The Compromise that Created Our Capital

July 15, 2012

July 16th marks the day that paved the way for Washington D.C. to become our capital. It was on that day that President George Washington signed the Residence Act of 1790 which dictated that the capital of the United States of America would be located on the Potomac River between the mouths of the Eastern-Branch and Connogocheque in an area not to exceed ten square miles. In accordance with this act, the seat of government was moved to the new city of Washington on the 1st of December 1800, just ten years after the passage of this act.

The placement of the capital was a contested issue. Some wanted the capital to be in Philadelphia or New York others wanted it to be in the South. Each side fearing the other would become too powerful if the seat of government was in their midst, refused to compromise. Thomas Jefferson, recently returned from France, helped to facilitate a deal between James Madison and Alexander Hamilton.

Hamilton had been hard at work trying to get his assumption bill passed with no success. He wanted the federal government to assume, or take on, all of the debts accrued by the States during the Revolutionary War. Provisions for funding the debt already accumulated by the federal government had passed in much the form Hamilton had suggested, but many objected to his further plan of assumption on the basis that it would only increase the burden of debt that the federal government was already shouldering. In Hamilton’s estimation, the benefits far outweighed the increased debt burden. Two of these benefits included the stabilization of the economy and the creation of a closer bond between the people and the federal government. The stabilization of the economy consisted of many factors including increased creditor confidence and the greater likelihood of a national bank, another of Hamilton’s suggestions. The fact that the federal government would be repaying the debt would tie the interests of the creditors more closely to the federal government. This would help strengthen the federal government, which Hamilton was not convinced was strong enough in the face of the strong state governments of the day.

In addition to the monetary objection, assumption did not sit well with the Southern states who had been more successful than the Northern states in paying down their debt. To the South, the assumption plan seemed to be showing favoritism to the North. A compromise was reached by allowing the capital to be placed in the South. Madison would convince the Virginia congressmen to support the assumption bill if Hamilton would convince the New York congressmen to support the placement of the capital in the South. Both the Residence Act and the Assumption Bill passed by narrow margins within a few weeks of each other.

–Erin Sutter is a senior in the Ashbrook Scholar Program majoring in history and political science at Ashland University.

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