Brian Phillips Murphy

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Brian Phillips Murphy | "A very convenient instrument": The Manhattan Company, Aaron Burr, and the Election of 1800 | The William and Mary Quarterly, 65.2 | The History Cooperative

"A very convenient instrument": The Manhattan Company, Aaron Burr, and the Election of 1800

ON the eve of one of the first and most important ballot contests that would ultimately decide the 1800 presidential election, a scion of New York's foremost Republican family reached for a quill as he sought to soothe the anxieties of the faraway Virginian who hoped to be the victor. "A very important change has been effected," Edward Livingston informed Thomas Jefferson, "by the instrumentality as Mr. Hamilton would call it of the New Bank." Operated by the Manhattan Company, this new bank had "emancipated hundreds who were held in bondage by the old institutions": the Bank of New York and the New York branch of the Bank of the United States. Voters, Livingston predicted, "all know and understand the principles of their deliverers—Burr is ... zealous and will be active in his Exertions—on the whole I think every thing promises a favorable issue to our labors." Six years after the election of 1800, Republican pamphleteer James Cheetham pronounced that "Federalism retained its dominion until the establishment of the Manhattan Company: after that event its empire became dissolved."¹ That dissolution began with the shower of paper that Republicans rained on New York City: the stocks, notes, and charter. In the minds of men like Cheetham, there would be no revolution of 1800 without the Manhattan Company.	1
Incorporated by the state as a water company in early 1799, the Manhattan Company was intended to be the curative to yellow fever epidemics that stalked summer's arrival. But as he shepherded the New York City Common Council's petition through the state legislature, Aaron Burr, then an assemblyman from the city, quietly amended the charter. He enlarged its capitalization and board of directors, populating the latter with Republicans, and inserted a clause to permit the company to use surplus capital with broad latitude. Weeks later Burr and his allies on the board of the new Manhattan Company decided to use those funds to open an office of discount and deposit, otherwise known as a bank. The new Bank of the Manhattan Company, the first to open in the city since 1792, began offering credit to merchants and tradesmen; many recipients were Republicans.	2
Initially, the move was a liability for Burr and his partisans. Federalists retaliated with accusations of legislative fraud and trickery, and the established banks restricted access to credit. Yet within a year, fortunes reversed as the Manhattan Company became the mechanism by which Republicans captured the New York legislature in 1800 and appointed a Republican slate of presidential electors. To Federalists and Republicans alike, Jefferson's election—the revolution of 1800—had been financed by a reservoir of Manhattan Company cash.	3
This story of the Manhattan Company is better known than understood. Burr's guiding hand in the affair is congruent with contemporaries' and historians' perceptions of him as a self-serving, if clever, political lothario. How else, it has been asked, could he have founded a Republican bank except by swindling Federalists? But narrowly examining Burr's role makes the company captive to the shifting ad hoc alliances that defined his career and makes the bank little more than a raft keeping his finances afloat. Similarly, many banking histories overlook the innovativeness of the Manhattan Company by presuming partisanship among New York bankers throughout the 1790s. One need only consult New York newspapers to reach the same conclusion: when Federalists challenged the legitimacy of a Republican bank, company allies highlighted the near decade of Federalist coercion under the city's two older banks. These exchanges left the impression that banking had always been blatantly partisan and exclusively Federalist, an interpretation that ripples through the historiography.²	. . .

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