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The White House in Washington D.C.

On July 16, 1790, President George Washington signed the Residence Act into law, which would eventually make the current location of Washington, D.C., the site of a permanent national American capital. The act was the result of a compromise between Alexander Hamilton and Thomas Jefferson.

Washington was sworn in as the first president of the United States in 1789 in New York City, then the nation's capital city. Since America had declared its independence in 1776, various cities had held the honor, some only briefly. At one time or another Philadelphia, Baltimore, Annapolis and other cities served as the capital. The seat of government had moved around largely due to the fear that the British would conquer the American seat of government.

The end of the Revolutionary War saw Americans agreeing to temporarily house the nation's government in New York City, a city that had withstood British occupation for much of the war. While many prominent New Yorkers, such as Sen. Rufus King, pushed for New York to be the permanent site of the American capital, many wanted a location more centrally located. Chief among them was Jefferson, then secretary of state, who, like Washington, was a Virginian and who believed a site on the Potomac River was preferable, as it sat in the middle of the new nation's North/South divide.

Representatives from the state of Pennsylvania believed that the city of Philadelphia had a natural claim on the honor. After all, the new nation was born in the city's Pennsylvania State House in 1776. The new form of republican government had been created in the same building. Did not Philadelphia's history now demand that it be recognized as the new capital?

As debate raged all over the country about where the new capital should be located, another issue proved even more controversial. During and after the Revolution each state had amassed its own individual debt, in addition to the national debt. By 1790, some states, many of them in the South, had nearly paid down their debts. Other states, many in the North, still had considerable financial burdens.

Hamilton, Washington's secretary of the treasury, envisioned a system of shared national debt as a way to hold the country together in the face of foreign threats and domestic differences. Hamilton, who held considerable influence among his peers, called for the federal government to assume the debt from all the states in January 1790. The plan, known as “assumption,” was lauded by states with heavy financial burdens, but reviled by states who had nearly paid down their debts as unfair.

As Hamilton and his allies attempted to persuade the states to accept the plan, Jefferson saw an opportunity. One day in mid-June, the two men ran into each other on the street in New York and began to complain about the divisions in Congress and the problems with the country. Here, it is possible, began the discussion of a quid pro quo on the capital and assumption issues. Not long after, on June 19, Jefferson invited Hamilton and their colleague James Madison to dinner at his New York dwelling on Maiden Lane.

The two issues were discussed at length. Like most New Yorkers, Hamilton had favored his city as the permanent home of the federal government, but when weighed against the country's money problems and the greater dangers of disunity, he agreed to support Jefferson's plan for a capital on the Potomac. Further, he agreed to use his influence to persuade the Pennsylvanians to agree as well. In exchange, Jefferson would persuade the Southern states to accept assumption.

In the book, “Alexander Hamilton,” biographer Ron Chernow wrote: “The dinner consecrated a deal that was probably already close to achievement. The sad irony was that Hamilton, the quintessential New Yorker, bargained away the city's chance (to) be another London or Paris, the political as well as the financial and cultural capital of the country.”

Hamilton then set out to persuade his fellow New Yorkers, as well as the Pennsylvanians, that the Potomac site would be best for the country. The Residence Act, formally titled “An Act for establishing the temporary and permanent seat of the government of the United States,” was passed by the Senate on July 1, with a vote of 14-12. The House passed the bill on July 9, with a vote of 32-29. The narrowness of each vote highlighted its controversial nature.

On July 16, President Washington signed the bill into law. America's new capital would be located on the Potomac River.

The act somewhat mollified the Pennsylvanians as it made Philadelphia the temporary capital for 10 years. The new site on the Potomac was scheduled to begin its term as the nation's capital on Dec. 1, 1800. In the book, “Washington: A Life,” Chernow wrote:

“The Residence Act had not selected the precise spot on the Potomac for the capital, merely specifying the sixty-five-mile stretch of the river and granting Washington power to choose the site. He would officially supervise the federal district, appointing and overseeing three commissioners charged with surveying and constructing the new city, and he was to exert an incalculable influence on its development.”

Chernow also notes that Washington's selection of the site for the future Washington, D.C., was not without controversy. Many felt that the site's proximity to the president's home at Mount Vernon was no coincidence, and that he was influenced by the prospect of raising his own land's value. John Adams himself later remarked on the appearance of a conflict of interest and Washington's supposed unethical behavior.

In 1800, it was Adams himself, then president, who took up residence in the new federal capital, named for Washington, who had died the previous year. The first session of Congress occurred mid-November of that year, slightly ahead of the schedule laid down by the Residence Act. Jefferson, who served as Adams' vice president before being elected to the presidency himself in 1800, came to believe that he had made a mistake with the compromise he had made with Hamilton.

In the book, “American Sphinx: The Character of Thomas Jefferson,” biographer Joseph J. Ellis wrote “Jefferson had long regretted 'the dinner table bargain' that led to the southern location of the national capital on the banks of the Potomac; he called it the most misguided decision of his entire public career. But he was referring to Hamilton's crafty diplomacy in seducing him to accept federal assumption of the state debts.”

In fact, by the time of Jefferson's presidency the two men were bitter rivals, and Hamilton's success in getting the Southern states to accept assumption continued to grate on the Virginian, even though it had led to the national capital close to the South.

Cody K. Carlson holds a master's in history from the University of Utah and teaches at Salt Lake Community College. An avid player of board games, he blogs at thediscriminatinggamer.com. Email: ckcarlson76@gmail.com