The Capital Bargain

You know how Washington, D.C., got its name, but do you know how it got its location?  Why put it on the East Coast instead of centrally locating it in the middle of the country?  Why choose a mosquito-infested patch of swampland between Virginia and Maryland—which is what our future capital was in the 1790s—instead of New York City, Boston or Philadelphia, which at that time were all thriving metropolises?

The reason is not, as is sometimes supposed,because the future location was near our first president’s Virginia home, Mt. Vernon.  Rather, the city of Washington was the result of a bargain between northern interests, as represented by Secretary of the Treasury Alexander Hamilton, and southern interests, as represented by James Madison, then the leading member of Congress.  The story goes like this:

In 1790, the question of where to finally locate the nation’s capital—New York City being its temporary home—was one of two very contentious issues Congress faced.  The other was whether, as Hamilton had proposed, the federal government should assume all war debts incurred by the 13 states (then colonies) during the American Revolution.  Although Hamilton professed to want the national government to assume these war debts because they were incurred in order to create “one nation,” southerners believed—with good reason—that Hamilton’s real motive was to increase the federal government’s power.  Giving the Treasury Department responsibility for this debt would strengthen and expand its control over all financial matters, and tie it closer to northern moneyed interests, which would hold most of the Treasury notes that serviced the debt. Southerners vehemently opposed this arrangement, which they thought would promote northern industrialism at the expense of their agrarian economies.

So at a dinner arranged by Secretary of State Thomas Jefferson, Hamilton proposed a deal.  He promised Madison, a Virginian and southerner, that in return for southern support of his “debt assumption” scheme, he would support locating the nation’s capital in the South, near Virginia’s northern border.  Southerners like Madison had lobbied vigorously for a southern site, reasoning that the closer one is to the seat of power, the more power one will accrue.  Madison and Jefferson believed that this heightened political power would help their region counterbalance the North’s growing economic power.

Sure enough, both Madison and Hamilton lobbied their allies in Congress and on July 12, 1790, the House and Senate voted to locate the nation’s capital in what is now Washington, D.C., after a 12-year interval in which it would be located in Philadelphia.

As a footnote, this “historic bargain” was momentous in another way.  It would be the last time that Madison and Jefferson, who came to fear the growing power of Hamilton, would ever again work with him for a common goal.