Financial History Issue 133 (Spring 2020) | Page 18

Account of Aaron Burr’s debt to the Manhattan Company, 1802.
private enterprise operating in the inter-
est of the public might be the best way to
quickly bring in the much-needed clean
water supply, while accommodating the
city’s inability to cover such costs.
In his proposal, Browne recommended
a company that would issue 2,000 shares
of stock at $100 per share with no indi-
vidual owning more than one share.
In return, the company would provide
300,000 gallons of water each day in a way
that permitted all the water to be diverted
to any location for use in firefighting.
Unused water from the daily allotment
could be used to clean the streets. House-
holds would be charged $10 per year in
exchange for 30 gallons of water piped
directly into each house per day; or house-
holds could pay $2 per year to forgo
hooking into the water system but retain
protection from fire. The return on invest-
ment of the shareholders was expected to
be 13% after 10 years.
The Common Council continued to
accept plans for delivering clean water
to the city, but made no decision until
the summer’s bout with yellow fever
came to an end in November. Ultimately,
the Common Council decided to move
forward with a variation on Browne’s
proposal. Opposed to a private company
taking on the project, as it feared the com-
pany would gain while the city suffered,
the Council proposed state legislation that
authorized taxes, loans or auction sales to
fund the project. Aaron Burr—attorney,
war officer and politician—having previ-
ously held the positions of State Attorney
General and US Senator, was newly elected
to head the New York State Assembly with
a wave of fellow anti-Federalists in the
spring of 1797. Burr was also Browne’s
brother-in-law.
An Act
As the head of the New York State Assem-
bly in 1799, Burr was responsible for see-
ing the bill through the legislative process.
Newspapers published conflicting opin-
ions on the quantity and quality of water
in the Bronx, as well as the costs of bring-
ing water to New York City. Burr’s New
York Assembly delegation found it dif-
ficult to prepare the bill for a full vote. He
pressured other committeemen to allow
a private company to run the project as
Dr. Browne suggested. He reportedly even
intercepted correspondence and excluded
delegates from meetings to press his case.
16    FINANCIAL HISTORY  |  Spring 2020  | www.MoAF.org
Portrait of Mayor Richard Varick
Burr was granted a 10-day leave to
return to Manhattan from Albany to get
a better sense of the opinions of the Com-
mon Council and the public. On February
22, 1799, he visited Mayor Richard Varick
with five other notable citizens, including
his political rival, Alexander Hamilton
(former US Secretary of the Treasury and
founder of the Bank of New York). This
group convinced the Mayor and Council
to endorse Burr’s plan. Hamilton, in par-
ticular, made the case for a private water
company, fearing the city and state would
be unable to pay for the venture. The
proposed plan was for a private company,
incorporated by the state, to be “capital-
ized at $1 million in $50 shares,” of which
the city would be entitled to a third. Those
shares could be purchased through taxes,
loans or state auctions. Seven directors
would manage the company, six of whom
would be elected plus one city official. This
proposal won over the city officials, but
Burr had a different idea about who would
manage the company.
Meanwhile, Burr gathered public peti-
tions to send back to the Assembly in sup-
port of the private company. James Fairlie
introduced Burr’s petitions in the Assem-
bly on March 27, 1799, along with a draft