"A very convenient instrument": The Manhattan company, Aaron Burr, and the election of 1800

William and Mary Quarterly

Volumn 65, Issue 2, 2008, Pages 233-265

  Murphy, Brian Phillips ^a  

^a UNIVERSITY OF VIRGINIA   (United States)

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EID: 58149278766     PISSN: 00435597     EISSN: 1933-769     Source Type: Journal    
DOI: 10.2307/25096785     Document Type: Article

References (114)

1. Edward Livingston to Thomas Jefferson, Apr. 11, 1800, in Julian Boyd etal., eds., The Papers of Thomas Jefferson (Princeton, N.J., 2004), 31: 494-95(quotation, 31: 495);
2. For insight on the controversial nature and character of Aaron Burr, see Nancy Isenberg's biography, Fallen Founder: The Life of Aaron Burr (New York, 2007).
3. See also Joanne Freeman, Affairs of Honor: National Politics in the New Republic (New Haven, Conn., 2001), 192-95, 205-13;
4. Isenberg, "The 'Little Emperor': Aaron Burr, Dandyism, and the Sexual Politics of Treason, " in Beyond the Founders: New Approaches to the Political History of the Early American Republic, ed. Jeffrey L. Pasley, Andrew W. Robertson, and David Waldstreicher (Chapel Hill, N.C., 2004), 129-58.
5. Dealing specifically with the Manhattan Company are Beatrice G. Reubens, "Burr, Hamilton and the Manhattan Company Part I: Gaining the Charter, " Political Science Quarterly 72, no. 4 (December 1957): 100-125;
6. Gregory S. Hunter, The Manhattan Company: Managing a Multi-Unit Corporation in New York, 1799-1842 (New York, 1989).
7. Howard Bodenhorn suggests that legislators claimed that Burr had dupedthem to give themselves political cover. See Bodenhorn, State Banking in Early America: A New Economic History (New York, 2003), 134.
8. Robert E. Wright offers an alternative narrative to the common Burr-as-trickster story by proposing two explanations of the documented events:legislators, rather than being duped, were too pressed for time to read theamended charter in its final form, and Alexander Hamilton in fact supported the Manhattan Company's entry into banking for reasons of ideology and politicaleconomy but opposed it publicly to politically injure Burr. See Wright, "Artisans, Banks, Credit, and the Election'of 1800, " Pennsylvania Magazine of History and Biography 122, no. 3 (July 1998): 211-39.
9. Echoing claims of banking partisanship, Bray Hammond (in his seminalhistory of American banking) writes that the Bank of New York and the New Yorkbranch of the Bank of the United States "both were Federalist." See Hammond, Banks and Politics in America, From the Revolution to the Civil War(Princeton, N.J., 1957), 149.
10. For more on the Federalism of banking, see Reubens, "Burr, Hamiltonand the Manhattan Company Part II: Launching a Bank, " Political Science Quarterly 73, no. 1 (March 1958): 578-607.
11. See also Matthew L. Davis, Memoirs of Aaron Burr, With Miscellaneous Selections from His Correspondence (1836;
12. Henry W. Domett, A History of the Bank of New York, 1784-1884 . . . (New York, 1884), 42;
13. Henry Wysham Lanier, A Century of Banking in New York, 1822-1922 (New York, 1922), 16;
14. Alfred F. Young, The Democratic Republicans of New York: The Origins, 1763-1797 (Chapel Hill, N.C., 1967), 229-30;
15. Milton Lomask, Aaron Burr: The Years from Princeton to Vice President, 1756-1805 (New York, 1979), 221-30;
16. Bodenhorn, State Banking in Early America, 133.
17. For an overview of the role directors played in banks in the early Republic, see Naomi R. Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (Cambridge, 1994).
18. Alfred F. Young's study of New York Republicans proclaims that in 1797"the Democratic Republicans of New York were in full bloom, the contours ofthe movement clearly shaped." See Young, Democratic Republicans of New York, 566 (quotation), 576. I contend that though Republicans may have been ableto identify sympathizers, they were at an institutional disadvantage comparedwith the Federalists until the founding of the Manhattan Company. The role ofprivate benefit as a catalyst for collective action and group formation islimited, subject to contingent identities and events. The link between bankingprivileges and Republican Party membership in 1799 and 1800 created incentivesfor voters to openly support Republicanism. Among a limited set of Federalistsand Republicans, the Manhattan Company's partisan project eliminated the need tomute partisan leanings for fear of compromising financial viability.Republicans could identify one another through subsidiary credit networks thatcentered around Republican Manhattan Company directors.
