Alexander Hamilton

by Chernow, Ron

  Aaron Burr’s brother-in-law, Dr. Joseph Browne, blamed contaminated water for the recurrent outbreaks of yellow fever—the city still depended on often polluted wells—and submitted a plan to the Common Council for drawing fresh water from the Bronx River. Browne’s plan contemplated the creation of a private water corporation chartered by the state legislature. The piped water was also hailed as a panacea for other civic needs, ranging from fighting fires to washing filthy streets. Although the Common Council applauded the basic concept of a water company, it countered with a proposal for a public company to conduct this business.

  In reality, Browne’s plan was a ruse concocted by Burr, who had no interest whatever in pure water but considerable interest in setting up a Republican bank. Among the many putative advantages Hamilton and his Federalist associates enjoyed in New York politics was a virtual monopoly over local banking. At the start of 1799, both of the banks in New York City happened to be the brainchildren of Alexander Hamilton: the Bank of New York and the local branch of the Bank of the United States. Republican businessmen nursed a perennial grievance that these banks discriminated against them, one Republican journalist charging that “it became at length impossible for men engaged in trade to advocate republican sentiments without sustaining material injury....As the rage and violence of party increased, directors became more rigorous in enforcing their system of exclusion.”20 It is not clear that Republicans were actually penalized, but the suspicion was certainly abroad. Hamilton opposed the vogue for state banks that proliferated in the 1790s, less from narrow political motives than from a fear that competition among banks would dilute credit standards and invite imprudent lending practices as bankers vied for clients.

  Now a member of the New York Assembly, Burr knew that any politician who smashed the Federalist monopoly in local banking would attain heroic status among Republicans—at least those who did not regard banks as diabolical instruments. Easy access to a bank also appealed to an incorrigible spendthrift such as Burr, who had ongoing money problems. In early 1797, toward the end of his term in the U.S. Senate, his financial troubles had grown so acute that he had neglected his legislative duties. To establish a New York bank, he had to scale a very high hurdle. The state legislature conferred bank charters, and it was currently under Federalist sway; in those days, every New York corporation engaged in business needed a legislative charter. As the crafty Burr cast about for a stratagem that would let him sneak a bank charter past the opposition party, he hit upon the unlikely subterfuge of using the proposed water company as a blind.

  In a cunning political sleight of hand, Burr lined up a bipartisan coalition of six luminaries—three Republicans and three Federalists—to approach the Common Council as sponsors of his proposal for a private water company. For his Federalist phalanx, he recruited Gulian Verplanck, president of the Bank of New York; John Murray, president of the Chamber of Commerce; and his greatest prize, Major General Alexander Hamilton. Why did Hamilton go along with Burr? Burr had recently flirted with the Federalists and had cooperated with Hamilton to fortify New York City against a French invasion. For the moment, the two men stood on a relatively good footing. Hamilton had survived yellow fever and would have favored a project to save the city from further epidemics. Hamilton may also have been investigating a business opportunity for John B. Church. Angelica had prodded her husband to give up his parliamentary career and return to America, but now Church seemed bored, if fabulously prosperous, in New York. Hamilton noted, “He has little to do [and] time hangs heavy on his hands.”21 Church emerged as a director of the Manhattan Company, which may have been a precondition for Hamilton’s participation. “Whatever Hamilton’s motives,” one Burr biographer has written, “no member of the committee of six worked harder [than Hamilton] to make possible Aaron Burr’s upcoming triumph in the New York legislature.”22

  On February 22, 1799, Hamilton and Burr marched into the office of Mayor Richard Varick to plead the water company’s case. After conferring with an English canal engineer, Hamilton drew up an impressive memo that went far beyond waterworks to a systematic plan for draining city swamps and installing sewers. Persuaded by Hamilton, the Common Council ceded the final decision to the state legislature. Burr must have savored the situation: he was exploiting Alexander Hamilton and enlisting his foe’s mighty pen in a clandestine Republican cause. It was exactly the sort of joke that the drolly mysterious Burr treasured. He also got Hamilton to prepare a memo for the state legislature in support of a private water company. In late March, obliging state legislators approved the creation of the Manhattan Company, and on April 2 an unsuspecting Governor John Jay signed this act into law. Earlier promises about the company providing free water to combat fires and repair city streets damaged by laying pipes—standard features of water-company contracts in other states—had been quietly deleted by Burr from the final bill.

