, except as employees of American companies. The law was designed to help Astor acquire the trading posts of his main competitor, the Canadian-owned Northwest Company, which were located along the upper northern Mississippi River.
During the winter of —22, Astor persuaded the Congress to close government trading posts set up in to trade with Native Americans in the West, thereby giving Astor even more control over the Western fur trade. Five years later, in , Astor bought the Columbia Fur Company, his main competitor in trading furs in the northwest. Buying his competitor left Astor with just one major competitor, the Rocky Mountain Fur Company, which bought furs trapped south of Astor's territory. Although he controlled the fur trade over a vast territory, Astor did not thrive in competition with Rocky Mountain Fur Company.
Astor's company suffered losses from attacks by Native Americans. Rocky Mountain's fur trappers were regarded as better than Astor's, and their ability to trade furs with Native Americans was also regarded as superior. Astor began to lose interest in his fur business. By June , he had sold the business entirely. It was good timing, since the demand for furs as fashionable clothing was beginning to decline during the same period. Astor had made a significant fortune from the business, however, and went on to make even more money buying property in New York City. There were two related business practices during Astor's early success that have long detracted from Astor's story as one of the first, and most successful, rags-to-riches immigrants to the United States.
These business practices involve alcohol and the drug opium. When Astor entered the fur trade, many Native Americans were living a nomadic wandering existence in the wilderness of North America as they had been for countless generations before the arrival of immigrants from Europe. Their lives were largely focused on hunting or trapping animals, which they used for food and clothing such as leather and fur. Europeans had little of obvious value to trade for these mainstays of Native American life. Although colorful beads are famous as essentially worthless items exchanged with Native Americans for valuable furs, the trading of alcoholic beverages also played an important role.
Native Americans had no experience drinking alcohol, and many proved to be highly susceptible to alcohol abuse. In effect, they would trade weeks or months of effort acquiring furs for a few hours of the sensation of drunkenness. Alcoholism, as addiction to alcohol is called, eventually devastated the lives of many Native Americans in the nineteenth and twentieth centuries. Later, when Astor expanded his enterprise to include trade with China, some part of his success was connected to trading in the addictive narcotic, or pain-relieving, drug opium. In the nineteenth century, China was a largely self-contained society that had something Europeans wanted silk and tea , but the Chinese were generally uninterested in buying the manufactured goods Europeans could sell in exchange.
An exception was opium, the addictive drug closely related to heroin. Opium comes from seeds of a poppy plant grown in India and Turkey and present-day Afghanistan. Britain, by virtue of its control over India in the early nineteenth century, controlled much of the international trade in opium, with China as its biggest market despite strong opposition by the Chinese government. Astor obtained a license to ship merchandise by ship to the ports controlled by the East India Company.
He began by selling furs in China, returning with silk and tea, and also sold opium in China for at least a decade after At the time Astor was engaged in the drug trade, it was not as clear to people as it became in the twenty-first century how devastating addictive drugs based on opium can be on a country. A large and profitable international drug trade with China continued for much of the nineteenth century; when the Chinese government objected, the British government went to war twice to guarantee the right of British merchants to sell the drug in China.
Some part of Astor's fortune thus came from his profits as an international drug dealer. By , Astor had retired from the fur business entirely and focused on buying and developing land in Manhattan. At the time, the island was not as densely packed as it became over the next century. Astor could see that the island of Manhattan was already a major American port, that its land was limited, and that, as a major port, there were great advantages to being located on the island, especially in the decades before bridges or tunnels replaced ferries as the connection between Manhattan and the mainland or with Long Island.
As with the fur trade, Astor's timing was perfect. Astor had entered the New York real estate property business on the eve of a rapid expansion of the city as a major destination for Europeans immigrating to the United States. He preserved and built on his fur fortune by buying land and building apartment houses, putting him in an excellent position to take advantage of the rising demand for living space.
His fortune grew significantly during the last fourteen years of his life, partly as a result of buying back houses he had sold to people at a fraction of their value when families fell on hard times and could not afford to repay their mortgages, or home loans, used to acquire the houses. Astor's name became highly unpopular in the popular imagination, as reflected in newspaper articles after he died that were highly critical of his conduct.
Astor died in , in New York, at age eighty-four. Unlike other self-made millionaires who arrived in the United States with practically nothing, Astor was disinclined to give away his money. Astor's small charitable gift later stood in marked contrast to another poor immigrant-turned-millionaire, Andrew Carnegie —; see entry in volume 1 , who made libraries a particular focus of his effort to give away as much of his fortune as he could after he sold his steel business.
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At the time of Astor's death, the New York Tribune criticized him for focusing his whole life solely on making money. Whatever the opinion of newspapers at the time of his death, Astor's fortune passed intact to only one of his sons, William — , as his other son was mentally impaired. The Astor family became one of New York's leading social stars throughout the nineteenth century and into the twentieth.
He was the wealthiest passenger to drown in the famous shipping disaster. In the twenty—first century, there are few reminders in New York of the man thought to be the richest American at the time of his death. A short block in Manhattan is named Astor Place, and the Waldorf-Astoria Hotel occupies an entire square block of some of the world's most expensive real estate. The subway station that stops at Astor Place, in Greenwich Village , is decorated with molded figures of beavers—a symbol of the basis of the fortune made by a butcher's son from Waldorf, Germany.