19. A summary of cross-disciplinary literature on the role of privateinterests in group formation can be found in Frank R. Baumgartner and Beth L.Leech, Basic Interests: The Importance of Groups in Politics and Political Science (Princeton, N.J., 1998), chap. 2.
20. For more on the Federalist view of interests in the early Republic'spolitical economy, see Cathy D. Matson and Peter S. Onuf, A Union of Interests:Political and Economic Thought in Revolutionary America (Lawrence, Kans., 1990).
21. Competition among interests within comparative dynamic politicalcircumstances is explored by Alan Tully, Forming American Politics: Ideals, Interests, and Institutions in Colonial New York and Pennsylvania (Baltimore, 1994). See chap. 10 for a discussion of party politics.
22. My thinking on this subject has been particularly influenced by Joyce Appleby, "Commercial Farming and the 'Agrarian Myth' in the Early Republic, " Journal of American History 68, no. 4 (March 1982): 833-49;
23. Appleby, Capitalism and a New Social Order: The Republican Vision of the1790s (New York, 1984).
24. See also Isaac Kramnick, "Republican Revisionism Revisited, "American Historical Review 87, no. 3 (June 1982): 629-64.
25. For a view of postrevolutionary New York politics based on competitionamong interest groups, see Edward Countryman, A People in Revolution: The American Revolution and Political Society in New York, 1760-1790 (Baltimore, 1981), 221-79.
26. The work of Richard R. John and the new institutionalism withintwentieth-century state formation historiography has been of prime importance indeveloping this article. By considering the corporation as an extension of thestate and reincorporating the state into political culture, I hope to illuminatethat the relevancy of institutions in political party formation parallels thedevelopments within the state itself. For an introduction to thisinstitutionally focused approach to political history, see John, "Governmental Institutions as Agents of Change: Rethinking American Political Development in the Early Republic, 1787-1835, " Studies in American Political Development 11, no. 2 (Fall 1997): 347-80.
27. See also Karen Orren and Stephen Skowronek, "Beyond the Iconographyof Order: Notes for a 'New Institutionalism, '" in The Dynamics of American Politics: Approaches and Interpretations, ed. Lawrence C. Dodd and Calvin Jillson (Boulder, Colo., 1994), 311-30.
28. For more on banks' influence, see Robert E. Wright, "The First Phaseof the Empire State's 'Triple Transition': Banks' Influence on the Market, Democracy, and Federalism in New York, 1776-1838, " Social Science History21, no. 4 (Winter 1997): 521-58.
29. Long after other states adopted more liberal banking charter practices, the New York legislature continued to withhold banking privileges from all butthe most politically favored and loyal partisans. See Ronald E. Seavoy, The Origins of the American Business Corporation, 1784-1855 (Westport, Conn., 1982), 90.
30. For a specific example of this Federalist commercial rhetoric, see Z, "Mr. Editor, " [New York] Commercial Advertiser, Mar. 19, 1799, [3].
31. An overview of New York's growth is E. Wilder Spaulding, New York in the Critical Period, 1783-1789 (New York, 1932), 27-29.
32. For a discussion of the ways in which debt was feminized, see Bruce H.Mann, Republic of Debtors: Bankruptcy in the Age of American Independence(Cambridge, Mass., 2002), 120-21, 162-64.
33. For a discussion of the Republicans' vision of a classless society, see Appleby, Capitalism and a New Social Order, 74;
34. Doron Ben-Atar and Barbara B. Oberg, "Introduction: The Paradoxical Legacy of the Federalists, " in Federalists Reconsidered, ed. Ben-Atar and Oberg (Charlottesville, Va., 1998), 1-16, esp. 12;
35. For anecdotal evidence of Federalists' demand for deference from artisansand mechanics, see Howard B. Rock, Artisans of the New Republic: The Tradesmenof New York City in the Age of Jefferson (New York, 1979), 5-7.
