john jacob astor -- 8/14/23
Today's selection -- from The Landlords by Eugene Rachlis & John E. Marqusee. John Jacob Astor became perhaps the wealthiest man in early America, first through fur trading as far away as China, and then through Manhattan real estate:
“The pelts (of John Jacob Astor’s fur trading business) were shipped directly to New York or to Europe. Profits soared, and made possible even larger volume and larger profits. Trade goods in the quantities in which he now needed them were bought in London at reduced prices, so that Astor could afford to make better deals with the Native Americans than his competitors. As his supply of cash increased, Astor enlarged his stock; his shop now carried a line of guns, ammunition, English woolens, Chinese tea and fine silks. By 1800 he was worth some $250,000, had moved to a larger shop, and had bought a home on Broadway, the city's most fashionable residential street.
“He was now thirty-seven and in the front rank among New York merchants. A less ambitious man might have stopped there, perhaps to consolidate his gains so as to provide for a secure future. Instead, as if the start of the new century were a personal signal to him, John Jacob Astor stepped up his tempo, not only in the fur trade, but soon in the two other activities which were to multiply his fortune by a hundred--trade with China and real estate.
“Astor's imagination may have soared beyond the ken of his contemporaries, but his real estate purchases were also made possible by a steady source of cash that few of them could match. Most of it came from the China trade. In the early nineteenth century China represented an enormous, and comparatively untapped, market for furs, and no one in the United States was better equipped to fill that demand than Astor. The Chinese also paid well for ginseng, a medicinal herb which grew in Upstate New York, where Astor's fur agents could obtain it easily. The Chinese admired sandalwood, which was available in Hawaii, and in time Astor's ships controlled nearly the entire supply. Furs, ginseng, sandalwood, cotton cloth, dyestuffs and wine were carried to Canton, first on ships in which Astor was part owner, later on those he owned outright. On the return voyage they brought the teas, silks, spices and chinaware which American and European merchants eagerly bought. As always, part of the profits went for trade goods in London. These were delivered to Astor's fur buyers, and the process started again. It was easy to believe that Astor had become, as James Gordon Bennett said in the New York Herald, ‘a self-invented money-making machine.’
“Bennett's phrase was more colorful than accurate. In those days, at least, machines were not capable of starting themselves. One of Astor's most glorious triumphs was, aside from its profits, proof that, however efficient his machine, it was run by a man with ingenuity. He showed both qualities in 1808, when the embargo on foreign trade which Thomas Jefferson had imposed was becoming unbearable to East Coast merchants. There was nothing they could do about it, though, except petition their congressmen or the President himself. To Astor the situation represented a challenge he could not resist.
|John Jacob Astor portrait by John Wesley Jarvis, 1825|
“Astor started with Samuel Latham Mitchill, a Democratic senator from New York, a professor of natural history at the College of Physicians and Surgeons, and a friend of Jefferson's. According to a perceptive contemporary, Mitchill was ‘distinguished for scientific and literary requirements’ but ‘strangely deficient in that useful commodity called common sense.’ On July 12, 1808, he wrote a letter to the President introducing its bearer, ‘Punqua Wingchong, a Chinese merchant,’ who had completed his business after nine months in New York and, despite the embargo, was ‘desirous of returning to Canton, where the affairs of his family and particularly the funeral obsequies of his grandfather, require his solemn attention.’ He was now in Washington, said Mitchill, ‘to solicit the means of departure, in some way or other, to China; but he feels at the same time a strong desire to see the Chief Executive officer of the United States.’
“Punqua Wingchong and the President did not meet; as Astor knew, Jefferson had left Washington for Monticello not long before Mitchill wrote to him. Wingchong did the next best thing; he enclosed Mitchill's letter with one of his own to the President. Jefferson's reaction was prompted by national interest and personal sympathy; he immediately wrote Albert Gallatin, his Secretary of the Treasury, recommending that Wingchong's request for a ship be granted. It was a case of national comity, Jefferson said, in addition to which the favor ‘may be the means of making our nation known advantageously at the source of power to which it is otherwise difficult to convey information.’ The chance to establish American good will in China outweighed the effect of a single exception to the embargo; and, he added, it was obviously so singular a case that ‘it can lead to no embarrassment as a precedent.’ Jefferson made sure Gallatin would comply by enclosing a blank passport and instructions to ‘direct all the necessary details.’
