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
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 on John Jacob Astor
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).