A Friendly Hoodwink

Brian Niedermeier

            Everyone knows that Alexander Hamilton, founding father and Washington's Secretary of the Treasury, was killed in an infamous duel with Aaron Burr, Jefferson's Vice President of the United States, but their history did not start and stop there.  It was a relationship full of bitterness, deceit, and animosity that ran way back to the early days of the Republic. 

            One such example was the Manhatten Company, a bank that Aaron Burr created for personal and professional reasons, both of which were self-serving, to say the least.  First, he was in serious debt, and needed a way to get out.  Second, the Federalist Party, had a strong hold on banking, thanks to Hamilton, and breaking that hold could put Burr in a grand political spotlight with the Republicans. 

            In order to get the Manhatten Company up and running, Burr had to pull out all of the stops when it came to being crafty.  He decided to use a proposed water company as a blind.  In other words, a wolf in sheep's clothing.  He submitted a plan to the state legislature to create a fresh water company that could clean the streets, fight fires, and curb future yellow fever epidemics, one of which had just savaged the country. 

            Burr then recruited some strong support from both sides of the aisle, three Republicans and three Federalists, one of them being Alexander Hamilton.  Hamilton and Burr were getting along at this moment, rare as it was, and Hamilton was in favor of a project that would bring clean water to cities, as well as stave off yellow fever, which he himself had survived during this recent bout. 

            According to Mr. Chernow, Hamilton arranged that the final decision for the bill be sent to the state legislature, and on April 2, 1799, Governor John Jay signed Burr's Manhatten Company into law.  Burr now put the final touches on his scheme.  Knowing that many of the legislators were heading home and were too lazy to read the fine print, Burr added a provision, broadening the financial muscle of his company, and with this loophole, he could now use the Manhatten company as a bank, or a personal ATM.   

            Hamilton was angry when he discovered he had been used, and the water company and its plans were scrapped as soon as Burr got what he wanted.  Also, his Manhatten Company outflanked Hamilton's own Bank of New York.  Burr's company was allowed to raise two million dollars, where Hamilton's could only raise one, and the Bank of New York's charter expired in 1811.  The Manhatten Company didn't have an expiration date. 

            Burr had won, but his actions were so deceitful and appauling that even his fellow republicans wouldn't come near him, and since he had thwarted his good standing with Hamilton, rest assured he would never regain it.

            So their chess game started long before the standoff at Weehawken, New Jersey.

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.