U.S. Timeline - The 1800s
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1808 - DetailApril 6, 1808 - The American Fur Company is incorporated by John Jacob Astor.
Wealth and its distribution was coming to men in the United States beyond those from Great Britain and France. It would come in the trading of furs, which were in short supply and great demand in China and Europe. The established companies of Great Britain, the Hudson Bay Company and North West Company, were about to get a competitor in a company founded by a German immigrant, John Jacob Astor, and that company, the American Fur Company, would be one of the first American firms to challenge British business interests. And that company would eventually make John Jacob Astor the eighteenth richest man of all-time. After his push into Manhattan real estate, he would become the world's richest in his time.
By the date of the American Fur Company's incorporation in New York City, the Hudson Bay Company, a de factor government agency, had been in existence for over one hundred years. Founded as an English Royal Charter from King Charles II in 1670, it had, by 1808, become the world's largest landowner, with approximately fifteen percent of all North American land. It controlled the fur trade for centuries in the English controlled territories in the United States and Canada. Its traders explored the continent, setting up trading posts throughout from its headquarters on Hudson Bay. By 1784, the North West Company, began to make headway into the trade of the Hudson Bay Company.
John Jacob Astor saw an opportunity after the end of the American Revolution to put an American spin on the fur trade and compete with its two main rivals. He intended to establish a main trading post at the mouth of the Columbia River, coalesce relationships with Russian and Chinese companies, and set up subsidiaries around the United States to handle the fur trade in those territories. These included the South West Company (Midwest) and the Pacific Company (Oregon).
Effect of the War of 1812During the War of 1812, many of the trading posts of the American Fur Company were lost to the British, either through conquest or sale. However, despite the destruction to their trade during the years of war, the aftermath became even more profitable than prior. The United States passed legislation in 1817 prohibiting foreign traders from trading on U.S. territory, thus preventing Hudson Bay and North West from competing directly with Astor's American Fur. He established a virtual monopoly in the Midwest, Great Lakes, Plains, and Rocky Mountain markets by 1830, buying out his smaller competitors, engaging in determined business practices.
Decline of the Fur TradeAstor saw the writing on the wall in 1834 with fashion moving from fur to silk and withdrew from the company. Its subsidiaries became independent firms, the Hudson Bay Company began undercutting its rivals, and the fur trade in America ceased to be as profitable in the coming decades.
John Jacob AstorAstor was born July 17, 1763 in Walldorf, Palitinate, in the Rheine region of Germany. He moved to the United States after the American Revolution in the early 1780s, and began a small fur trade shop in New York City. By the time of the establishment of the American Fur Company in 1808, capitalized with $1 million and with Astor as its only shareholder, he had earned over one quarter of a million dollars in the fur trade and befriended politicians such as Thomas Jefferson.
Astor began to diversify into New York City real estate prior to the company's incorpartion in 1799 and 1803, with land along the waterfront, seventy acres between 42nd and 46th Streets, and property from Aaron Burr. He was not a developer, but would lease the land to others.
A patron of the arts and culture, Astor supported John James Audubon and funded the Astor Library, which became part of the New York Public Library system.
Photo above: Buildings of the American Fur Company at Fond du Lac, 1827. Image source: Library of Congress. Photo below: John Jacob Astor by artist John Wesley Jarvis, circa 1825. Courtesy National Portrait Gallery, Washington, Wikipedia Commons. Info source: Biography.com; Wikipedia Commons.