Astor, John Jacob

ASTOR, JOHN JACOB

The life of John Jacob Astor (1763–1848), a fur trader who became one of the wealthiest individuals in U.S. history, is a classic example of a rags-to-riches story. Born to a poor butcher in Waldorf, Germany, in 1762, he died 85 years later in New York with a fortune estimated in 1998 dollars at $78 billion.

At age seventeen, Astor left Germany for England, where he learned English and worked for his brother, a musical instruments craftsman. After three years, John Astor had saved enough money to immigrate to the United States. In March 1784, after a long trans-Atlantic crossing, he arrived in New York with seven flutes and $25. During the voyage, young Astor befriended a fellow German emigrant who had previously worked as a fur trader in the United States. The information that he gleaned from his new friend convinced him to make his career in the fur trade.

Starting out in the fur business as a clerk, Astor quickly moved on to work for himself. In 1786 he married Sarah Todd and, with the help of her $300 dowry, opened a store on Water Street in New York where he sold musical instruments and bought furs. Both Astors were very involved in the new business and lived very frugally. Astor often left the shop in his wife's care when he traveled to what was then the U.S. frontier in search of furs. In 1789 Astor purchased his first Manhattan property: two lots on the Bowery Lane for $625.

By 1800 Astor was worth $250,000, and he was the leading fur dealer in the United States. Following a trip to London, England, in 1799, where he obtained a license to ship to any East India Company port, Astor became involved in trade with the Orient. He began expanding the scope of his business by shipping furs to China and importing Chinese silks and teas. A part of his profits from these ventures immediately went into real estate purchases in New York.

The success of the Lewis and Clark expedition in 1806 opened up the great fur lands of the U.S. Northwest. Astor was determined to establish an outpost on the Pacific Ocean. In the spring of 1811, the ship Tonquin arrived at the mouth of the Columbia River. A fort was built and the settlement was named Astoria. For once however, Astor's timing was poor; during the War of 1812 (1812–1814), his agent was forced by the British to sell the outpost to Canada's Northwest Company for $58,000.

Astor emerged from the war wealthier than ever. With a consortium of other businessmen, he bought $2 million in bonds from the hard-pressed U.S. government, paying only 88 cents on the dollar. By the 1820s Astor's Manhattan properties had also become prime real estate; one of his holdings would include the famous intersection of 42nd Street and Broadway. When he saw the fur trade begin to decline, he sold out his commercial interests and turned his strong intellect and acquisitive instincts toward his real estate investments, buying up land in sparsely inhabited northern sections of Manhattan.

Astor did not sell off his land when prices soared; instead, he developed his properties by building commercial buildings and apartments on them. In the hands of his descendants, it was the Astor real estate in Manhattan that was critical to the spectacular growth of the family fortune, which reached $200 million before 1900.

Astor, grieving over the death of his wife, spent his last 14 years administering to his estate and managing his properties. When he died in 1848 he was the richest man in the United States, leaving an estate of some $20 million. His only public bequest was a comparatively insignificant $400,000 to found a public library, the Astor Library, which was later consolidated with other libraries as the New York Public Library in 1895. He left the remainder of his wealth to secure his family's immense fortune for the next century.

FURTHER READING

"The American heritage 40: a ranking of the forty wealthiest Americans of all time." American Heritage, October 1998.

Baida, Peter. "Poor Jacob." Forbes, October 26, 1987.

Cordtz, Dan. "Land Lords." Financial World, November 12, 1991.

Haeger, John D. John Jacob Astor: Business and Finance in the Early Republic. Detroit: Wayne State University Press, 1991.

Stokesbury, James L. "John Jacob Astor: A Self-Invented Money-Making Machine." American History, December 1997.