36. For a brief account of how opposition to the Bank of the United Statesunified Thomas Jefferson and Robert R. Livingston, see Stanley Elkins and Eric McKitrick, The Age of Federalism (New York, 1993), 242-44.
37. For a summary of Jefferson's objections to the Bank of the United States, see Herbert Sloan, Principle and Interest: Thomas Jefferson and the Problem of Debt (New York, 1995), 171-73, 179-80, 192.
38. In light of the more controversial aspects of the Manhattan Company andthe city's eventual assumption of its water utility responsibilities, thecompany's civic nature has been particularly neglected by historians. Yet at thetime of the election of 1800 the company was constructing the city's firstwater system, having departed from an unworkably ambitious agenda to divertwater from the Bronx River in favor of an achievable and sustainable plan to usewells and a reservoir. See Nelson Manfred Blake, Water for the Cities: AHistory of the Urban Water Supply Problem in the United States (Syracuse, N.Y., 1956).
39. For the importance of civic ceremony and the public sphere in partisanpolitics, see David Waldstreicher, In the Midst of Perpetual Fetes: The Makingof American Nationalism, 1776-1820 (Chapel Hill, N.C., 1997), 216-45.
40. Lamoreaux, Insider Lending, 2-5.
41. See also J. Van Fenstermaker, The Development of American Commercial Banking, 1782-1837 (Kent, Ohio, 1965);
42. Richard Sylla, "Forgotten Men of Money: Private Bankers in Early U.S. History, " Journal of Economic History 36, no. 1 (March 1976): 173-88;
43. Fenstermaker and John E. Filer, "Impact of the First and Second Banks of the United States and the Suffolk System on New England Bank Money, 1791-1837, " Journal of Money, Credit, and Banking 18, no. 1 (February1986): 28-40;
44. Benjamin J. Klebaner, American Commercial Banking: A History (Boston, 1990);
45. Edwin J. Perkins, American Public Finance and Financial Services, 1700-1815 (Columbus, Ohio, 1994);
46. Howard Bodenhorn, A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building (New York, 2000);
47. Robert E. Wright, The Origins of Commercial Banking in America, 1750-1800(Lanham, Md., 2001).
48. Lamoreaux, Insider Lending, 68-69. The differences between land and moneybanks fueled bank conflicts during the 1780s.
49. For more on the divisions within New York politics, see Spaulding, New York in the Critical Period, 101-2.
50. Though E. Wilder Spaulding's treatment is antiquated, it is moresympathetic to the anti-Federalist bank opponents in the New York legislaturethan Jackson Turner Main's assessment in Main, The Antifederalists: Critics ofthe Constitution, 1781-1788 (Chapel Hill, N.C., 1961).
51. For a brief account of Alexander Hamilton's plan and congressionalopposition, see Elkins and McKitrick, Age of Federalism, 226-36.
52. For Hamilton's bank plan, see Harold C. Syrett et al., eds., The Papersof Alexander Hamilton (New York, 1963), 7: 305-42.
53. For more on concerns about the effects a national bank would have onsmaller banks, see Steven Kirk Bane, "'A Group of Foreign Liars':Republican Propagandists and the Campaign against the Federalists, 1789-1801" (Ph.D. diss., Texas Christian University, 1993), chap. 7.
54. Concerns about collisions among chartered, competing banks are referencedin Alexander Hamilton to Low, Dec. 21, 1791, in Syrett et al., Papers of Alexander Hamilton, 10: 398-400, esp. 10: 398-99. This " divisiveparticularism" was feared by Hamiltonians and Federalists, who saw statebanks as impermanent devices created by states to undermine the effectivenessand efficiency of the national bank.
55. See Stuart Bruchey, "Alexander Hamilton and the State Banks, 1789 to1795, " WMQ 27, no. 3 (July 1970): 347-78 (quotation, 347).