Haeger, John Denis. Astor: Business and Finance in the Early Republic. Detroit: Wayne State University Press, Irving, Washington. Edited by Richard D. Lincoln: University of Nebraska Press, Madsen, Axel. New York: John Wiley, Bujalski, Scott James. Hubbard, Elbert.
Online version from Encyclopedia of the Self. American Council of Learned Societies, — Reproduced in Biography Resource Center. Detroit: Gale, Cite this article Pick a style below, and copy the text for your bibliography. Immigration and Migration Reference Library. October 11, Retrieved October 11, from Encyclopedia. Then, copy and paste the text into your bibliography or works cited list. Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.
An American fur trader and businessman, John Astor 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. He was named after his father Jacob Astor, a poor but happy butcher. His mother, Maria Magdalena Vorfelder, learned to be very careful with the little money the family had a quality she passed on to her son.
She died when Astor was three years old. Despite the family's poverty, Astor received a good education from the local schoolmaster. When he reached the age of fourteen he went to work as an assistant to his father. He did this for two years before striking out on his own in Astor joined one of his brothers in London, England , where he learned to speak English and worked to earn money to pay his way to America. In , after the peace treaty ending the American Revolution — 83; when the American colonies fought for independence from Great Britain had been signed, Astor sailed for the United States to join another brother who had gone there earlier.
The ship carrying Astor to America became stuck in ice before completing its voyage and remained there for two months. During this time, Astor met a German man on the ship who told him how much money there was to be made in fur trading. Astor finally landed at Baltimore , Maryland , in March Astor soon joined his brother in New York and began to demonstrate his talent for business. He worked for several furriers and began buying furs on his own.
In and Astor made trips to western New York to buy furs for his employers, purchasing some for himself at the same time. His horizons were always expanding, at least as far as profits were concerned. Soon after the turn of the century, he became interested in the Orient. American ships were just starting their China trade, and Astor, on a visit to London, obtained from a friend a license to trade in any East India Company port. Armed with this mandate, Astor persuaded another friend in New York to join in his venture, and they sent a trade ship to Canton, China.
New vistas were opening up before him, though fur was still his primary interest. Part of his profit from the venture into China went into the purchase of real estate in New York City, property that later proved to be the real basis of the Astor fortune.
Some thought the Louisiana Purchase of was an act of folly for the young republic, but Astor was not one of them. With that immense territory under United States control, it became possible to see the fur trade extending all the way to the Pacific coast. The return of the Lewis and Clark Expedition in added fuel to his ambition, and by the next year he and his agents were fighting to drive the Canadian fur traders out of the upper Mississippi Valley.
In he incorporated as the American Fur Company, a move that consolidated his holdings and prepared for an all-out assault on the Far West. He was not, of course, without competition, and it was actually the antagonism of the fur traders of St. Louis that led him into his most grandiose scheme. By this time, the best fur lands were being found farther to the west.
In the United States traders were in the Rockies already, and in Canada they were working to the north and toward the mountains. The increasing length of the journey from the Great Lakes area to the West cut into the profits of the trade, shortened the time that could be spent among the Indian tribes, and generally narrowed the margin on which the traders operated.
A western entrance to the trading areas had long been desired, but to this point, none had been found. Canadians had already searched; a Scottish Canadian named Alexander MacKenzie had set out for the Pacific from the Athabasca country in , but he did not reach it.
In , he tried again, and this time he almost reached his goal. He wanted to find the Columbia River, and American and Canadian history might have been different had he done so. But he was a couple of hundred miles north of his aim when he crossed the Continental Divide, and instead of the easy Columbia, he found the turbulent and unnavigable Fraser River. The Canadians kept trying; an employee of the Northwest Company, David Thompson, was deep in the Rockies, surveying, exploring, and preparing a final drive to the Columbia River. Montreal was itself almost in the heart of the continent, and to the Canadians it was logical to find a western terminal as an extension of their already existing trade network.
To Astor, it was less sensible to trek all the way across the continent than to sail south around South America and land at the back door. He would do it the easy way. It took more than a year to formulate his plans. This was not to be a one-shot stab in the dark; it was to be a large enterprise, and Astor foresaw the depot he hoped to establish on the Columbia River as the focus of the whole western trade. Even Astor did not have the money for the venture alone, and he approached the Northwest Company with his project, offering the organization a one-third interest in his proposed Pacific Fur Company.
Officially the Northwest Company was uninterested; it was feeling its way to the coast, and was confident that in any struggle it could control the area. However, three former members of the company agreed to join Astor. Internal dissension was a part of the history of the Northwest Company, and there were always Montreal men around who, for one reason or another, had been squeezed out. The articles of incorporation of the Pacific Fur Company were signed in June of , and the venture was ready to be launched.
In the spring of the ship Tonquin arrived on the Pacific coast, and a fort was built at the mouth of the Columbia River. The traders named it after their employer, and thus Astoria was born. Six weeks after the American flag had been hoisted over the little stockade, a party of white men came down the river from the interior—David Thompson and his fellows of the Northwest Company. He had lost time in surveying one river too many, and so the Oregon coast became American instead of Canadian. These ships would carry American manufactured goods for trading with the Indians.