The Astor Dynasty

Published 4:00 pm Thursday, December 1, 2011

Creating a dynasty requires lots of money and children. John Jacob Astor had both.

Astor and his wife, Sarah, brought into this world a family of four sons and four daughters. This large brood and their mountain of money appeared to set the stage for a major dynasty. Yet there were problems from the start.

Astor’s eldest son and heir-apparent, John Jacob Astor Jr., was born with a “feeble mind.” He was mentally handicapped and required around-the-clock care, which made him unsuitable as a family leader.

Astor’s second-eldest son, William Backhouse, had problems of his own. He was born with absolutely no interest in finance or business. Bashful and a loner, William found comfort in the study of literature. Soon after finishing primary school, he moved to Europe to pursue his studies in the great universities.

Fluent in numerous languages, including Latin and Greek, William found comfort among the poets and historians of ancient Greece and Rome. He adored Homer, Virgil, Plutarch and Tacitus.

He was grooming himself for a peaceful life, perhaps as a classics professor in some university.

But in 1817, at age 26, William Backhouse’s academic pursuits came to an abrupt end. He was told to return home to New York. His father’s empire had grown to such a size that he needed help managing the numerous enterprises.

His father, John Jacob Astor, had begun in the fur business, then quickly expanded into general merchandise. After he had developed extensive experience, he moved into the China trade, where he soon became the dominant importer of Chinese luxury goods.

His clever and shrewd dealings in these areas of business made him wealthy, although his most profitable venture proved to be his investments in real estate.

In 1784, the town of New York had a population of 23,000; 16 years later, nearly 50,000 people lived there. Astor witnessed this phenomenal growth and gambled that the city would continue to grow.

Beginning in 1800, he invested his spare money in neglected orchards, farmland and swamps along the Hudson River. During the next 16 years, he invested more than $700,000 in real estate – and ended up owning 3 percent of New York City.

The Erie Canal in 1825 opened up the Great Lakes region, which brought swarms of immigrants to America. They needed some place to stay; New York City was the logical choice.

The entire city had been surveyed and divided into lots measuring 25 feet by 100 feet. It was a tiny space, but enough room for a family to build a narrow shanty residence, keep a few chickens and tie up a horse.

However, rather than build small houses, the masters of New York constructed brick rectangles that precisely filled each city lot from corner to corner, rising up five to seven stories in height. They were called “tenements.”

A narrow doorway divided the first floor into four tiny apartments. A steep staircase precisely in the middle of the structure led to the upper floors, which had identical layouts. The ceilings were 7 feet high. One toilet on each floor was shared by all of the occupants; the drain emptied into the street.

Since these tenements were constructed side by side, there were no windows. Smoke from the cooking fires drifted up the staircase and vented out of a hole cut in the roof.

Typically, more than 30 families resided in one 25-foot by 100-foot tenement building. Rents ranged from $10 to $15 per month.

William Backhouse Astor came to oversee this business, with precision and care.

He had been forced to give up his study of the classics. It seemed as if he subsequently refocused that intellectual energy onto the management of his father’s empire. Instead of studying Xenophon’s Battle of Cunaxa, William Backhouse studied deeds, leases and rental agreements.

William turned out to be exactly the sort of son his father had wanted. He was shy and reclusive, with few friends and no interests or hobbies. He never attended parties. He was never known to smile.

Under his vigilant eye, the family wealth grew at an annual rate of 7 percent to 15 percent.

The Astors owned the bare land and leased it to others. They, in turn, subleased it to others, who constructed and managed the tenements. So despite having somewhere between 720 and several thousand tenements constructed on his family’s property, William Backhouse could honestly say the buildings were not his, nor was the misery caused by these slums.

This denial was extremely convenient when a study appeared in 1845 that revealed it was unhealthy to cram too many people into the damp, dark tenements. The study showed that because of the resulting filth, squalor and disease, 25 percent of New York’s tenement children died within their first year; one-third of the children never saw their 5th birthday.

Meantime, William’s daughter-in-law arranged the family table with her famous 40-piece settings of pure gold. She purchased $400 worth of roses to decorate her dining table.

While tenement children played in the filthy gutter to escape the foul air of their over-crowed apartments, William Backhouse’s son spent $2.3 million remodeling his 62-room Newport “summer cottage.”

