Aaron Burr, Alexander Hamilton, Bank of Manhattan
Monday, February 18 2013
We met Jim Costanzo, founder & director of the Aaron Burr Society at our lecture series with OurGoods and TradeSchool hosted at the Museum of Arts and Design '(Re)producing Value: Incommensurable Exchange.' He shared some insights with us not only on Aaron Burr and how he established the bank that now hosts our exhibition, but also on how integral he was in advocating for an economic system that was based on social justice. This history not only illuminates some hidden American histories, but sheds some new light on our current economic system.
Be sure to visit our discussion this Saturday Feb. 23 at 4:30 'Alternative Modes of Exchange' that will follow up on the themes presented here, asking how artists and social projects can present new systems of economy outside of traditional systems.
The Manhattan Company and Aaron Burr
by Jim Costanzo
In 1927 the Bank of Manhattan Company built a fourteen-story building with a clock tower in Queens, New York. The building was located close to the Queensboro Bridge Plaza in the rapidly growing outer borough. Its purpose was to feature a bank branch on the ground floor with an office tower on top. The building was constructed during the Roaring Twenties, the area of Prohibition, bootleg whiskey, easy credit that would soon become crushing debt. World War One had just ended, the Stock Market Crash of 1929 was looming with the Great Depression and World War Two just on the horizon.
We’ve all heard comparisons of the ’29 Crash and Great Depression to our Great Recession, just as we all know something, though usually not much about President Franklin Roosevelt’s socialist programs. But the core issues of monetary policy, banking and debt are rarely discussed in ways that most people can understand. This was not always the case, especially during American Revolution where everyone had an opinion about economic and monetary policy as well as taxation. The average farmer from the early Republic knew more about these issues then today’s average American. [#1]
This is one of the reasons How Much Do I Owe You? is interesting, it addresses the fundamental questions about society exchange. The website clearly states that it’s theme questions value; a “personal and conversational exploration into the new iterations of currency, value and exchange at this time of financial flux, growing debt and job insecurity.” These are the questions that are asked during times of financial insecurity and revolution; these were questions that were asked by Aaron Burr when he created the Manhattan Company. Perhaps this is where the Manhattan Company and its founder can enlighten contemporary understanding about the history of America’s political economic.
In 1799 when Aaron Burr founded the Manhattan Company, questions about economic equality were the political battle lines that separated the Federalists and Democratic-Republicans. This was the first great political battle in American history, a struggle that resonates today. It started with the confrontation between Treasury Secretary Alexander Hamilton and Secretary of State Thomas Jefferson. It was a conflict over human rights versus property rights. These issues would not only lead to the Civil War but also brings into question whether or not corporations have the rights of citizens.
Before the opening of the Manhattan Company Burr was a Revolutionary war hero, an attorney and New York Senator. Jefferson asked Burr to be his running mate in the presidential election of 1800. Jefferson knew he needed northern support to win the election and Burr, who finished fourth in 1796 presidential election, was a popular, radical politician from the New York whose political policies embodied Jefferson’s lofty proses. Though an officer in the Revolutionary army, Burr’s political career began when the Daughters and Sons of Liberty, enlisted veterans and the working classes asked him to be their political representative in New York City. Burr was selected to be the champion of the Common People or commoners.
The Democratic-Republican Party of Jefferson and Burr ran against President John Adams and Federalists. But the machiavellian power behind the Federalist presidents was Alexander Hamilton. As the first Treasury Secretary under President Washington, Hamilton instituted a two-tiered economic system that favored the rich at the expense of the shopkeepers, artisans and working classes. Hamilton also bailed out Revolutionary War Bond speculators when the Federal Government guaranteed that it would pay for the State’s debts. These policies lead to more debt and foreclosures for the commoners. Then, to add insult to injury Hamilton created the first national bank, the precursor to the Federal Reserve Bank.
