John Jacob Astor: America’s First Multimillionaire

Published by EH.NET (August 2001)

Axel Madsen, John Jacob Astor: America’s First Multimillionaire. New

York: John Wiley & Sons, 2001. vii + 312 pp. $30 (cloth), ISBN: 0-471-38503-4.

Reviewed for EH.NET by Ann Harper Fender, Department of Economics, Gettysburg

College.

Axel Madsen joins a long list of John Jacob Astor biographers. His

bibliography contains more than a dozen histories of the self-made

millionaire, his business activities, or his family. Astor family friend

Washington Irving penned the first with the elderly tycoon’s blessing and

assistance: a chronicle of Astoria, the failed venture on the Pacific coast

that was published in 1836 as Astoria: Adventure in the Pacific

Northwest. Madsen relies heavily on these secondary sources, citing

especially the journalist James Parton’s 1865 Life of John Jacob Astor

as a major source.

Born Johann Jacob Astor in 1763, the young Astor left his home and his work in

his father’s butcher shop in Baden-Baden (Germany) shortly before his

seventeenth birthday. He traveled to London where he worked with an older

brother making and selling musical instruments, learned English, and

Anglicized his name. Despite modest success in London, carrying a few musical

instruments for sale he moved to New York. Eschewing employment in another

brother’s butcher shop, John Jacob worked briefly for a baker and then for a

Quaker fur trader. This connection apparently introduced him to the

potentially lucrative fur trade and he soon was exploring western New York

State for furs and fur connections as well as getting to know fur traders out

of Montreal. These furs he shipped to London, returning with more musical

instruments, in a scenario that seems a textbook example of Ricardian trade

according to comparative advantage, as indeed do most of Astor’s money making

endeavors. During these early years in New York, Astor married Sarah Todd, who

brought to the union distant family connections, a small dowry, good business

sense and both willingness and ability to help with business. From these

inauspicious beginnings the Astors expanded into international trade more

generally, especially the China trade by shipping furs from the west coast via

Hawaii, and into land purchases by buying much of Manhattan before it became

crowded. Madsen nicely narrates these details of Astor’s life and sets them

within the context of contemporary national and international events. He

describes the growth of the American Fur Company, the various other fur

companies that Astor started or took over, and then the movement out of fur

and into other endeavors. The business and personal histories are nicely

juxtaposed with the Napoleonic Wars, debate over the national bank, financing

of the War of 1812, the Louisiana Purchase, debate and diplomacy over the

U.S.-Canada border, the Lewis and Clark expedition, the fur traders’ westward

movement, the China opium trade, and the growth of New York City and its real

estate values.

What isn’t clear, though, is why Astor succeeded so fabulously when others did

not. Given that Astor committed very little to paper and what he did write in

English was not revealing nor even particularly literate, Madsen likely gets

as close to the person as possible. Nonetheless the reader is left wondering

whether Astor was especially smart, especially prescient, especially lucky, or

had the right connections to have been so successful. Astor’s wife encouraged

him to make contacts via frequenting New York’s coffee houses and early John

Jacob made friends with such influential people as Albert Gallatin. In a

bustling city within a new country, however, contacts among businessmen,

statesmen, and intellectuals apparently were not unusual. Madsen refers to

Astor’s monopoly of the fur trade, yet when Astor entered the business the

Hudson’s Bay Company and the North West Company competed vigorously to

dominate that trade. How did Astor grow large if the business is so inherently

monopolistic? Indeed, if it was so monopolistic, why did Astor so frequently

have to deal with competitors? Despite many references to the fantastic

profits that Astor made, the greatest number of pages dealing with business in

the book describe Astoria, a very expensive failure for Astor.

What motivated Astor might be forever unknown; the economic historian can

still wish for more details about his business transactions, gleaned from

whatever business records remain. Madsen mentions that most of Astor’s

business papers were destroyed after his death, hinting that this might have

been deliberate. He also refers to the business archives of the American Fur

Company, however, as well as to business documents in various public

libraries. Whether these can be mined for more insights into Astor’s success

is not clear.

How Astor’s descendants spent the fortune that John Jacob earned occupies the

last portion of the book. The reader sometimes suspects that the author is

more comfortable with the late nineteenth and twentieth centuries than with

the eighteenth and early nineteenth. Madsen has written numerous biographies,

focusing from such twentieth century business figures as Coco Chanel and

William Durant to Hollywood stars such as Barbara Stanwyck, John Huston, and

Billy Wilder. In the Astor biography, the text several times gives a date

such as 1911 when 1811 clearly is intended, perhaps an unintentional looking

ahead to the society page antics of future Astors. An economic historian

wonders what comparisons Madsen could make between Astor and the other

business tycoons about whom he has written. Or between young companies

operating, albeit loosely, under the laws of the U.S. and those operating

under British royal charters.

This biography is not written as a scholarly treatise; the intended audience

is not the economic historian researcher. As a popular summary of John Jacob

Astor’s life, the book succeeds. As an in-depth economic study of early

entrepreneurship, it leaves too much unanswered and unexplored even as its

summary raises questions that scholars might pursue.

Ann Fender’s research interests lie in eighteenth and nineteenth century fur

trade operations, organization of early trading firms, and nineteenth century

U.S. industry. Her most recent publication, “Alcohol in the Trade: Isle a la

Crosse, 1805-1823,” appears in the papers from the Rupert’s Land Colloquium,

May 2000.