John Jacob Astor
John Jacob Astor was born in Waldorf, near Heidelberg, Germany, on July 17, 1763. He was named after his father Jacob Astor, a butcher. His mother, Maria Magdalena Vorfelder, learned to be very frugal with the family’s income, a quality she passed on to her son.
In 1783, after a peace treaty ended the American Revolution, Astor sailed for the United States to join a brother.
The ship carrying Astor to America became stuck in ice and remained there for two months before completing its voyage. While onboard, Astor met a German man who regaled him with stories about how much money there was to be made in fur trading.
ENTERING THE FUR TRADE
Joining his brother in New York, Astor began to demonstrate his talent for business. He worked for several furriers, and began buying furs on his own. In 1784 and 1785 Astor made several trips to western New York to buy furs for his employers, purchasing some for himself at the same time. When he had acquired enough furs to make a trip to England profitable, he set sail. In London he established connections with a 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 to use for trade with the Native Americans. At 21 he had already proved himself a shrewd and intelligent businessman.
Convinced that a fortune could be made in the fur trade, Astor spent more time managing and expanding his business. Between 1790 and 1808 his agents collected furs from as far west as Mackinaw, Michigan. He took advantage of the Jay Treaty of 1794 — which led to the British leaving forts and trading posts in the Old Northwest Territory, which included all the then-owned land of the United States west of Pennsylvania and northwest of the Ohio River — by expanding his operations in the Great Lakes region.
Through an arrangement with the British Northwest Company, he purchased furs directly from Montreal, Canada. By 1809 he was recognized as one of the leading fur traders in the United States.
FROM FURS TO GENERAL MERCHANDISE
During the 1790s Astor had begun to import and sell a large variety of European goods. Between 1800 and 1812 his trade with China expanded and became a large part of his business dealings in Europe. The War of 1812 temporarily disrupted his plans, but it also gave him an opportunity to purchase ships at a bargain price, since declining trade had made other merchants anxious to dispose of their fleets.
After the war Astor had a large 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 the venture. Between 1815 and 1820 he enjoyed a commanding position in trade with China. 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 money to buy quality merchandise at a low cost and a fleet of ships that could transport the goods to markets more quickly than his rivals.
FROM TRADE TO INVESTMENTS
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, money-lending, insurance companies, banking, railroads and canals, public securities, and the hotel business.
The most lucrative of his investments 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.
At the time of his death in 1848, Astor was the wealthiest person in the United States, leaving an estate of at least $20 million (estimated at $110.1 billion in 2006 dollars). He has been estimated to be the fourth richest American of all time, based on the ratio of his fortune to contemporary GDP.
In his will Astor left $400,000 to build the Astor Library in New York (later consolidated with other libraries to form New York Public Library), as well as $50,000 for a poorhouse and orphanage in his German hometown. The Astorhaus is now a museum honoring the city’s ancestor, Johann Jakob Astor, and a popular venue for marriages. Astor also donated $25,000 to the German Society of the City of New York, whose chairman he was from 1837 until 1841.
Astor left the bulk of his fortune to his second son, William Backhouse Astor, Sr. His eldest son, John Jacob II, had a mental disability and Astor left enough money to care for him for the rest of his life.
Phil Robertson, Editor
