Gotham_ A History of New York City to 1898 - Edwin G. Burrows [287]
When citizens called on the Common Council to revive Colles’s project, however, the authorities demurred, pointing to the expense involved. The populace pressed on, and many inhabitants signed a petition in 1788 requesting the city to begin laying pipes; again the corporation pled financial inability. Then came the epidemics, the 1798 report that called for a fresh water supply, and the launching of a public effort by Philadelphia. Responding to proposals for an aqueduct from the Bronx River, the Common Council now approved a municipal waterworks and drafted a bill for the legislature’s approval, explicitly disavowing a for-profit solution on the grounds that such an enterprise would “not be undertaken by a Company unless upon the Prospect of considerable Gain; and that such Gain must be acquired at the Expense of the Qty.” Aaron Burr, John Murray (president of the Chamber of Commerce), and Peter H. Wendover (president of the Mechanics Society), argued that the aldermen should abandon their plan in favor of a privately operated water company, a position Alexander Hamilton hammered home to the Council in a separate concurring opinion. Within weeks the Federalist-controlled legislature had approved a charter of incorporation drafted by Burr, for the Manhattan Company. The charter empowered the company to build dams, dig wells, divert streams, lay pipes, and do whatever else might be necessary to supply the city with fresh water (which, it was generally assumed, would be tapped from the Bronx River, as per the city’s original plan). A crucial, vaguely worded clause also permitted the company to use its surplus capital for any “monied transactions or operations” consistent with the law—including trade, insurance, and, Burr’s real object, a bank.
Burr and his wealthy backers had long been interested in launching a third bank in the city. The Bank of New York and the local branch of the Bank of the United States (known to all simply as “the Branch Bank”) had done very well since the outbreak of war in Europe, both moving into larger quarters before the end of the decade. Yet their clubby, interlocking directorates and their habit of loaning money only to shareholders had given rise to much discontent in countinghouses around town. There was ample capital for a third bank too, but Burr and his associates, worried that the two existing banks would fight if the legislature tried to create a third, devised the idea of using the water company as a front. No one was really fooled, in any event, and by September 1799 the bank of the Manhattan Company (forerunner of the Chase Manhattan Bank) was up and running. It soon proved extremely profitable.
The waterworks were another story. The Manhattan Company had no intention of tying up its capital in an expensive Bronx River Aqueduct and instead revived the Colles project, sinking new wells at Reade and Centre, right near the anything-but Fresh Water Pond. Although engineers urged iron pipes, the company, keeping the interests of its stockholders uppermost, opted for cheap hollow logs. And despite estimates that New York needed three million gallons a day—for which the city plan had envisioned a reservoir of a million gallons—the company erected on the north side of Chambers Street one that would hold only 132,600 gallons, then, perhaps in compensation for its fundamental inadequacy, grandly decorated its facade with four Doric columns and a statue of Oceanus standing guard. Instead of buying a steam engine, it made do with a horsepowered pump. By mid-1800 it had laid but six miles of pipe, which supplied only four hundred homes with water.