Washington [432]
In early June 1790 the House enacted Hamilton’s funding bill but omitted his contentious plan to assume state debt. Maclay, among others, spied a political agenda lodged deep in the proposal, which would give the federal government a “pretext for seizing every resource of government and subject of taxation in the Union.”6 Madison was enraged that states that had mostly paid their debts—Virginia, Maryland, and Georgia—would subsidize profligate states that had not. Complicating matters was the incipient feud between Hamilton and Jefferson. Now detecting signs of monarchy sprouting everywhere, Jefferson associated a funded debt with the British Empire and, despite his presence in the cabinet, secretly joined forces with Madison against Hamilton. He was chagrined by Hamilton’s decision to reward speculators in government debt, whom he saw as “fraudulent purchasers of this paper . . . filched from the poor and ignorant.”7
The twin debates over assumption and the capital grew so venomous that it seemed the Union might dissolve in acrimony. It was against this backdrop that, on June 19, Jefferson ran into Hamilton before Washington’s residence on Broadway. Usually Hamilton cut a dapper figure, but Jefferson found him strangely transformed by the hubbub surrounding him. “His look was somber, haggard, and dejected . . . Even his dress uncouth and neglected,” Jefferson wrote.8 For half an hour the two men paced before Washington’s door as Hamilton expatiated on the dangerous disunity in Congress, the urgent need for cabinet solidarity, and the malaise threatening the new government. The upshot was that, the next day, Jefferson hosted a dinner for Hamilton and Madison at his lodgings at 57 Maiden Lane. During this famous meal, in an apartment adorned with engravings of Washington, a grand deal was brokered. Jefferson and Madison agreed to aid passage of the assumption bill, while Hamilton promised to lobby the Pennsylvania delegation to endorse Philadelphia as the temporary capital and the Potomac as its final destination. For Hamilton, who favored New York as the capital, it was a bitter pill to swallow, but he viewed the assumption of state debt as the crux of federal power. Only belatedly did Jefferson, a states’ rights advocate, realize his colossal strategic error, grumbling to Washington that he had been royally “duped by Hamilton” and saying that “of all the errors of my political life, this has occasioned me the deepest regret.”9 He believed that Hamilton, to consolidate federal power and promote a northern financial cabal, wanted to make the federal debt so gigantic that it would never be extinguished.
In July Congress approved the Residence Act, naming Philadelphia as the temporary capital for ten years, followed by a permanent move to a ten-mile-square federal district on the Potomac by December 1, 1800. There is no firm evidence that Washington was consulted about the dinner deal hatched by Hamilton, Jefferson, and Madison. Nevertheless everybody knew that he had large landholdings along the river, was involved in its improvement, and would benefit immensely from the decision. In his diary, Maclay fumed that Washington stood behind the dinner deal: “The President of the U.S. has (in my opinion) had great influence in this business.”10 He saw Washington as a tool manipulated by the dexterous Hamilton, saying that “the president has become in the hands of Hamilton the dishclout [dishcloth] of every dirty speculation, as his name goes to wipe away blame and silence all murmuring.”11
The Residence Act had not selected the precise spot on the Potomac for the capital, merely specifying a sixty-five-mile stretch of the river and granting Washington the power to choose the site. He would officially supervise the federal district, appointing and