I am continuing with my reading of the hefty history of New York City, and came across something that will seem extremely apposite to my friends in the UK.
By the 1780s ‘contamination of Manhattan’s underground streams had fouled nearly every source of drinking water.’ In 1788 citizens of New York petitioned the Common Council to install pipes to bring fresh water to the city (in 1774 an Irish-born engineer had begun installing thirteen miles of bored pine logs to provide water to the city but the Revolutionary War interrupted the project). The Council claimed that it could not afford to invest in water infrastructure.
Then came some devastating epidemics and the Council changed its mind: it drafted a proposal to form a municipal waterworks, rejecting a for-profit solution on the grounds that water would be supplied ‘at the expense of the City.’ However, Aaron Burr and two other influential citizens argued for a private water company, a proposal supported by Alexander Hamilton, who would later be killed by Burr in a duel at Weehawken, NJ. Burr drafted a charter of incorporation for the company, which authorized it to build dams, dig wells, divert streams, lay pipes, all clearly necessary to supply fresh water – and all things which it would fail signally to do. However, Burr slipped into the charter a ‘crucial vaguely worded clause [that] 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 rich supporters had long wished to form a. bank because the city’s first two banks had made a lot of money and controlled a duopoly.
Burr’s new water company, it turned out, had no intention of tying its capital up in anything as unattractive was water works or, still less, modern technology capable of meeting the public’s needs. The company refused to use modern iron pipes, sticking instead with hollowed-out logs. New York needed an estimated thee million gallons a day, but the company’s reservoir held only 132,600. Instead of investing in steam technology, it opted for a horse-powered pump. In 1803 the company president, De Witt Clinton, became mayor of the city and sent a bill to the Common Council ordering that all city money be held by the bank of the water company. Despite a public outcry about the lack of fresh water, the Council renewed the company’s charter in 1808.
Since the days of Mrs Thatcher, the dogma of the Conservative Party, which has ruled the UK for most of those years, has been that private enterprise is the only way to deliver public services. In the case of water companies, investors bought the companies, sheltered themselves, and the large amounts of cash they extracted, behind elaborate company structures, failed to invest and charged the users for the pleasure. It turns out that companies that pumped human excrement into rivers, streams, lakes and the sea, could be given a rating of ‘excellent’ provided that they met certain other targets set by the regulator. And this rating justified bonuses for company executives. Now most of our waterways are contaminated (not only by water companies, it is true – farming, industrial pollutions and runoff from highways plays their part). Aaron Burr would have been very happy.
Jan and I will be leaving for Mexico on 9 September, returning in mid-October. I’ll send any interesting items I come across in Mexico.