  As usual, the devil lay in the details. At the final moment, with many legislators having departed for home and others too lazy to examine the fine print, Burr embedded a brief provision in the bill that widened immeasurably the scope of future company activities. This momentous language said “that it shall and may be lawful for the said company to employ all such surplus capital as may belong or accrue to the said company in the purchase of public or other stock or in any other monied transactions of operations.”23 The “surplus capital” loophole would allow Burr to use the Manhattan Company as a bank or any other kind of financial institution. The Federalists had dozed right through this deception because they knew of the Republican antipathy for banks and also because Burr had cleverly decorated the board with eminent Federalists.

  Burr, it turned out, was too smart for his own good. If some Republicans admired his finesse, the general electorate did not. At the end of April, as he faced a reelection campaign for his Assembly seat, voters grasped the magnitude of his deception and shunned the ticket he headed. Once Hamilton realized that Burr had hoodwinked him, he was livid. He later complained of Burr, “I have been present when he has contended against banking systems with earnestness and with the same arguments that Jefferson would use....Yet he has lately by a trick established a bank, a perfect monster in its principles, but a very convenient instrument of profit and influence.”24 Even some stalwart Republicans shuddered at Burr’s machinations. Of Burr’s discredited slate, Peter R. Livingston commented that “it would hardly be a wonder if they did lose the election, for they had such a damn’d ticket that no decent man could hold up his head to support it.”25 Burr’s editor, Mary-Jo Kline, has observed that the Manhattan Company scheme “was so baldly selfserving that it temporarily halted Burr’s political career and lost him the public office that had served him so well.”26

  On April 22, when Manhattan Company shares went on sale, they were instantly snapped up. In early September, dropping any pretense that it was principally a water company, the company opened with great fanfare its new “office of discount and deposit” on Wall Street. This bank immediately posed a competitive threat to the Bank of New York, now housed in an elegant two-story building down the block at Wall and William Streets. By its wondrously vague charter—a magic carpet of corporate possibilities—the Manhattan Company was allowed to raise two million dollars, operate anywhere, and go on in perpetuity, whereas the Bank of New York had less than one million in capital, was restricted to operations in the city, and had a charter that expired in 1811. To purchase the favor of all political cliques, Burr shrewdly parceled out the company’s twelve directorships, dispensing nine to Republicans (with places carefully allocated for Clintonians, Livingstons, and Burrites) and three to Federalists, including John Barker Church.

  Perhaps the least of Aaron Burr’s sins in organizing the Manhattan Company was his having gulled Hamilton and state legislators into granting a bank charter under false pretenses. Far more grievous were the fraudulent claims he had made for a water company. The plan set forth by Joseph Browne to rid the city of yellow fever by delivering
fresh water proved a sham in Burr’s nimble hands. In July 1799, the betrayed Browne wrote pathetically to Burr, “I expect and hope that enough will be done to satisfy the public and particularly the legislature that the institution is not a speculating job [but] an undertaking from whence will result immediate and incalculable advantages to the City of New York.”27 The doctor was swiftly disabused. The Manhattan Company promptly scrapped plans to bring water from the Bronx River—the directors had already raided its “surplus capital” for the bank— and instead drew impure water from old wells, pumping it through wooden pipes. That summer, yellow fever returned to New York with a vengeance. Not only had Burr’s plan failed to provide pure water but it had thwarted other sound plans afoot, including those for a municipal water company.

  The day after the Manhattan Company inaugurated business on Wall Street, two of its directors, Aaron Burr and John Barker Church, celebrated the event in idiosyncratic fashion: with a duel. A staunch Federalist, Church was an opinionated, quarrelsome man who never shrank from a good fight and was not averse to duels. One theory of why he had fled from England to America on the eve of the Revolution, adopting the pseudonym of John B. Carter, was that he had killed a man during a London duel.