56. See Bruchey, WMQ 27: 349;
57. David J. Cowen, "The First Bank of the United States and the Securities Market Crash of 1792, " Journal of Economic History 60, no. 4(December 2000): 1041-60 (quotation, 1049 n. 31);
58. Hammond, Banks and Politics in America, 69-70, 149.
59. Jabez D. Hammond, The History of Political Parties in the State of New-York . . . , 3d ed. (Cooperstown, N.Y., 1845), 1: 324 (" bancomania");
60. See Appleby, "Thomas Jefferson and the Psychology of Democracy, " in The Revolution of 1800: Democracy, Race, and the New Republic, ed. James Horn, Jan Ellen Lewis, and Peter S. Onuf (Charlottesville, Va., 2002), 155-172, esp. 159.
61. Hammond, History of Political Parties, 1: 325. Credit availabilitydepended on the willingness and capacity of secondary and tertiary cosigners whomight have little firsthand knowledge of the actual borrower.
62. As Joanne B. Freeman writes, "the political elite remainedprofoundly uncomfortable with . . . political methods" during the 1790s.See Freeman, "Corruption and Compromise in the Election of 1800: The Process of Politics on the National Stage, " in Horn, Lewis, and Onuf, Revolution of 1800, 87-120 (quotation, 89). It was unwise for a prominent personto advertise a denial of credit for any reason.
63. See Gustavus Myers, The History of Tammany Hall, 2d ed. (1917;
64. Merchant and former general John Lamb, a creditor to Aaron Burr, indicated that since the Bank of New York "had always exercised animportant influence upon the elections, its power upon the approaching struggle[in 1792], was not weakened by the stability which it had acquired by itscharter." See Isaac Q. Leake, Memoir of the Life and Times of General John Lamb . . . (1850;
65. For more on voting procedures, see Sidney I. Pomerantz, New York, AnAmerican City, 1783-1803: Study of Urban Life (New York, 1938), 131.
66. Edmund Philip Willis, "Social Origins of Political Leadership in New York City from the Revolution to 1815" (Ph.D. diss., University of California, Berkeley, 1967), 55.
67. For more on the role of the press in advancing partisanship in the early Republic, see Jeffrey L. Pasley, "The Tyranny of Printers": Newspaper Politics in the Early American Republic (Charlottesville, Va., 2001), chap. 1.
68. For further explanation of this strategy, see Hendrik Hartog, Public Property and Private Power: The Corporation of the City of New York in American Law, 1730-1870 (Chapel Hill, N.C., 1983).
69. Pauline Maier explores the question of why states chartered corporationsin great numbers after the Revolution given Old Regime anxieties concerningcorporations' aristocratic origins and the alternatives available to statelegislatures for managing internal improvements. Maier concludes that though theanticharter doctrine deployed against corporations in the 1780s and 1790screated a ready source of opposition, it was based on antiquated models ofcorporations that were no longer valid. The corporate form changed to embracethe heritage of the Revolution. Maier identifies the corporate form as thecontested ground in incorporation debates, reflecting a fascination withconstitution making that allowed charters to become more efficient withoutthreatening the public good. See Maier, WMQ 50.
70. See An Act of Incorporation of the Manhattan Company (New York, 1799), 7.If the company did not meet that requirement within ten years, it would forfeitits charter.
71. For comparisons with other charters for water companies, see Blake, Waterfor the Cities.
72. Act of Incorporation, 11 ("It shall");
73. Davis, Memoirs of Aaron Burr, 1: 414 ("intended [that]").
74. Alexander Hamilton proposed seven directors for the Manhattan Company.The Bank of New York charter he wrote in 1784 called for that institution tohave thirteen directors. Why the difference? He likely wanted the council toretain control over the Manhattan Company, hence his suggestion to make the cityrecorder a director and give the city the option to purchase one-third of thecompany's shares. See "An Act to Incorporate . . . the Bank of New-York . .. , " in Laws of the State of New-York, Fourteenth Session (New-York, 1791), 25-27.
75. For stock allocations, see Stock Dividend Book, Manhattan Company, in RG1, Chase Manhattan Bank Archives. For more on Morris and the debate, see Davis, Memoirs of Aaron Burr, 1: 415-16.
76. Nicholas Low to Rufus King, Apr. 17, 1799, in Rufus King Papers, vol. 37(quotation). Federalist shareholders included city recorder Richard Harrison, who was also an ex officio director of the Manhattan Company. He bought onethousand shares for himself and pushed the city to exercise its buying option.See Peterson, Minutes of the Common Council, 2: 535-37, esp. 2: 535-36.
