During the Revolution, the American colonies had no one, set capital, nor did they even refer to the city as their capital – referring to it simply as the “meetingplace of Congress.”¹ After being chased between Philadelphia, New York, Trenton, and a few other places, when independence came, Congress hankered for a permanent home. The debate over where exactly they’d set up shop, however, set in motion a series of meetings and backdoor deals know as the Compromise of 1790. 

The New Federal Government Needed a Home

The location of the new nation’s capital proved exceedingly divisive, with factions supporting the north, south, and newly claimed west. Geopolitically, that familiar old of tug of war between the north and south over the interest of northern commerce and industry versus southern, slave-based agriculture dominated many discussions.

While this distinction between north and south continued to shape American politics for generations, as American citizens ventured west over the Appalachians the interests of the western United States became more important by the day. With territories such as Tennessee, Kentucky, and Ohio close to gaining statehood after the British ceded all their lands east of the Mississippi and south of Canada to the Americans in the Treaty of Paris, how to get people and goods to and from these territories became an important issue in the debate over where to place the capital. 

Another focal point of debate was the economic boost the chosen city would receive by virtue of being the center of a nation’s political life. In 1783, a band of congressmen put the value of the capital on local economy at $100,000 to $150,000 (the equivalent of several million dollars today). In 1788, another group of economically interested individuals raised the total to $250,000.²

Wars have been fought for a lot less. 

Cities Stake Their Claim for the Capital City

When the word got out that Congress was debating where to establish the new federal capital, no shortage of cities and towns put their hat into the ring. Between 1782 and 1791, 47 sites were proposed across Virginia, Maryland, Delaware, New Jersey, New York, and Pennsylvania.³

Despite this enormous number of candidates, there was seemingly one criterion that Congress could agree on: the capital should be on or close to a river of bay, so it could effectively trade with the growing western territories. From the big players, like New York City, Philadelphia, and Baltimore, to smaller towns like Kingston, NY, Havre de Grade, MD, and Middletown, PA, all were located on a river or bay – save little Carlisle, Pennsylvania.⁴

As the debate wore on, the viable candidates began to stand out. The northern factions aligned themselves with New York City, Philadelphia, or a site along the Susquehanna in Pennsylvania. Many southerners hoped for a capital along the Potomac River. And due it’s thriving economy, Baltimore emerged as the rogue wildcard – drawing support from mid-Atlantic and Southern states believing it was the best mid-way point to represent their interests. As William Maclay, a senator from Pennsylvania and supporter of Philadelphia the ‘residence of Congress’ noted in his journal, some believed “the North Carolina men would vote for Baltimore.”⁵

Poor Baltimore didn’t last long, however. Just four days after noting Baltimore’s potential to attract southern votes, Maclay described the city’s downfall on the congressional floor. 

“Now the Baltimore vote was read. Carrol and Lee moved to postpone it. It was postponed. Carrol now moved to read some representations from Baltimore and Georgetown. This was complied with. Carrol surprised me by taking me out and requesting me to move the insertion of Baltimore for the permanent residence. Said he wished it to be put and negatived. This had a crooked aspect. I declined it. Izard, however, moved this very thing, and Walker told me it was expected that he would do it. I called for the amendment proposed on Friday, but Carrol got up and wished the vote on Baltimore. It was negatived.”⁶

The politicking and ‘crooked aspects’ of governing had come to America’s virtuous republic. Just wait till we get to the Compromise of 1790.

Jefferson, Hamilton, Madison, and the Compromise of 1790

During all this hubbub in 1789, Congress and President Washington sat in New York City. The fact that Congress found itself in New York gave some hope that the city nestled on the banks of Manhattan would remain the permanent center of American political life. Proponents of Philadelphia pushed historical precedent and Philadelphia’s status as America’s largest, most affluent city.

Potomac supporters felt it was the only way to preserve both northern and southern interests while having a water route to the western territories. It also didn’t hurt that George Washington himself secretly wanted the Potomac River to become the site of the permanent capital. 