  The present feud arose from “unguarded language” that Church used about Burr “at a private table in town,” as one New York newspaper daintily put it.28 Church’s comments referred to illicit services performed by Burr for the Holland Company, which speculated in American property on behalf of Dutch banks. The Holland Company felt hobbled by restrictions placed on New York land owned by foreigners and retained Burr as a lobbyist to deal with this impediment. Never one to idealize human nature, Burr recommended to his client that it sprinkle five thousand dollars around the state legislature to brighten the prospects for corrective legislation. The money worked wonders, and the consequent Alien Landowners Act removed the legal obstacles. On the Holland Company’s ledgers, the payment to Burr appeared not as a bribe but as an unpaid loan. As an attorney for the Holland Company, Hamilton would have known about this seamy affair and likely conveyed his findings to John Barker Church.

  In discussing Burr’s behavior, John Barker Church made the unpardonable error of employing the word bribery in mixed company. Troup reported in early September, “A day or two ago, Mr. Church in some company intimated that Burr had been bribed for his influence whilst in the legislature to procure the passing of the act permitting the Holland Company to hold their lands.”29 The allegation against Burr, Troup added, was widely believed. The instant Burr heard about Church’s derogatory remarks, he called him to a duel. Church was a quick, decisive personality—in Hamilton’s words a man “of strong mind, very exact, very active, and very much a man of business”—and forthwith took up the challenge.30 Burr’s actions could only have aggravated Hamilton’s fury about the Manhattan Company fiasco. Burr’s challenge to John B. Church seems rash until one realizes that he was eyeing the presidential election the following year. His short-lived flirtation with the Federalists had ended. After his humbling setback in the Assembly race due to the Manhattan Company, he had to remove this fresh blemish from his reputation, and a duel with Hamilton’s brother-in-law promised to embellish his image in Republican circles. The speed with which Burr entered the duel suggests that, unlike in his later confrontation with Hamilton, he had no murderous intent and went through the ritual purely for political effect. It was a very different affair of honor from one the previous year after Republican Brockholst Livingston had been attacked by Federalist James Jones as he ambled along the Battery. Jones pounced on him, thrashed him with a cane, and gave his nose a good twist. Livingston, in revenge, summoned him to a dueling ground in New Jersey and shot him dead.

  On September 2, 1799, Burr and Church rowed across the Hudson for a sunset duel. Burr chatted affably with Church and sauntered about “the field of honor” with sangfroid. One observer said there was “not the least alteration in his [Burr’s] behavior on the ground from what there would have been had they met on friendly terms.”31 Church chose Abijah Hammond, former treasurer of the Society for Establishing Useful Manufactures, for his second, while Burr turned to Hamilton’s old nemesis Aedanus Burke. That Burr’s second came from South Carolina heightens the suspicion that he was trying to woo southern Republicans with the duel.

  Contrary to legend, the encounter was not fought with pistols owned by Church and later used in the Hamilton-Burr affair. We know that the pistols belonged to Burr because of a comic mishap. Burr had explained privately to Burke that the bullets he had brought were too small for the pistols and needed to be wrapped in greased chamois leather. As the duel was about to begin, Burr saw Burke trying to tamp the bullet into the barrel by tapping the ramrod with a stone. Burke whispered an apology to Burr: “I forgot to grease the leather. But you see he [Church] is ready, don’t keep him waiting. Just take a crack as it is and I’ll grease the next!”32 In his coolly unruffled style, Burr told Burke not to worry: if he missed Church, he would hit him the second time. Burr then took the pistol, bowed to Burke, and measured off ten paces with Church. That Burr would fight with an imperfectly loaded weapon suggests that the mood at Hoboken was hardly homicidal on either side. It also would have been poor advertising for the Manhattan Company if one of its directors had murdered another during its gala opening week.

