In 1798, Joseph Browne, a doctor from Westchester County, proposed to the Common Council that New York City find a water source beyond Manhattan. Development, he contended, would continue polluting local waters. Knowing the city was financially strapped, he suggested that only a private company could fund the complex project. Browne also happened to be Burr’s brother-in-law.
Manhattan’s State Assembly delegation met to debate “an act for supplying the city of New-York with pure and wholesome water.” Burr argued for a private company to build the infrastructure, while most of his colleagues dissented. So Burr requested and was granted a ten-day leave to assess the city leaders’ preference.
In New York’s water crisis, Burr saw an opportunity. He planned to create the water company himself, and, somehow, use its income to establish a bank to rival Alexander Hamilton’s Bank of New York. And the best part? He’d trick his famous Federalist nemesis, then a lawyer, into helping him.
The Democratic-Republican Burr set up a meeting with Federalist mayor Richard Varick, Hamilton and a group of city merchants. According to records kept by U.S. Senator Philip Schuyler, Burr persuaded them that watering Manhattan—a cause far more important than political quibbles—could only be achieved by private investment. Days later, the Common Council, dominated by Federalists, were convinced by a letter from Hamilton to support Burr's plan.
Burr returned to the State Assembly to report the city’s preference for a private waterworks company. Burr reviewed a draft of the Assembly’s bill with a small committee, and he added a clause that would allow the company to use “surplus capital” for any business purposes beyond the waterworks. This was a completely new freedom for an American company. “In those days, private companies weren’t incorporated by the state legislature,” Koeppel says. “They were always incorporated for a singular purpose—not to do general business.”
No assemblymen contested the clause on record. The waterworks bill passed and moved on to the State Senate, which ratified the law in April 1799. By September, Burr, Browne, and a group of wealthy citizens established the Manhattan Company as both a bank and a waterworks committed, supposedly, to finding a water source outside the city and ending yellow fever.
“Browne proposed the Bronx River, and no sooner do they get incorporated do they abandon this idea,” Koeppel says. The Manhattan Company’s leadership decided the Bronx River—a waterway that divided New York City from the future Bronx borough—was too far away to be profitable. To save money and time, the company built its waterworks near a pond within the city: Collect Pond. Curiously, Browne—the company’s superintendent—no longer publicly contended that the pond was filthy. The company even sought and gained the approval of Colles, who had become a surveyor, for its plan: a steam-powered waterworks with wooden piping, much like his own proposal from the 1770s.
By 1802, the Manhattan Company’s waterworks was running with 21 miles of leaky wooden pipes. According to Diane Galusha’s book Liquid Assets: A History of New York City’s Water System, customers spoke frequently of the water’s undrinkability and unavailability. Tree roots pierced the pipes, and repairs took weeks. The next year, yellow fever killed 600, a number that rose to 1,000 by 1805, when 27,000 fled from a city of 75,000, according to city records cited by Koeppel.