Congress debated the question throughout 1789, and to no avail. Tensions rode so high, in fact, that James Madison thought of adjuring Congress.⁷ The year 1790, however, would see the issue resolved, thanks in large part to the Secretary of the Treasury, Alexander Hamilton, and a triumvirate of influential Virginians. 

Alexander Hamilton and the Federal Assumption of War Debts

As other powerful men bickered over the site of the new capital, Alexander Hamilton pushed for economic reform. Working as Washington’s Secretary of the Treasury, Alexander Hamilton and his “junto,” as Maclay called them, did “business on the principles of economy.”⁸

Hamilton argued that the strength of the new country and even newer federal government lay in assuming the debts accrued by the various states during the Revolutionary War. To his mind, this federal assumption of war debts would help the national government establish and grow its credit, something necessary to compete economically with the powers of Europe.

Northerners loved him for this, having racked up quite the tab. Southerners, though, had already paid off large portions of their debts and didn’t want to be saddled with the north’s burdens. Enter the Virginians. 

Thomas Jefferson, James Madison, and the Power of Virginia

Though Thomas Jefferson and Washington were not Congressmen, they exerted heavy influence over that body (especially Washington). “It is, in fact, the interest of the President of the United States that pushes the Potomac,” Maclay wrote, “He [Washington], by means of Jefferson, Madison, Carrol, and others, urged the business…”⁹

Washington’s large Mount Vernon estate bordered the Potomac River – and he wanted the new national capital in his backyard. Desirous to remain behind the scenes, however, he acted through Thomas Jefferson, James Madison, and others.

A master at playing the political game, James Madison did the leg work in Congress of gathering support for the Potomac plan. Jefferson took the lead on winning over Hamilton and his “New York junto.” 

“I proposed to him [Alexander Hamilton],… to dine with me,” Jefferson recorded, “and I would invite another friend or two, bring them into conference together… to form a compromise which was to save the union.”¹⁰

At that dinner, the Compromise of 1790 took place. It was decided that the southern states would vote for the national government to assume all state debts and, in return, the permanent capital of the United States would be placed on the Potomac. And, as this new city would have to be built from scratch, Philadelphia would remain the temporary residence of Congress for 10 years. “So two of the Potomac members (White & Lee, but White with a revulsion of stomach almost convulsive) agreed to change their votes,” Jefferson wrote, “& Hamilton undertook to carry the other point.”¹¹

The Residence Act

Following the Compromise of 1790, Washington, the demigod of the Potomac, was awarded the decision of where exactly to place the new city. And, surprise surprise, the new capital city ended up in his backyard.

That same year, Washington signed the Residence Act into law. Under this act, the land on which to build the ‘District’ was taken from both Maryland and Virginia. According to Residence Act:

“On the said first Monday in December, in the year on thousand eight hundred, the seat of the government of the United States, shall, by virtue of this act, be transferred to the district…”

Though Washington would never serve as president in the city that now bears his name, he hired the city’s

Sources on the Compromise of 1790

1. Kenneth R. Bowling, The Creation of Washington, D.C.: The Idea and Location of the American Capital (Fairfax, VA: George Mason University Press, 1991), 5.
2. Bowling, The Creation of Washington, D.C., 3.
3. Bowling, The Creation of Washington D.C., ‘Site Proposed for the Capital, 1782-1791.’
4. Ibid
5. William Maclay, “Journal of William Maclay, United States Senator from Pennsylvania, 1789-1791, Chapter X: On the Resident of Congress,” accessed via memory.loc.gov: 305.
6. Maclay, “Journal of William Maclay,” 309.
7. Bowling, The Creation of Washington, D.C., 181.
8. Maclay, “Journal of William Maclay,” 310.
9. Maclay, “Journal of William Maclay,” 312.
10. Thomas Jefferson, “Thomas Jefferson Papers, 1606 to 1827,” accessed via loc.gov.
11. Ibid.