American Fur Trading Company And John Jacob Astor

The American Fur Company and John Jacob Astor

I. Introduction

"Power tends to corrupt, and absolute power corrupts absolutely (Lord Acton). John Jacob Astor was a man that had absolute power during his era and used his power and wealth to benefit himself and not the "social fabric of society". Astor lived during the time of a post-revolutionary America which allowed him to build a monopolist empire with little restraint from government or society. Starting out in American as a young German immigrant, John Jacob Astor became involved in the fur trading business "without ever having set a trap" (Stokesbury) and eventually built a fur trading company that extended across the United States and into Canada and made him the richest man in America and the fourth richest American of all time (Wikipedia). Many of his business methods were unethical and illegal and took advantage of those without the means or ability to protect their interests. His wealth influenced government policies and politicians to favor his ambitions, gave him unfair advantage over his competition and fostered a destructive business environment. His "extraction mentality" was detrimental to society, especially to those people who where directly affected by his business practices.

II. Identification of Issues

One the most important issues that the expansion of the American Fur Company illustrates is the lack of social responsibility a large corporation, more specifically Astor and his company, had towards its stakeholders and the effect this had on society. Astor's company created large amounts of wealth due to the efforts of its workers but little of those economic gains were passed on to them. John Jacob Astor's business practices had a lasting impact on business and society for many years to come. His business practices set a precedent for other big business trusts that came after him. John Jacob Astor followed a "dominance model" type of management where "corporations and a powerful elite control a system that enriches a few at the expense of the many" (Steiner 13). American was built on democratic ideals and this was contrary to those beliefs. He assumed that he could do anything to further his business and increase his profits regardless of the affect it had on others. He was an ambitious man, who lived during a time in America where there weren't antitrust laws, organized labor or the media to report his every action (Stokesbury).

This "extractive mentality" had a devastating effect on many on the major stakeholders during this time who were treated unjustly. Mostly notable were the Indians and the trappers. This issue shows how the objectives of American Fur Company were able to ride over the needs of these groups because there were little external influences to reduce their power. Another issue was how the cultural environment of the Native American Indians did not center on money and material goods and because of this Astor was able to take advantage of their naivety in regards to the value of what they were trading. The "extractive mentality" that was carried out at this time also impacted the natural environment of America. With no regards to the fact that resources can run out, Astor and his company stripped all they could for profit.

Another key issue is the duty that the government has towards its citizens and the effect that the abuse of public office has on the economic and social growth of a nation. A critical part of the success of the American Fur Company was the ability of Astor to use government policy to his advantage either through paying-off officials, ignoring the laws, or having the government pass laws for his benefit. The government has an obligation to treat its citizens fairly by enforcing the laws of the land, but this didn't happen during the American Fur Company era.

Throughout his career, Astor dealt unethically in his business practices and rarely had to answer to society for it because the amount of power he wielded in it. "He was a war profiteer, slumlord, opium trader and notorious cheapskate, Astor didn't even pay lip service to morality. He was the "personification of monopoly, determined to rule or ruin," wrote historian Hiram Martin Chittenden in 1903. "And he was thoroughly hated even by those who respected his power" (Crossen). The issue arises should one person be able to control that much power and isn't held accountable for the use of that power to society?

One complicated issue of the American Fur Company reign was its impact on the expansion of the United States westward. It strongly influenced the history of the west, not only making way for permanent settlements but by also opening the Great Lakes commercial fishing, steamboat transportation, and trade in that area (Stokesbury). But was the benefit derived from this westward expansion justified by the "extraction" that took place against its stakeholders or those it affected? Is injustice every justified?

III. Analysis of Issues

Astor, in his desire for more money and greater profit, completely disregarded the needs of the people his actions affected. This lack of social responsibility was the American Fur Company's worst offense. His was constantly looking for ways to improve his financial bottom line. Whatever means were needed to increase his company's hold on the American fur trading industry was permissible. When Astor learned that President George Washington was having the government set up fur-trading posts "to be run with benevolent policies", which would require goods to be sold at cost, ban the use of liquor and require payment of fair prices for furs (Steiner 45), he promptly found a way to undermine fair trade by contravening government policies. Astor would trade trinkets that were unfairly priced with the Indians for the furs and would also provide alcohol during the negotiations.

The Indians were some of the most important "stakeholders" of the fur trading business as they trapped many of the beavers, and Astor's destructive policies towards the Indians greatly impacted the quality of their lives and "undermined their cultures" (Steiner 51). The fur company's encouragement for Indians to trade goods on credit created large amounts of debt for the tribes that then forced them to trade with him (Steiner 48). The Indians were inadequately prepared to understand the workings of the "white man's" business world. Another important "stakeholder" in the fur business was mountain men or trappers who were treated