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Astor, John Jacoblocked

(17 July 1763–29 March 1848)
  • Kenneth H. Williams

John Jacob Astor.

Oil on canvas, c. 1825, by John Wesley Jarvis.

National Portrait Gallery, Smithsonian Institution; gift of Susan Mary Alsop.

Astor, John Jacob (17 July 1763–29 March 1848), fur trader and financier, was born in Waldorf, duchy of Baden, Germany, the son of Jacob Astor, a butcher, and Maria Magdalena Vorfelder, who died when John was about three. His family was of the artisan class, and few records survive from his youth. Due in large part to a fine town schoolmaster, Astor’s education seems to have been better than average. It ended at age thirteen with his confirmation in the Lutheran church. At an age when many contemporaries became apprentices, Astor spent two years as an assistant in his father’s butcher shop but had little interest in learning the business.

When Astor decided to leave Waldorf in 1779, his primary options were to join brothers in either London or America. With the latter area consumed in revolution, he chose London, where his eldest brother, George, made musical instruments. John joined him in that pursuit. Soon after the Treaty of Paris ending the American Revolution was signed in 1783, Astor decided to journey to the United States, both to renew contact with his brother Henry and to scout the market potential for musical instruments. With several of these and some sheet music he boarded the North Carolina in November 1783 and reached the Chesapeake Bay two months later. Less than a day from port, the vessel froze in the bay and did not reach Baltimore until 24 or 25 March. By mid-April Astor arrived in New York City.

Astor saw the instruments as a way to raise capital for the business in which he was more interested—fur trading. He apparently already had the idea before he left London, and it crystalized during conversations with a German-American trader during the Atlantic passage. Achieving some success implementing his plans, he sailed for London in June or July 1784 with furs. There he made arrangements with a fur merchant, and also with a leading piano manufacturer, then returned to New York at the end of the year. He married Sarah Todd, with whom he had eight children, in September 1785 and set up an instrument importing business in a building owned by his mother-in-law. It is probable that his wife ran the music shop, as Astor was soon heavily involved in fur trading.

Among his first business contacts were New York merchants Robert Bowne and William Backhouse. Some accounts state that Astor worked for Bowne, but it is more likely that Bowne and Backhouse simply provided Astor the opportunity to sell his furs through their establishments. He began making buying trips to the vicinity of Albany, a regional fur trade outlet, and in 1787 journeyed to Montreal, the center of fur trading in North America, where he rented a warehouse and began making agreements with traders.

The logistics of exporting furs from Montreal were not simple, as British law prohibited direct trade between Canada and the United States. Furs had to be shipped to London and then New York, or transported overland while risking seizure by the British. Astor employed both methods, with an increasing reliance on overland transport as he built a network of agents along the routes. By the early 1790s Astor had established himself as the leading American fur trader in both the Montreal and London markets, a reputation that led the Montreal-based North West Company to send its furs through Astor’s New York operation when it attempted to circumvent the all-trade-through-London requirement for Canadian firms by shipping directly to China in 1792–1794. With several middlemen like Astor involved in the shipments, the North West Company lost money on the venture, but Astor profited handsomely, especially on the sale of return cargoes such as teas and silk, and became convinced of the potential of the Chinese market.

Astor expanded his operations slowly and cautiously, in a manner similar to methods employed by tycoons later in the nineteenth century. “Tho desirous to make some business,” he wrote an agent, “I am equally so to avoid risks—some I know must be run, but let [them] be as little as possible” (Haeger, p. 148). Astor did not incur the expense of enlisting and equipping his own fur suppliers but instead cultivated relationships with many different suppliers and companies, allowing him to obtain his choice of furs at the best prices. As the Jay Treaty (1794) and the European wars opened more ports to American shipping, Astor traveled to England and Continental Europe in 1795–1796 and established contacts with merchants willing to purchase his furs or sell them on commission. At home his primary customers remained hat and clothing manufacturers.

In 1796–1797 Astor began to cultivate the China market. Employing his usual cautious approach, he first bought space on ships, later expanding to become the primary backer of voyages. About 1803 he purchased the first vessels for his own fleet. In addition to furs, which could be sold at twice the U.S. value, most expeditions carried large quantities of ginseng, which brought six times the U.S. price in Canton. The proceeds were invested in the extremely profitable return cargoes of teas, silk, and nankeen.