“On August 3, Gallatin sent Jefferson's passport to the collector of the Port of New York, described the special situation, and outlined certain conditions which had to be met by the ship which carried Wingchong, who by now was being referred to as a mandarin. Considering that an embargo was in effect, Gallatin was remarkably generous. Wingchong and his attendants could take, in addition to baggage and personal effects, their property ‘of about forty five thousand dollars . . . either in specie, or in furs, cochineal [a dye], ginseng, or any other ... merchandise at his choice.’ Wingchong, Gallatin said, had already made arrangements for his voyage home ‘with the owner of the ship Beaver of 427 tons.’ Soon after he wrote to New York, Gallatin informed Jefferson that he had ‘transacted the Chinese Mandarin business to his satisfaction & he will sail in a few days.’ Almost at once, though, Gallatin had his suspicions. He knew that the Beaver belonged to Astor.
“After forty-eight troubled hours, Gallatin wrote the President again, this time to say that if he had had any choice in the matter he would have hesitated. ‘I apprehend,’ he said, ‘that there is some speculation at bottom.’ Jefferson disagreed; the potential diplomatic results were great, and even ‘likely to bring lasting advantage to our merchants.’ The only merchant who was to derive a lasting advantage from the President's gullibility was at that moment preparing the Beaver for sea. As Astor urged his crew to speed, word spread from the docks of New York to Philadelphia and Boston. The voyage could not have been kept a secret under any conditions. Except for coastal vessels, Astor's was the only activity on the waterfront.
“Astor's competitors reacted as expected. A group of Philadelphia merchants wrote Gallatin angrily denouncing Wingchong as ‘an imposter, and an insignificant instrument in the hands of others.’ Some of them had been to China and recognized him as a ‘petty shopkeeper’ from Canton. The opposition Federalist press used the story to club the administration. Wingchong was variously identified as ‘a common Chinese dock loafer,’ ‘a Chinaman picked up in the park,’ and by some as not even Chinese at all, but a Lascar sailor or ‘an Indian dressed up in silk and adorned with a peacock fan,’ his props having been supplied by John Jacob Astor. By the time Gallatin feebly answered the Philadelphia merchants and even Jefferson felt that the Beaver ‘should be detained,’ Astor's ship was outward bound.
"She returned to New York on June 1, 1809, with a full cargo of teas, silks, spices and chinaware. Since she was the first ship from China in more than a year, her goods were worth a good deal more than in ordinary times, and Astor cleared some $200,000 on the single voyage.
“Although he was not to manage as satisfying a coup again, Astor continued to do well in the China trade until he got out of it in 1825. From it, and from the American Fur Company, he drew the money with which he made his first large real estate investments. He had proposed the fur company in 1808 as a government-sanctioned operation to promote the national interest and benefit all American citizens. In fact, reported an early biographer, tongue in cheek, his plan was ‘to concentrate the western fur trade in the hands of only such American citizens as had been born in Waldorf, Germany, in 1763, and had arrived in the United States from London in the spring of 1784.’ Except for the intrusion of the War of 1812, during which he lost the lucrative western fur posts he called Astoria, Astor's plan was nearly fulfilled. His own sound knowledge of the business and the ruthlessness of his traders--stirring up the Indians to attack the mountain men who preferred to deal with the Rocky Mountain Fur Company, illegally manufacturing and selling liquor to the Indians--gave him an eminence just short of monopoly in America and supremacy in the London and Canton markets.
“All told, Astor spent nearly fifty profitable years in the fur trade, but it is an ironic commentary that when he sought to be memorialized in print he subsidized Washington Irving, then America's outstanding author, to write the story of Astoria, the major failure. No such setback marred his years in the China trade or in real estate. His earnings from the land made it possible for him to buy even more land, which in turn created more earnings with which to do it all again.”