John Jacob Astor was man with a big dream of building a trading empire from the Atlantic to the Pacific Coast and China based on the fur trade. When that failed, he turned to Manhattan real estate and became America’s first millionaire and the 18th-wealthiest man in the world.
He was an American rags-to-riches story.
The fur trade was dominated in British North America starting in 1684 by the giant London-based Hudson’s Bay Company (HBC) established in 1670 and given a monopoly under royal charter.
HBC’s initial raison d’ętre was to satisfy the European craze for felt top hats made from beaver fur. In Canada, their headquarters was York Factory on the southwest shore of Hudson’s Bay, with a network of trading posts stretching from there all the way to the Pacific.
The company had been trading for a long time with the Indians (called First Nations in Canada) and with mostly mixed-blood Métis (Indian and Euro-American) trappers.
In 1787, Astor joined the fur business and quickly became one of the best traders — without ever setting a trap.
Johann Jakob Astor was born in 1763 in a village near Heidelberg, Germany, third son of a ne’er-do-well butcher. At 16, he moved to London to join his brother George in working for an uncle making pianos and flutes. There he Anglicized his name and learned English.
At about age 20, he was among the first German immigrants arriving in the U.S. after the American Revolution. He went to work in his other brother Henry’s butcher shop in New York, and then started buying pelts from Native Americans in upstate New York. He prepared them himself and sold them to buyers in London and elsewhere from a shop he opened on Water Street in New York. He also became his uncle’s agent in America, selling musical instrument business.
Following the Louisiana Purchase in 1803, Lewis and Clark opened up more beaver country for American trappers with the Corps of Discover Expedition from 1804 to ’06.
Astor followed right on their heels — seeing new opportunities to trade directly with the Indians by opening the American Fur Company and subsidiaries that included the Pacific Fur Company.
In 1810, he sent two expeditions representing his Pacific Fur Company, one by sea and the other one by land, to establish a fur trading post at the mouth of the Columbia River, naming it Fort Astoria — the first American settlement on the Pacific Coast.
He envisioned the outpost as a jumping off point for trade with Asia, and also with the Russians who in 1741 were the first Europeans to discover Alaska, building their first settlement on Kodiak Island and later the mainland to trap for furs.
Astor cut a deal with the Russians to sell and deliver supplies by ship to their settlements in Alaska and California.
Then everything changed when the War of 1812 between the U.S. and Britain broke out.
Fearing that the British were coming, the men at Fort Astoria panicked, knowing they had no military protection, so they sold the business and its holdings to Montreal-based North West Company fur traders.
Months later, the armed British war sloop HMS Raccoon did come — carrying orders to take over the post. They were surprised to learn it was already in British hands — remaining so until 1848 when all of Oregon and Washington became part of the United States.
As the U.S.-Canada boundary line was being negotiated after the war ended, Congress passed a bill in 1816 barring non-U.S. citizens from owning fur businesses in U.S. territory. That forced North West to sell all its holdings below the Great Lakes to Astor.
Six years later, Congress helped again, voting to close all trading posts operated by foreign governments — handing Astor almost a monopoly of the fur trade.
Before the Revolution, the British controlled American shipping, but after Independence, U.S. ships could trade wherever they pleased, and Astor had his eye on China — then the world’s biggest market for furs.
He was interested in tea, silk, chinaware and other goods from China that he knew he could sell in the U.S. and Europe.
He then founded his own shipping company to transport the goods.
The Chinese weren’t much interested in Western goods, which would leave the ships empty going to China. But Astor had a plan for that: He would send one or two ships a year from New York, loaded with goods to exchange for furs from the Indians in the West to be taken to China, stopping in Hawaii to pick up sandalwood — much prized by the Chinese.
Oriental goods would be taken to Europe and sold — the proceeds paying for European goods destined for New York — completing the profitable circuit.
It was a great plan but was doomed by multiple problems — including trouble with the Indians, his ship Tonquin blowing up off the coast of Vancouver Island with all aboard killed, and the outbreak of war in 1812.
But Astor did make money in his China venture — much of it from opium.