Because of Hamilton’s economic programs, Jefferson resigned in protest as Secretary of State and rightfully accused Hamilton of trying to establish a Wall Street aristocracy. Burr was defeated in his reelection to the US Senate and returned to New York City where he was elected to the state assembly. As an assemblyman and lawyer, Burr would out maneuvered Hamilton and the Federalists in the creation of the Manhattan Company and this would directly impact on the presidential election of 1800.
Burr created the Manhattan Company in 1799 as an eco-enterprise to bring clean water to New York during a series of Yellow Fever epidemics. The success of the company in ending the epidemic was both popular and renowned in the other states. But there was another section in company’s charter that was not originally noticed by Hamilton and Federalist. Instead of using the surplus capital generated by the water works as profits, Burr used the profits to give loans to shopkeeper, artisans and the working classes. Another feature of he Manhattan Company was that their stocks were sold at a low price so that the work classes could buy equity in the company and thereby become shareholders with a voice in how the company operated. This broke the Federalist’s monopoly on banking in New York State and threatened Hamilton’s national bank. Think of how Wall Street is currently reacting to the treat of regulation, Burr’s bank was much more of a threat.
To the followers of Ben Franklin, Thomas Paine and the other radical revolutionaries, Burr’s Manhattan Bank offered The People an opportunity to collectively and democratically determine their economic options. For communities to own their own bank meant was as important as electing their own government officials. Actually in the early colonial period, before the French and Indian War, each settlement had it own currency, an alternative currency in todays parlance, which they controlled. There was no separation between social justice and economic justice.
Burr tied Jefferson for the presidency in the 1800 election. Burr was not only anti-slavery but believed in the equality of races. The fact that Burr tied Jefferson for the presidency scared Jefferson and his cronies James Madison and the rest of the slavery states in the south. Burr had infuriated the bankers and scared the slave owners with visions of American style Haitian slave rebellions.
A few years later Burr would kill Hamilton in a duel, and rightfully so. Hamilton had been paying yellow journalist to print the most scandalous lies about Burr for close to two decades. Then at a drunken dinner party up state Hamilton accused Burr of having an incestuous relationship with his daughter. Unfortunately for Hamilton a local paper printed the story. Burr accused Hamilton of stepping over the line of decency and demanded that Hamilton take back every negative thing he had ever said about him. Both men were retired Colonels and Hamilton who had barely survived other scandals knew that capitulation was not an option if he was to remain in new republic.
Today Burr is the villain of the American Revolution. But after killing Hamilton, Burr returned to Washington to finish his term as Vice President. Because Jefferson still thought of Burr as a threat to the next two slave owning presidents, Madison and Monroe, that he arrested Burr for treason. Jefferson had the Yankee Burr tried in Virginia with member of his family as judge and other members of the legal system but he was acquitted. But this didn’t stop Jefferson from claiming that Burr was still guilty.
Today Burr is the villain of the American Revolution while Jefferson and Hamilton are heroes with their portraits on paper currency. Over time more information has immerged about Jefferson keeping his own children as slaves and selling human being, slaves, to pay for expensive French wine and the books and artifacts that he donated to the Smithsonian Library. And Hamilton is the patron saint of today’s Wall Street gone wild.
Today we have an economic system that only values profit, at the expense of human rights and environment sustainability. The radical economic policies of the Manhattan Company that turned profits into the People’s Equity would be even more radical in today’s repressive economic environment. If Americans are ever to become as Enlightened as their revolutionary founding mothers, fathers and LGBTQ community, then they must realize that there is no social justice without economic justice. And there will never be economic justice without environmental sustainability.
If America wants to look back to the early Republic for inspiration, they would do well to look at Aaron Burr and the Manhattan Company - company created to provide a clean, healthy environment with a business model based on social enterprise business and the common good not merely profit.
-Jim Costanzo, founder & director of the Aaron Burr Society
The author is still Occupying Wall Street working with Strike Debt, Making World and the Commons and Occupy Museums. He teaches graduate and undergraduate art at Pratt Institute in Brooklyn. Read more on the Public Banking Institute's website.