John Jacob Astor’s greatest fear had been that his children would lose control of the fortune Dad had amassed. Not to worry.

William became known as the “Landlord of New York City.” Of course, none of the people who lived on the Astor lands would have recognized him. He kept his name out of the newspapers and never attended social functions or dinners. Still, this self-imposed isolation ended in the 1860s.

During the Civil War, the U.S. Congress passed an income tax to help finance the war. William Backhouse was outraged that he should be asked to give the government money. He financed a legal fight all the way to the Supreme Court, where he used his vast wealth to ensure the very notion of an income tax would be found unconstitutional.

Yet another “insult” brought William into the public’s eye in 1867 amid a growing health crisis. There were 500,000 people living in filthy tenements. The New York Legislature proposed they reduce that population before the outbreak of a fatal epidemic.

Instead of constructing 25-foot by 100-foot buildings on each 25-foot by 100-foot lot, the Legislature proposed that 40 percent of each lot be reserved for green space and daylight. This would create a healthier environment.

William Backhouse was infuriated. Yet again, he used his limitless wealth to send a battalion of lawyers to the Legislature to hammer out a compromise.

In the end, it was agreed he would reduce a tenement’s footprint by 5 percent. Then he raised the rent by 10 percent as compensation for any loss of income.

John Jacob Astor passed away in 1848 at age 84. Son William died in 1875 at age 83. Although the first two Astor men had different personalities – the father outgoing and merry, the son a curmudgeon – they were similar in many other ways.

Both men were greedy and self-serving. Both lacked any sense of obligation to the community.

While it’s true that the senior Astor had been persuaded (and somewhat tricked) into supporting the concept of the New York Public Library, he had resisted to the very last. At the time of his death, not a single brick had been laid.

It’s also true that William Backhouse donated $50,000 toward construction of St. Luke’s Hospital. But he donated only $100 to an association aiding the poor, despite a personal fortune of $60 million.

The Astors hoarded their money and lived like kings for four generations. They spent lavishly on themselves and gave as little as possible to charity. It was not until the Titanic sank in 1912 that any change occurred.

On board the Titanic was John Jacob Astor IV, 48. He and his teenaged bride were returning from an extensive honeymoon in the Mediterranean. When news of his death reached the mainland, his son, William Vincent “Jack” Astor, an 18-year-old college student, instantly became the wealthiest man in America, with a nest egg of $168 million.

Jack had lived a privileged life. Soon after his birth in 1891, his mother declared that she required $87,000 per year to maintain him with the bare essentials of food and clothing. His cottage in Newport had a staff of 14 servants.

Jack had been raised in the lap of luxury – yet unlike the Astor men who preceded him, he was likable, considerate and generous.

This Astor was something different.

Jack was the first member of his family to recognize that it was this country and our government that had made it possible for the Astors to amass such wealth. He felt guilty about his family’s piggish self-indulgence and greed.

So Jack Astor began to give money away, although he was very careful and wise. He gave to the arts, hospitals, universities and libraries. He gave to schools, parks, public gardens and opera houses.

In 1925, when Ralph Budd, president of the Great Northern Railroad, was promoting construction of the Astoria Column, the supporters came up short of money. If old John Jacob Astor had been alive, he would have turned his back on Mr. Budd. If son William Backhouse had been alive, he would have slammed the door in Budd’s face. If his son, William Backhouse Astor Jr., had been alive, he would have stared in silence. And if his son, John Jacob Astor IV, had been alive, he would have flatly refused.

Fortunately, those Astors were by now all dead. Fortunately, the family wealth was in the hands of young Jack Astor. When he saw the plans for the magnificent column near the ocean, he thought it a wonderful project. A check was written and Astoria Column was built.

Old man John Jacob must have rolled over in his grave when his great-great-grandson began to give away the family treasure that had been hoarded for more than 125 years.

But the community of Astoria and numerous other communities across this country greatly benefited from William Vincent “Jack” Astor’s decision to reinvest in America by sharing some of his family’s wealth.

(Rex Ziak is a native of the lower Columbia region, where he has lived his entire life. His latest book, “Eyewitness to Astoria,” is the first comprehensive study of the rise and fall of the 1811 settlement known as Fort Astoria.)

 

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