Why is this interesting? - The Aaron Burr Edition
On water, pipes, and the surprising history behind one of the world's biggest banks
|Guest Contributor||Sep 4, 2020||9|
John Jansen (JJ) spent thirty-six years in fixed income trading and selling. He’s an avid reader of US history, having read bios of every US president from Washington to Nixon. You can follow him at @acrossthecurve
John here. In July, a filmed version of the stage production of Hamilton premiered on Disney+ to rave reviews, boosting downloads of the Disney+ app by more than 750,000 over the July 4th weekend. Thanks to the stratospheric popularity of the show, even the most history-phobic among us now know of Alexander Hamilton’s role in “centralizing national credit” as the nation’s first Treasury secretary. However, very few people (outside of the New York Historical Society, where I am a member), know that Hamilton’s rival, Aaron Burr, left a legacy in banking that is more ubiquitous than Hamilton’s.
The Chase Bank logo—an open square outlined within a blue octagon—is one of the world’s most recognizable symbols. You know it well, and you may even have one in your wallet on a credit card. The mark, designed in the early 1960s by the seminal duo of Ivan Chermayeff and Tom Geismar, is one of the few logos left standing from that era, a nod to its iconic nature and abstract representation. But how abstract? The widely told story is that the mark’s hollow center represents a water pipe: an homage to a stealth provision within a contract written by Aaron Burr, with assistance from his frenemy Alexander Hamilton.
Why is this interesting?
In the late 1790s, following the new US Constitution’s adoption, New York City was enjoying a period of commercial growth and expanding population. These increases didn’t come without a price, however, and one of the most vexing problems the city faced was the lack of clean water.
Aaron Burr observed the need for a healthy water supply and devised a plan to employ the local demand for water into a vehicle he could use to enrich himself.
Burr needed the NYC Common Council, as well as the New York State Legislature, to approve the plan and commissioned a bipartisan group that included Hamilton to lobby for a private water company. He proposed the creation of a private company—the Manhattan Company—that would provide clean water for street cleaning and firefighting as well as the infrastructure for the project by laying pipes.
Burr’s Manhattan Company ultimately won approval from the state Legislature for incorporation (without Hamilton’s aid, this would not have happened). However, Burr’s plan was an artifice and a ruse, as he had no real intention of conducting business as a water company: what he really wanted to do was start a bank, as his rival Hamilton had done, founding the Bank of New York in 1784. Hence, just before his Manhattan Company was approved for incorporation, Burr inserted a clause in the bill giving his company sweeping powers to use surplus capital to function as a bank.
At that time, there were two major banks in NYC, and each was dominated by the Federalist Party, which irked Burr (now a Democratic-Republican). In addition, Burr’s nemesis, Hamilton, was responsible for both banks: the Bank of New York, which he founded as a private citizen, and the Bank of the United States, which he established as George Washington’s Treasury Secretary.
Fast forward to the present and the Bank of the United States has ceased to exist for two centuries, and the Bank of New York, which would later become the Bank of New York Mellon, operates within an important but very narrow niche of the financial markets. (In a bit of history coming full circle, JPMorgan Chase bought the retail business of Bank of New York in 2006.) Meanwhile, after Burr’s Manhattan Company achieved incorporation, it quickly began to engage in the banking business and operated under that name until it merged with Chase Bank in the early 1950s. After a series of subsequent mergers, beginning in the early 1980s and culminating with the union of the JPMorgan and Chase banks, JPMorgan Chase became the largest bank in the United States.
Coming back to the logo, despite the mythology that exists around it, that square does not actually represent what many believe it does. The Chermayeff & Geismar & Haviv site explains that “The blue octagonal mark is abstract but not without meaning. It was inspired by a traditional Chinese coin, and, with the square enclosed in an octagon, it suggests a bank vault—and by extension, the notion of security and trust. The 45-degree angles give the mark motion and dynamism, even a hint of three-dimensionality, yet it remains quite simple.”
The story is so prevalent that Ivan Chermayeff, one of the mark’s designers, got in touch with the New York Times in 2007 to issue a correction on a story suggesting a connection between the logo and Burr’s pipes. When we reached out to Chermayeff’s partner Tom Geismar, the other designer for the project, he confirmed that the story is bogus, explaining over email that “The idea never crossed my mind when designing the symbol. Moreover, the idea that those water pipes were pieced together from boards is also wrong.”
So the next time you see that blue octagonal logo on the credit card in your wallet, remember that it’s Aaron Burr, not the man who centralized national credit, who’s responsible. (JJ)
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Thanks for reading,
Noah (NRB) & Colin (CJN) & John (JJ)
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