American Men of Mind

by Burton Egbert Stevenson

It was the striking irony of fate that the man who had controlled the finances of a nation and by his personal exertions saved it from bankruptcy should himself die in a debtor's prison; yet such was the case. A series of unfortunate land speculations swept away his wealth and ruined his credit; he found himself unable to meet his obligations and was seized by his creditors and thrown into prison, where he remained for some years, and where death found him in 1806.

So Robert Morris was not one of the founders of great fortunes. Turn we to the earliest and perhaps most successful of these, John Jacob Astor, the very type of the astute, large-minded, and far-sighted financier. Born at Waldorf, Germany, in 1763, the son of a poor butcher in whose shop he worked until sixteen years of age, there was nothing in his life or circumstances to indicate the future which lay before him. One of his brothers, however, had come to America and settled at New York, and young John Astor resolved to join him in the land of opportunity. At the age of twenty, he was able to do so, bringing with him some musical instruments to sell on commission, but a chance acquaintance which he made on shipboard changed the whole course of his life.

This acquaintance was that of a furrier, who told young Astor of the great profits to be made by buying furs from the Indians and selling them to the large dealers. Perhaps he exaggerated the profits of the business; at any rate, he fired the ambition of his hearer, and the latter decided to enter the fur business without delay. Upon landing in New York, therefore, he at once secured a position in the shop of a Quaker furrier, and after learning all the details of the business, opened a shop of his own.

Perhaps no one ever worked harder in establishing a business than John Jacob Astor did. Early and late he was at his shop, except when absent on long and arduous purchasing expeditions into the wilderness. More than that, he possessed admirable business judgment, so that, after fifteen years of work, he had succeeded in accumulating a fortune of a quarter of a million dollars. With careful and sagacious management, the business prospered so that Astor was soon able to send his furs to Europe in his own vessels, and bring back European goods. And about this time, he began working on a grandiose and picturesque enterprise.

The English Hudson Bay Company, established many years before, with hundreds of trappers and traders and scores of trading-posts, controlled the rich fur business of Canada and the northwest. We have seen how, years after the events which we are now narrating, the agents of the company tried to save Oregon for England and how Marcus Whitman foiled them. Astor's plan, in outline, was to render American trade independent of the Hudson Bay Company by establishing a chain of trading-posts from the great lakes to the Pacific, to plant a central depot at the mouth of the Columbia river, and to acquire one of the Sandwich Islands and establish a line of vessels between the western coast of America and the ports of Japan, China and India. Surely a man who could conceive a plan like that was something more than a mere trader, and Astor proceeded at once to carry it into effect.

Two expeditions were sent out, one by land and one by sea, to open up intercourse with the Indians of the Pacific coast, and the settlement of Astoria was planted at the mouth of the Columbia river. Whether Astor would have been able to carry out the remainder of his plan is purely problematical, for before he had it fairly under way, the war of 1812 began, and he was forced to abandon the enterprise. The story of this far-reaching project has been told by Washington Irving in his "Astoria." Until his death, he continued to enlarge and increase his business, and left a fortune estimated at twenty millions of dollars.

The Astor plan of investment is one of the safest, most sagacious in the world. Practically all of his profits were invested by John Jacob Astor in real estate outside the compact portion of the city of New York. As the city grew out to his holdings, he would improve them, rent or sell them, and reinvest further out. In this way the growth of the city marked also the growth of his fortune, and this plan of investment has been followed by his descendants to the present day, until they have become by far the most important owners of real estate in New York City. His son, William B. Astor, gave his life to the preservation and growth of the vast property he inherited, and at his death had more than doubled it, dividing an estate of $45,000,000 between his two sons.

Not that the whole thought of these two men was money-getting, for their public gifts were numerous and important. The most noteworthy was the Astor library, founded by John Jacob Astor at the suggestion of Washington Irving, and largely added to by his son, the total amount of the Astor donations to it exceeding a million dollars. But they stand as two types of sagacious and hard-headed business men, to whom money-making and the still more difficult art of money-keeping was an instinctive accomplishment.

The second great American fortune was that founded by Cornelius Vanderbilt, as remarkable and picturesque a character as this country ever produced. Born on Staten Island in 1794, the son of a farmer in moderate circumstances, the boy soon developed a remarkable talent for trade. His father owned a sail-boat, in which he conveyed his produce across the bay to the New York markets, and the boy soon learned to manage this and was intrusted with these daily trips. When he was sixteen years old, he bought a boat of his own, in which he ferried passengers across the bay, and two years later he was owner of two boats and captain of a third. This was the beginning of the great fleet of steamers, sloops and schooners which he built up for the navigation of the shores of New York bay and the Hudson river, which won him the title of "Commodore," which clung to him all his life. Before he was forty years old, he had accumulated a fortune of half a million dollars, and was ready for those great financial operations which marked his later life.

The discovery of gold in California led him to establish a passenger line by way of Lake Nicaragua which netted him ten millions in ten years; he established a fast line of passenger steamships between New York and Havre; and finally was attracted to railway development as a field of enterprise destined to win large returns. In the course of a few years he had secured control of both the Hudson River and New York Central roads, and brought both of them to the highest state of efficiency, and after consolidating them, extended the system to Chicago by the purchase of the Lake Shore, the Canada Southern and Michigan Central. He built a great terminal in New York City, and made the system so profitable that, from it, and a series of fortunate speculations, he accumulated a fortune of $100,000,000, practically all of which he bequeathed to his eldest son, William Henry. One million was also given for the establishment of Vanderbilt University at Nashville, Tennessee.