77. Some of the Federalists buying shares were A. L. Bleecker, Charles Cammann (a director of the Bank of New York), Isaac Governeur (a director of the New York branch of the Bank of the United States), and James Roosevelt.Federalist New York City Mayor Richard Varick and Lieutenant-Governor Stephenvan Rensselaer, Alexander Hamilton's brother-in-law, also became stockholders.Among the Republicans, DeWitt Clinton bought one thousand shares; Burr'sassociate and fellow assemblyman John Swartwout and Chancellor Robert R.Livingston each purchased two thousand shares, making them the largestshareholders. See Stock Dividend Book, Manhattan Company, in RG 1, Chase Manhattan Bank Archives.
78. John P. Kaminski, George Clinton: Yeoman Politician of the New Republic(Madison, Wis., 1993). As an example of the potential confusion concerning thename of the party, see "At a meeting of the Democratic Society of the Cityof New-York . . . , " May 28, 1794, Library of Congress American Memory Project, http://hdl.loc.gov/loc.rbc/rbpe.1120120a.
79. A. B. Street, The Council of Revision of the State of New York (Albany, N.Y., 1859), 423. Several historians have explored the labyrinthine details ofthe Manhattan Company charter's passage.
80. See Reubens, Political Science Quarterly 72;
81. See Reubens, Political Science Quarterly 73: 100.
82. As Pauline Maier noted, a significant early Republic anticharter argumentconcerned the limited availability of shares to the public, which denied many achance to partake of the profits generated by a corporation. Such a situationcast doubt on the corporation's ability to serve the public good. See Maier, WMQ50.
83. See also Andrew Jackson's veto message for the Bank of the United Statesin Lee Benson, The Concept of Jacksonian Democracy: New York as a Test Case(Princeton, N.J., 1961), chap. 5.
84. Robert Troup to Rufus King, Apr. 19, 1799, in Rufus King Papers, vol. 47("[Burr] governs");
85. See Blake, Water for the Cities, 46-47, 56-58.
86. Nicholas Fish to Arthur Noble, Feb. 13, 1800, in RG 1, box 1, Chase Manhattan Bank Archives ("was the author");
87. Peter Jay to John Jay, May 3, 1799, in Jay Papers, http://www.columbia. edu/cu/lweb/digital/jay/search.html (Jay ID no. 6083).
88. An Elector, "To the Editor of the Daily Advertiser, " [New York]Daily Advertiser, Apr. 4, 1799, [2] ("Commerce");
89. The question of whether Federalists realized what they were creating inthe Manhattan Company has turned on the authenticity of their denials. Sidney I.Pomerantz writes, "responsibility for the passage of the Manhattan Companycharter must be placed squarely on the Federalists, " contending that thecontroversy they raised in the election of 1799 was "artful politicalmaneuvering that had made Burr the arch-conspirator in the Manhattan Companyaffair . . . so skillfully executed that historians to this day haveuncritically accepted the accusations heaped upon him in the bitterness of anelection campaign." See Pomerantz, New York, An American City, 187-91.
90. A Merchant, "For the Commercial Advertiser, To the Merchants of New-York, " Commercial Advertiser, June 8, 1799, [2] ("I amwilling");
91. Bray Hammond, arguing the opposite, suggests that legislators were tooattentive to charters to have made such a mistake; Burr, therefore, had trickedthem. See Hammond, "Long and Short Term Credit in Early American Banking, " Quarterly Journal of Economics 49, no. 1 (November 1934): 85.
92. Greenleaf's New York Journal and Patriotic Register, May 1, 1799, [2].
93. Clearly, there was rarely occasion to hold board memberships at competinginstitutions given the small number of incorporated banks. William Laightbelieved it was "improper to hold an office of similar import in any otherinstitution whose object is pointed to the same end and whose mode of producingthe same effect may possibly contravene each other." See Minutes of the Board of Directors, May 16, 1799, in RG 1, vol. 1, Chase Manhattan Bank Archives.
