Sunday, June 8, 2014

John Jacob Astor: King of Fur


John Jacob Astor
America is the land of opportunity for migrants hoping for a better life. America began when Europeans started to move to the New World from the 17th-century. After the first thirteen colonies won their independence, many continued and began to realize their dreams in the newly independent United States. One of these individuals was a German immigrant that rose to become the first of the most influential and wealthy men in the country.

John Jacob Astor (July 17, 1763 – March 29, 1848) was a well-known businessman during the late 1700’ and early 1800’s. He was a wealthy fur trader that used some shady dealings to expand his enterprise, earning him a title of Robber Baron. He began as an immigrant looking for a better life in America. At first, he worked for others, but when he was given a chance to establish his own business, he took it. With an eye for opportunities and to grab them quickly, his enterprise grew to become among of the first largest companies in the newly independent United States of America. 

John Jacob Astor was young German boy who was in yearning for a good future. He was born on July 17, 1763 in Waldorf, Germany to Jacob Astor and Maria Magdalena Vorfelder. He did not much have an education because they didn’t have the money. He then spent his time working and assisting his parents for them to have food to eat. 

At the age of 17, he decided to leave his home and find his fortune elsewhere – in America. His journey for a new start started by building a small raft, which he used to sail up the strong and wild Rhine River to reach the coast and a port. Upon reaching the coast, he took jobs to earn enough money to go to England. In 1780, he arrived in England and joined with his brother, George. He then worked for his brother’s musical instrument shop for 3 years until he earned enough to go to America. While staying in England, he studied the English language and became fluent on it. When the American War of Independence ended in 1783, he set forth to the United States.

His voyage, however, met some obstacle. His ship collided with an iceberg en route to the US. The ship seemed to be fine but the arrival time had been delayed. During the trip, he met a trader that introduced him to a lucrative trade of fur. The trade never left Astor’s mind. In 1784, Jacob Astor landed in Baltimore and then made his way to New York City, and started his new life.

In New York, he worked as an agent for a merchant before choosing to make his own trade business. He bought merchandise, mostly fur, for his employer both in America and abroad. It was chance for him to get to know the fur trade and make contacts. It also allowed him travel far and wide. In 1786, he decided to open his own business, first selling musical instruments alongside with furs. After 2 year on the business, he achieved some modest success. One factor of his business success involved the help of his wife, Sarah Todd, whom he married on 1785. His wife had the skills of a fur appraiser. She then helped him to determine the highest quality of fur to buy; allowing his business to succeed.

In 1794, with the US signing the Jay Treaty, trade restrictions between Canada and the United States of America were eased. It allowed Astor to have his first taste of international trade. He entered to a minor partnership with Alexander Henry and the McTavish, Frobisher, & Co.(better known as the Northwest Company). The venture focused on the promising and profitable trade between Montreal, Canada and China. Astor made a lot of money on the venture, earning $250,000, which was a big amount back then. From his profits, he began to invest in real estate. In 1801, he built a lavish and luxurious home at Broadway and Vesey.

In 1808, he started another business, which will be the hallmark of his success. On that year, he secured a charter for his new enterprise, the American Fur Company. His company would be the work of his lifetime. One reason it became a milestone for Astor was that it became a monopoly on the fur trade, which was difficult to achieve.

He demonstrated his opportunist skill after the Louisiana Purchase was concluded. The Purchase allowed Americans to go westward in search for new lands to settle on. Astor also took the Louisiana Purchase as an opportunity to expand his American Fur Company. He started to open trading posts in the west, from the Great Lakes to the Rockies. This allowed him to engage in commerce with Native Indians. It enabled Astor to buy more fur from the Indians.

In 1811, he launched another expansion of his fur company. First, he, along with two Canadian firms, formed the South West Company that cemented American Fur Company’s place in northwestern America. He also established the Pacific Fur Company to cash in on the Pacific fur trade. He established a fort, in the mouth of the Columbia River, called Fort Astoria. The fort served as the headquarters of the Pacific Fur Company. He then placed trading posts around the fort and within the interior of the Columbia River to serve as outposts.
Fort Astoria
The Pacific venture was also a return of Astor’s interest in China. After the furs from the satellite posts arrived at Astoria, it would then be shipped to China. Then from China, the ships would then be loaded with exotic oriental goods that would be shipped back to Europe and then back to the US. During also this venture, Astor shipped opium to China with the help of the British.

The Pacific Fur Company, however, did not last long. The posts and Astoria itself was constantly raided by native Indians. The loss of labor made it difficult to continue the business. On the outbreak of the War of 1812, the British forced Astor to sell Astoria for a price of $58,000.

During the War of 1812, Astor made series of contributions to the United States Government. He donated a lot of his money to fund the government’s war efforts. He also became a government agent that sells government bonds with Stephen Girard.

After the war, American Fur Company emerged as one of the biggest companies in the US; but, it did not come without criticisms. One criticism involved the practice of the company that strangled trappers (those who capture animals with furs and the once who take it). He drowned them in debts then made them to deal exclusively with the American Fur Company. Some also criticized him for influencing the decisions of the US Congress for his benefit.

For instance, he influenced in 1816 the Congress to pass a law that barred foreigners from engaging in fur business in America unless they would only work as employees. This allowed Astor to take trade posts of foreign companies such as the Northwest Company and Southwest Company in America. In 1822, he, again, influenced congress to pass a law that abolished government trading posts and again, Astor took these government trading posts.

In 1819, upon the death of his grandson, Astor relinquished some control on the company but remained a towering figure in decision making in it and continued the expansion of the company.  In 1822, he opened a western branch of his company in St. Louis, which he later on shut down in 1854 due to low profits. In 1827, he decided to absorb the Columbia Fur Company to the American Fur Company.

Besides fur, Astor invested in other interests. Most of his money was spent in real estate. He also became involved in banking. In 1816, he helped on the formation of the second Bank of the United States.

On March 29, 1848, Astor died at the age of 84. He left a wealth of $20 million, becoming the richest man in America during that time.

Jacob Astor remained an intriguing figure. He served as an inspiration to many Americans and immigrants alike. However, he also became an enemy of fair competition. He utilized shady dealing to get his way and earned him to be dubbed as first of the Robber Barons.

Bibliography:

Geisst, C. Encyclopedia of American Business History. New York: Facts On File, 2006. 

Ingham, J. Biographical dictionary of American Business Leaders. Connecticut: Greenwood Press, 1983. 

Gelber, L. and Michael Martin. Dictionary of American History: With the Complete Text of the Constitution of the United States. New Jersey: Rowman and Littlefield, 1978.

"John Jacob Astor Biography" Encyclopedia of World Biography. Accesed on May 27, 2013. http://www.notablebiographies.com.
 

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