From the beginning of his American business enterprises, Astor invested his profits in real estate, buying his first tract in New York City in 1789. From 1800 to 1848 it is estimated that he spent over $2 million in land deals, acquiring both urban and agricultural properties. By the 1820s he was collecting more than $100,000 a year in rent payments. Banks, canals, railroads, and numerous public bond issues also attracted Astor’s money, and he regularly made loans to finance housing and hotel construction, often on his property.

By 1807 Astor was a millionaire and firmly established as the leading U.S. fur trader, but he was not satisfied with the many remaining limitations to his operations. He complained to New York mayor De Witt Clinton in early 1808 that “we are obliged to draw 3/4 of our furs for home consumption from Canada I suppose annually to an amount of $400,000” (Haeger, p. 100). To begin rectifying the imbalance, Astor proposed to exploit the route charted through the Louisiana Purchase to the Pacific by Meriwether Lewis and William Clark, allowing furs to be shipped from the Pacific Northwest. With Clinton’s support he secured a charter from the New York legislature in April 1808 for the American Fur Company, under whose auspices Astor implemented his quest for a shipping base on the Pacific. He also sought backing from the federal government, contacting his friend Albert Gallatin, who was treasury secretary, and President Thomas Jefferson. (Astor also befriended James Monroe, Henry Clay, and John C. Calhoun, among many others, at times providing loans for some of his political allies, including Monroe and Clay.)

After months of planning, two Astor-backed expeditions departed for the mouth of the Columbia River in mid-1810, one overland from Montreal, and another sailing aboard the Tonquin from New York. For two years Astor heard nothing of either party. In the meantime he continued negotiations with the two leading Canadian fur firms, the North West Company and the Michilimackinac Company, in an attempt to avoid conflict and direct competition at a West Coast port. In January 1811 he signed an agreement with them, forming the South West Company and eliciting the word of the Canadian firms that they would not continue procurement in the United States except through Astor’s company. Soon thereafter the Tonquin reached the mouth of the Columbia, where its passengers established the settlement of Astoria in March 1911. The Tonquin sailed inland and never returned, reportedly blowing up during a fight with Native Americans. The starving remnants of the overland expedition staggered into Astoria during the first two months of 1812.

Astor, meanwhile, had been informed by friends in the government that war with the British was imminent, and he was desperately trying to get furs he had already purchased out of Canada. His dealings with Canadians did not cease when the conflict began, though, as he managed to export $250,000 in furs during 1812–1813. During the latter year Gallatin called on Astor to mobilize East Coast capitalists to help raise $10 million in government bonds. Astor invested heavily in these, and when military reverses in 1814 caused a drop in their prices, he became a major proponent for the reestablishment of a national bank in order to help protect his investment.

He also sought military support for another venture—Astoria. In March 1813 Astor received word that the North West Company was sending a ship outfitted with troops to take the outpost. That September an overland expedition from the same company, supported by British soldiers, reached the encampment. After peaceful negotiations, the agent in charge of Astoria turned the settlement and its furs and provisions over to the North West Company for $58,290. Astor, who failed to convince officials in Washington to send a force to protect his investment, lamented that “in peace we should have done well, [but] in war we can do nothing” (Haeger, p. 160). He tried to get government support after the war for forcibly retaking the settlement, but with no success. In the 1830s he hired his friend Washington Irving to write a history of the venture.

The War of 1812 had cut off the China trade, but as the conflict drew to a close in 1815, Astor put his fleet of eight ships back into operation. Soon his vessels were making regular stops in China, Europe, Latin America, and Hawaii and along the American Pacific Coast. Astor continually studied world markets, shifting emphases as prices rose and fell. By 1827 he decided that it would be more cost-effective for him to sell his ships. He also ended regular trade with China during that period.