In 1816, he bought 10 tons of opium from the Turks and shipped it to Canton, China on one of his American Fur Company ships — brazenly flaunting Chinese law. President Franklin Delano Roosevelt’s grandfather, Warren Delano, Jr. was doing the same thing, calling the opium trade “fair, honorable and legitimate.”
Astor even sold opium in New York, openly advertising it in the newspapers.
In 1804, the same year that Lewis and Clark headed west, U.S. Vice President Aaron Burr shot and killed Alexander Hamilton in an illegal duel but was never punished for it. That was followed by being arrested, tried and acquitted for treason for being part of a plot to annex territory in Louisiana and Mexico and set up an independent republic.
By 1807, Burr was ruined and broke, and turned to his friend John Jacob Astor for help. He transferred the long-term lease of his ritzy, heavily mortgaged Manhattan estate called Richmond Hill to Astor for only $32,000, hoping to get the property back later. He never did. Astor chopped it up into 250 parcels, leased them and made a fortune.
His tenants could do whatever they wanted with the lots for 21 years, after which they had to renew the lease or Astor would reclaim them.
Astor rolled the proceeds into more vacant land in the path of development.
One report said, “His courage to invest in unsettled farmland, his business instincts, and his foresight when it came to the future development, growth, and expansion of New York enabled him to become the richest man in America.”
By 1820, his American Fur Co. monopolized the fur trade east of the Rockies, but by the 1830s, the fur business was fading, with silk replacing beaver fur for top hats. Seasoned mountain-men bought out fur trading companies in a losing effort to keep the trade going.
Beaver trapping all but ended in the 1840s — as did hunting buffalo that became nearly extinct by the early 1880s.
Astor turned his attention to getting richer in New York real estate.
When he was 40 years old, he bought 70 acres of central Manhattan from 42nd to 46th Streets between Broadway and the Hudson River.
They called the Astor Family the “Landlords of Manhattan.”
Today, the Astor name is scattered across America from the Waldorf-Astoria Hotel in Manhattan to historic Astoria on the Oregon Coast, but it’s no longer on any list of the super-rich. The family trust was dissolved in 1919 after the last of Astor’s grandchildren died — the money shared among family members, except with John Jacob Astor IV.
He was the wealthiest man on board the Titanic in 1912 when it hit an iceberg in the Atlantic and went down — his crushed body found a week later by the cable ship Mackay-Bennett.
John Jacob Astor died in New York at age 84 on March 29, 1848 — the same day Niagara Falls froze over and stopped flowing. His estate was estimated to be more than $20 million — $638 million in today’s money.
John Jacob Astor and his wife, Sarah, had seven surviving children.
The German-born immigrant who once sold flutes and pianos for his uncle came to America and made his Great American Dream come true.
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Contact Syd Albright at email@example.com.
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“Climbing several rungs on the income ladder takes ingenuity, grit, resilience, opportunity, and a heaping tablespoon of luck. Currently, poor children have only a 7.5 percent chance of making it even to the top 20th percentile as adults. Making money is hard; holding onto money when you’re born with it shouldn’t be.”
— The Atlantic (Sept. 18, 2015)
John Jacob Astor quotes…
“Wealth is a result of habit…Good habits in America make any man rich.”
— John Jacob Astor
Opium to China…
“Opium was technically banned in China, but merchants like Astor found a way around the ban. Large ships containing gigantic hauls of opium met small vessels outside of legitimate ports and swiftly unloaded their illicit cargo. Bribery was common and officials who had taken bribes looked the other way instead of enforcing anti-opium laws.”
— Erin Blakemore, History.com
John Jacob Astor’s overland expedition to Oregon made a big mark in American history by discovering South Pass — two mountain passes on the Continental Divide in the Rocky Mountains in southwestern Wyoming. South Pass became the route taken by thousands of settlers traveling over the Oregon, California and Mormon trails for a new life in the Frontier West.
Fort Astoria was established in 1811 as headquarters for the Pacific Fur Company at today’s Astoria, Ore. The fort was sold to the North West Company at the start of the War of 1812, later becoming a Hudson’s Bay Company (HBC) fort in 1821. It was closed in 1825 when HBC moved to Fort Vancouver, then reactivated five years later and stayed in operation until 1848. The rebuilt fort is now a National Historic Landmark.
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