94. James O. Wettereau has written that in 1793, Thomas Fitzsimons, adirector for the Bank of North America, was elected to the board of the New Yorkbranch bank but declined to serve. Interlocking directorships between banks, like interlocking stock ownerships, were frowned on earlier in the decade.Laight's move, therefore, was not without precedent. See Wettereau, "The Branches of the First Bank of the United States, " Journal of Economic History 2 (December 1942): 66-100, esp. 75.
95. For more on the Manhattan Company's board in relation to the commercialculture of New York, see J. Scoville, The Old Merchants of New York (New York, 1885), 2: 190-94.
96. For more on the view that the Manhattan Company should be annihilated, see Julius, "For the Commercial Advertiser, " [New York] Spectator, May29, 1799, [4].
97. For the Bank of New York charter, see "Act to Incorporate, " in Laws of New-York, Fourteenth Session, 25-27.
98. For the Manhattan Company charter, see "An Act for supplying the City of New-York with pure and wholesome Water, " in Laws of the State of New-York, Passed at the Twenty-Second Session . . . (Albany, N.Y., 1799), 810-17.
99. For more on the Bank of New York charter, see Domett, History of Bank of New York, 57.
100. For more on the mourning of George Washington, see [New York] Weekly Museum, Jan. 4, 1800, [3].
101. Cheetham, Impartial Enquiry, 9-11 (quotations).
102. For more on issues of control in banks and commercial firms'relationships, see Joseph G. Haubrich and João A. C. Santos, "Alternative Forms of Mixing Banking with Commerce: Evidence from American History, " Financial Markets, Institutions and Instruments 12, no. 2 (May2003): 121-64.
103. My calculations are based on ledger entries for Mar. 30, June 30, 1800, Manhattan Company Ledger, in Chase Manhattan Bank Archives, RG 1, bk. 1. Thanksalso to Robert E. Wright for his assistance. See Wright, "Banking and Politics in New York, 1784-1829" (Ph.D. diss., State University of New York, Buffalo, 1996), 239-64.
104. An Independent Cartman, "To the Cartmen of New-York, " American Citizen and General Advertiser, Apr. 29, 1800, [2] ("at the lastelection");
105. Philander, "For the American Citizen. To the Cartmen of New-York, " American Citizen and General Advertiser, Apr. 29, 1800, [3]("rendered the merchants").
106. In city elections freeholders were allowed to vote in each ward wherethey owned property worth at least $100; renters, however, wereineligible to vote. The requirements for state elections were more relaxed, witha £20 property or a $5 annual rent qualification. Thus the citygovernment was firmly in the hands of property owners but state and federalelections were more competitive, with twice as many renters as property owners.Throughout the 1790s anti-Federalist and Republican votes were concentratedamong these laborer and immigrant renters, who lived in a poverty belt north ofthe city's commercial areas. Republicans carried the heavily rented Sixth and Seventh wards by up to 90 percent; Federalists produced similar margins in thewealthier First, Second, and Third wards. For wealth distribution calculations, see Willis, "Social Origins of Political Leadership, " 58 (fig. II-4), 60 (table II-5).
107. For more on laborers' affinity for Republicans, see Rock, Artisans of the New Republic; Howard B. Rock, "The Artisan and the State in the 1790s: AComparison of New York and London, " in New York in the Age of the Constitution, 1775-1800, ed. Paul A. Gilje and William Pencak (Rutherford, N.J., 1992), 74-97.
108. Thomas Jefferson to James Monroe, Mar. 4, 1800, in Davis, Memoirs of Aaron Burr, 2: 55 ("in New-York");
109. Marcellus, "To the People of the city and State of Ny, "Commercial Advertiser, Apr. 25, 1800, [2] ("Let nothing").
110. Freeman, "Corruption and Compromise, " 99 ("of aleague");
111. Alexander Hamilton to James A. Bayard, Jan. 16, 1801, in Syrett et al., Papers of Alexander Hamilton, 25: 319-24 ("by a trick, " 25: 321n);
112. DeWitt Clinton to Henry Remsen, Mar. 16, 1808, in Reubens, Political Science Quarterly 72: 122 ("cause of republicanism");
113. "Banking, " American Citizen and General Advertiser, Jan. 21, 1801, [2] ("weapons of faction");
114. Mentor, "For the American Citizen. To Alexander Hamilton, "American Citizen and General Advertiser, May 8, 1801, [3].