Soon after the war Astor gave up on the idea of an outlet for furs on the Pacific Coast and concentrated his efforts on the Great Lakes region. Contrary to many reports, the American Fur Company never held a monopoly in any area. Astor did prefer to reach agreements with established companies as American Fur moved into new territories, however, as he felt heated competition was detrimental to all. When Canadian firms were forced to scale back operations in U.S. territory in the late 1810s, Astor purchased many of their posts, including the facilities on Mackinac Island, which became the center of his Great Lakes operations. He cautiously moved into the highly competitive St. Louis–Missouri River region, and through a series of deals with area companies, he was firmly established there by the early 1820s.

In the postwar period Astor also became involved with the second Bank of the United States (BUS), which was created in April 1816. Astor was chosen for the board of directors by James Madison, and he was named president of the New York branch and put in charge of organizing it. Astor and fellow board member Stephen Girard argued that the BUS should follow a fiscally conservative plan, but they were outvoted by a contingent of Baltimore capitalists whose liberal loan and interest rate policies led to rapid inflation and ultimately a depression in 1819.

By that time Astor was no longer heavily involved with the BUS, or in the everyday operations of his company. The drowning death of seven-year-old grandson John Jacob Bentzon in February 1818 sent Astor into deep depression, or “Low Spirits” as he described it, and in 1819 he turned the fur company over to his partners and son William and sailed for Europe with daughter Eliza and mentally ill son John. He lived and traveled on the Continent for the next fifteen years, purchasing a home on the shores of Lake Geneva in 1824. Despite his detachment, Astor received regular reports on his businesses and continued to make the major decisions, returning to the United States periodically to finalize deals.

In 1834 Astor decided to move back to the United States and to sell the company. Furs were no longer as profitable, for a variety of reasons. Machines were allowing manufacturers to make clothes for much less than they could be produced from furs. Western expansion brought greater competition for American Fur in the Rocky Mountains and the Far West and deprived it of the cheap labor of Native-American fur traders, whose tribes ceded their lands and relocated to reservations. Soon after his arrival in New York in April 1834, Astor completed the two-part deal that transferred the northern part of his operation to a syndicate headed by longtime partner Ramsay Crooks (who borrowed the majority of the money for the purchase from Astor), and the western part to St. Louis–based Pratte, Chouteau, and Company, which had been working in that area in cooperation with American Fur since 1826.

Astor already had another major project to occupy his attention, as the hotel that had been conceived in 1831 began to rise in 1834. Astor House (originally Park Hotel), which cost over $400,000, opened in New York in 1836 and quickly became the nation’s most famous hotel. Not all of Astor’s endeavors bore fruit, however, as his financing and name were not enough to make the settlement of Astor a success. Begun in 1835, it was combined with another township three years later to form Green Bay, Wisconsin.

Astor’s death, in New York City, received extensive press coverage, as many believed that he was the richest man in the United States. The exaggerated accounts placed his net worth at $20 million, at least twice the actual amount. At the time many criticized him for not leaving a large bequest to philanthropic causes, although $400,000 went toward the completion of his last major project, the Astor Library, which opened in 1854 (its resources became a substantial part of the consolidated New York Public Library in 1895).

Although he did not transform the way business was conducted, Astor was one of the most proficient practitioners of the craft that his era produced. Through shrewd evalution of the world marketplace, an efficiently organized and run company, and aggressive exploitation of any opportunity with which he was presented, he rose from humble origins to become the most prominent businessman of his age.

Bibliography

There are collections of Astor’s papers at Baker Library, Harvard University; Beinecke Library, Yale University; New York Public Library; Historical Society of Pennsylvania, Philadelphia; New-York Historical Society, New York City; and Missouri Historical Society, St. Louis. American Fur Company papers are also collected at several repositories, with the most substantial set at Clarke Historical Library, Central Michigan University, Mount Pleasant. Kenneth W. Porter, John Jacob Astor: Business Man (2 vols., 1931), is a detailed biography and prints nearly 400 pages of documents, including Astor’s will. John D. Haeger, Business and Finance in the Early Republic (1991), places Astor in the context of his times and includes a bibliography and a discussion of earlier works on him. Also of note is Washington Irving, Astoria; or, Anecdotes of an Enterprise Beyond the Rocky Mountains (1836), which Astor commissioned.