  The two men raised their pistols and fired simultaneously. Church’s shot clipped a button from Burr’s coat while Burr’s missed Church altogether. As the two seconds stoked the pistols with fresh shot, Church stepped forward and apologized to Burr for his statements. According to Troup, “Church declared he had been indiscreet and was sorry for it.”33 This was not a retraction or outright admission of error, but it indicated that Church knew that he had no definitive proof of the bribery charge. As if eager to terminate the duel, Burr professed satisfaction at this sop. The two men shook hands, ending the duel, and the principals and seconds rowed back to Manhattan in high spirits.

  The Church-Burr duel forms an instructive contrast with the later HamiltonBurr duel. It was hastily arranged and devoid of the often torturous negotiations that attended more serious affairs of honor. It was halted at an early opportunity, with both sides seemingly keen to quit and hurry back to Manhattan. It was Church who proved the expert shot, while Burr did not even wing his opponent, or perhaps did not try to. Most important, the duel did not throb with the uncontainable passion, hatred, and high drama that was to shadow the encounter in Weehawken nearly five years later. One wonders whether Hamilton formed any lasting impressions of Burr based on this duel. If so, they would all have been wrong, for Burr had come off as both a poor shot and a reasonable man, not as a skilled marksman who might arrive at the field of honor prepared to shoot with deadly intent.

  THIRTY-FOUR

  IN AN EVIL HOUR

  The mighty provisional army that Alexander Hamilton was trying to muster was based on a simple premise: that a hostile France, having spurned negotiations with the United States, might embark on war. That premise

  seemed far more questionable during the winter of 1798–1799. The French realized they had blundered in the XYZ Affair and did not wish to antagonize President Adams any further. After John Marshall and Charles Cotesworth Pinckney returned from France, the delegation’s third member, Elbridge Gerry, dawdled in Paris. Like most Republicans, Gerry worried that war with France would drive America into Great Britain’s embrace. Gerry was a notoriously cranky personality. Small, squinteyed, and argumentative, hindered by a stutter in debate, he had a talent for both offending and mystifying people. (He favored two capitals, for instance, with a dazed Congress shuttling between them.) “Poor Gerry always had a wrong kink in his head,” Abigail Adams observed.1 For all his crotchety eccentricity, however, Elbridge Gerry had a warm admirer in John Adams, who felt oppressed by the mounting cost of military preparations and public disquiet over the property taxes enacted to pay for them. So when Gerry told Adams in October 1798 that the
French desired peace, Adams took him seriously.

  Hamilton and his confederates in the Adams cabinet tended to brush aside such tidings as cynical, tactical maneuvers by the French. “Such inveterate prejudice shocked me,” Adams later wrote, though he himself had earlier been skeptical of French overtures. “I said nothing, but was determined I would not be the slave of it. I knew the man [Gerry] infinitely better than all of them.” Adams had no doubt who was leading the campaign to discredit Gerry: “No man had a greater share in propagating and diffusing these prejudices against Mr. Gerry than Hamilton.”2

  In early December 1798, with both Washington and Hamilton present, Adams made a somewhat conciliatory address to Congress, declaring that the French government had “in a qualified manner declared itself willing to receive a minister from the United States for the purpose of restoring a good understanding.”3 Many Federalists were aghast that Adams held out an olive branch to France, while many Republicans still found the president too hawkish. As architect of an army designed to rebuff the French menace, Hamilton was naturally ambivalent about anything that appeared to lessen the danger. He insisted that if the French threat had subsided, it was only because of military efforts undertaken thus far. Hamilton told Harrison Gray Otis that if negotiations did not take place in earnest by August, the president should be given authority to declare war against France. Nonetheless, Adams leaned toward a diplomatic solution, and Secretary of War McHenry apprised Hamilton that in reviewing the new army’s progress with Adams the president “seemed to insinuate the affair need not be hurried.”4 Hamilton saw that sluggishness in organizing the army stemmed from Adams himself and told Washington that “obstacles of a very peculiar kind stand in the way of an efficient and successful management of our military concerns.”5