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| John Jacob Astor IV and Madeleine Astor (public domain) |
The fact a ship as large as the Titanic was built at all indicates the volume of travel in the years immediately before the outbreak of the First World War, after which that conflict and the subsequent increase of isolationist policies would curtail global trade and migration for decades. In fact, the world was a more densely interconnected economic unit in 1912 than it would be again until the early 1990s (see Frieden, xv-xvi). Tariff barriers were low due to the prevailing economic liberalism of the period, and the gold standard ensured a stable index of the value of goods across different currencies. The dominant powers in the global economy of the early twentieth century were Western Europe and the United States (though Japan, Argentina, and Thailand (then known as Siam) also experienced rapid expansion), so it is not surprising that a number of multimillionaires, some of whom lived and some of whom died, travelled aboard the ill-fated liner. Nor is it surprising that many of the millionaires aboard the Titanic made their fortunes in the transportation business itself. In addition to J. Bruce Ismay, chairman of the White Star Line that owned and operated the enormous liner, the ship hosted such railroad magnates as John B. Thayer (vice president of the Pennsylvania Railroad), George Widener (a cable- and streetcar magnate), and Charles M. Hays (executive of the Grand Trunk Railroad). Railroads, in this era before the start of long-haul trucking, did not exist simply to get people to and from work; as a glance at the route maps for the North American railroad grid show, they were designed to bring goods from the interior to the coasts for export overseas. To accumulate great wealth in the early twentieth century, as now, required the manipulation of markets that spanned the world.
The manner in which two of the richest men aboard the Titanic, John Jacob Astor IV and Benjamin Guggenheim, acquired their fortunes demonstrates how global capitalism grew over the course of the 19th century and blossomed in the early 20th. In an age when income and inheritance taxes were non-existent, family fortunes could accumulate over generations far more easily than today. The richest man on the Titanic, John Jacob Astor IV (1864-1912), inherited immense sums from his merchant ancestors. The Astor fortune was founded by John Jacob Astor (1763-1848), born in Baden (in modern Germany) as Johann Jacob Astor. A recent biographer, Axel Madsen, introduces Astor as "one of the first merchants to imagine the world as a global economy" (1). Astor manifested this imaginative understanding of the opportunities global trade had created in particular by trading in furs, tea, silk, real estate, and occasionally opium.
The fur trade was pioneered in the early 17th century by the French adventurer Samuel Champlain, who had, in fact, been pursuing a different dream of global wealth: finding a quick route to China (see Brook, Chapter Two). Throughout the 17th and into the 18th century, China was the engine of the world economy; the reason Spain and Portugal rushed to develop silver mines at locations in the New World like Potosi (in modern Bolivia) and Minas Gerais (in Brazil), giving further impetus to the African slave trade in the process, was because the metal had such value in China, whence originated the luxury goods most coveted and profitable in Europe. Astor in effect closed the circle; one of the foundations of his fortune was the direct trade of furs and skins from what is now Western Canada to China for tea and silk, which he then re-sold at enormous profits in Europe and America. Later, he would dabble in the lucrative opium trade (Madsen 167), purchasing low-grade Turkish opium that English merchants, who dominated the commerce in narcotics at the time, would use to adulterate the better quality drug harvested from the Indian subcontinent, thus increasing their profits from users in China. China tried at times to restrict or end the trade, but British military power enforced its continuation.
Astor in turn plowed his trading profits into real estate, perceiving that the new role of New York in the global economy would lead to continued expansion of the city, the developed areas of which then hardly extended above Canal Street. Once, in 1810, when Astor sold a property in lower Manhattan for $8000, the purchaser chided him by saying it would be worth $12,000 in just a few years. "With $8,000," Astor replied, "I buy eighty lots above Canal Street. By the time your lot is worth $12,000, my eighty lots will be worth $80,000" (Madsen, 59). Perhaps not coincidentally, 1810 was the year the New York legislature appointed a commission to study the feasibility of building what would become the Erie Canal, the waterway that made New York the great international port of the East Coast by connecting it with the St. Lawrence Seaway, and so with the American and Canadian interiors (see Koeppel). Astor died in 1848; ironically, the year that protests and revolutions broke out all over Europe (spreading to some regions of Latin America) against the concentration of wealth and power in the hands of a tiny percentage of the population (though, unlike Astor, many of the European plutocrats were the scions of old aristocratic houses).
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| The Original Waldorf-Astoria Hotel, painted by Joseph Pennell (public domain) |
Astor's great-grandson who would die on the Titanic, J. J. Astor IV, drew upon his inherited wealth to found the Waldorf-Astoria Hotel with his cousin, William Waldorf Astor, who represented the British branch of the family (another instance of Astor internationalism; not coincidentally, the UK was the largest industrial center in the world throughout most of the 19th century). The original Waldorf-Astoria, located at the corner of 34th Street and Fifth Avenue from 1893-1929 and designed by Henry Janeway Hardenbergh (also the Dakota Building's architect; see Kaplan, 85), was in some ways a model for the Titanic itself; luxury liners aspired to be floating versions of luxury hotels. The ornate building of the original Waldorf-Astoria would eventually be replaced by a more imposing icon of international business, a structure whose clean and forceful lines bespoke not luxury but power: the Empire State Building. The confidence the global plutocrats of 1912 possessed in their right to enjoy their immense fortunes in as public a manner as they wished, as signified by the exuberant decoration of the old Waldorf-Astoria, did not endure into the Great Depression, when the skyscraper that still symbolizes New York's direct style and dedication to efficient work was built. Indeed, as Steven Biel notes, the Titanic's sinking quickly became a metaphor for the passing of the age of arrogant wealth it came to represent (See Biel, Chapter Three, "Mammon").
