The watercourse that fed the Sunfish Pond along 32nd Street and then flowed on to the East River along the route of 34th Street was one of the most prominent features of the area until the 19th century. The stream's outlet to the East River was a cove called Kip's Bay, after an early Dutch landowner whose farm had been just south of the stream; Murray Hill, today's name for the neighborhood, came from the estate of Robert Murray, whose house was built on a hill at Park Avenue and 36th Street, overlooking Sunfish Pond. (For more, see Barry Popik's excellent site.)
Many revolutionary war battles could be pointed to as pivotal moments in the formation of the young United States, but Kips Bay played host to a particularly memorable moment of the war. British troops had been massing on the shore of Queens, preparing a multitude of boats to bring about 4,000 troops across the East River for what would later be called "The Battle of Manhattan." Crossing the river and borne southward on the tide, they mostly landed around the Kips Bay area, where they promptly routed the Americans, who fled to northern Manhattan-- to the consternation of George Washington, who is said to have thrown his hat to the ground in a fit of impotent anger at the flight. (In their defense, the American milita were vastly outnumbered.
A 1931 article (found here) eulogizing the old 34th Street location of the Waldorf Astoria hotel gave a more poetic account of the battle, and of Mrs. Murray's apocryphal role:
Rich in historical associations was this farmland site of the Waldorf. Once a lively battle of the Revolutionary War took place there. In fact, Historian Albert Ullman claims that America came near to losing the Revolution within the Thirty-fourth Street district of Manhattan. That was when the British succeeded in landing their army at Kips Bay Farm, at the foot of Thirty-fourth Street on September 15, 1776, after the disastrous battle of Long Island.
It was at this time that stray shots began to fall in the present Fifth Avenue in what became known as the "battle of the cornfield." Washington had rushed down from his headquarters in the Jumel mansion, which still stands in 160th Street. He took up his position on a knoll about where the New York Public Library stands today. His army was in rout, running toward him. There was every indication the British would break through, cross the Sunfish Creek and trap 3,500 troops still in the city at the tip of Manhattan Island. In the letters of his aide-de-camp it is told how Washington "laid his cane over many of the officers who shewed their men the example of running.,.
Reinforced with more troops a rally was staged and General Putnam was sent down Sunfish Creek and Bloomingdale Road to rescue and direct the 3,500 men out of the city. The battle was fought on the famous Murray Farm, from which Murray Hill was named.
In the Murray house, which stood in the bed of Park Avenue at Thirty-seventh Street, Mrs. Murray "saved the army." Deliberately she dined and wined the red-coated British officers so well that Putnam was able to slip past the Waldorf block with his army and join Washington in the retirement to Harlem Heights.
Sunfish Creek seems to have completely disappeared, in terms of any recognizible remnants, although I'd still like to find the route that drains the springs that were part of its sources. One spring seems to have been essentially in the middle of Times Square-- very close to 46th Street and 7th Avenue.
Below is a section of Viele's water map showing the stream. I have never run accross any name for the second stream, further north, that also outlets into Kip's bay.
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