Why Not Philly? Dinner Party Negotiations!

Thomas Jefferson played political matchmaker for Federalist Alexander Hamilton and Republican James Madison over dinner at his New York apartment on June 20, 1790 in order to work out a compromise. Hamilton, the Secretary of the Treasury, wanted a national bank to put the country on solid financial ground. House mover and shaker Madison wanted no part of that, but wanted to establish the federal seat of government along the Potomac river in Virginia. Collegial dinner conversation with an ample supply of wine Jefferson carried back from France three months earlier eased the compromise.

Philadelphia–location where the Declaration of Independence first saw the light of day, where the Continental Congress met, and the Constitution was written. (Remember the Liberty
Bell?) Why didn’t Philly become the offical seat of the federal government in 1790?

Would the steretypes of Philly and DC have flipped if Philadelphia received the nod to become the permanent District of Hershey? Would Philly have become the town of button-down, federal bureaucrats (hard to imagine) and DC an even more rabid sports town, chewing opponents instead of high-priced hot dogs and burgers? Like many serious government decisions involving Congress, everything became very complicated, very quickly. But when it came time to inaugurate George Washington as first president in April 1789, New York served as the temporary capital since 1785. Yet Congress did not plan to make the Big Apple a permanent location–even then the fancy clothes and liberal attitudes put off the more conservative Southerners.

How did Congress decide on the Potomac site, when originally New York’s temporary site was planned to serve them until a more permanent location rose up off the Delaware River near Philadelphia?

Sit tight for the twists and turns. More than 30 cities got into the fray (almost like the bidding competition for Amazon’s second headquarters), including Trenton, NJ, a favorite of Alexander Hamilton if he couldn’t have NYC; Baltimore, MD; Norfolk, VA; Lancaser, VA; and two sites on the Potomac River, including one near Georgetown. (1)

Two sites in Pennsylvania received consideration. Philly lost favored status with Congress after a large group of Pennsylvania militia blocked the entrances to the new Congress in 1783, protesting their lack of back pay for the Revolution. Older members of Congress pushed younger veteran Col. Alexander Hamilton out the door to talk with them. He encouraged the vets to leave, so Congress could focus on resources to help them. They did, but it soured Congress on the City of Brotherly Love.

Time didn’t necessarily solve their problems, but to avoid addressing the prickly Residency problem, Madison engineered legislation to postpone the issue until 1790. This is when we take up the story. Thomas Jefferson knew about the Residency issue, even though he’d just return after a five-year tour as minister to France, just four months earlier.

He knew that President Washington preferred the Potomac location, ostensibly because it would be closer to Mount Vernon, but he would be out of office before the new Capital City was built and ready for action. Washington did not directly enter into the discussion, but he did own land within the area under consideration and became the final decider on the exact location, even insuring that Alexandria, where he had extensive holdings, would be included in the District diamond.

So Washington had a vested interest in the final location, like Secretary of State Thomas Jefferson and House negotiator supreme James Madison, who also owned land along the Potomac. Their Southern plantation-owning neighbors and legislators also wanted to keep the capital far from the abolitionists in the North, fearing the loss of their key workers–free slave labor.

Dinner at Jefferson’s with Hamilton and Madison

In New York Thomas Jefferson was walking on Broadway near the President’s three-story home on June 19, 1790, when he saw Alexander Hamilton, preparing to visit Washington. Usually polished and confident, the thirty-nine year old Secretary of the Treasury looked “somber, haggard and dejected.” He’d taken a serious hit with the initial defeat of a key provision of the “The Funding Act,” his plan to get the nation back on a level fiscal playing field. (2)

In January 1790 Hamilton delivered the First Report on Public Credit, which supported the temporary capital in New York, his home state. But even more he believed it essential for the federal government to assume the debts of the Northern states in order to move the nation forward and be considered a good risk by European trading partners.

His plan would increase the power of the federal government. This did not go down well with the states rights proponents. Southern states were led by the fiesty 5’4″, 140 pound James Madison, whose mind ran circles around other House members. His home state, Virginia, as well as Maryland and Georgia, vehemently opposed “assuming” the Northern debt, particularly since their own debts were nearly paid off.

Jefferson thought maybe an evening of conversation and a few glasses of the wine he’d brought back from his assignment as minister to France would soften both men to consider a compromise. He invited both Hamilton and Madison to dinner on June 20 at his apartment, 57 Maiden Lane in New York City, just three months after he’d moved to the city.

He knew timing would be essential to the success of the negotiations. Jefferson felt the good company would bring Hamilton back to life, though he and Madison were not known to be close friends. They were polar opposites–Madison, like Jefferson, a Republican for limited government, and Hamilton, a Federalist like Washington his former commander during the Revolution, for expanded federal power to build the new united government.

Madison had flip-flopped from Nationalist to the leading foe of greater power for the national government, which confused some of his constituents, forcing him to campaign for his House seat that he’d taken for granted. He became known as “the Big Knife” for cutting “compromise bargains.” (3) He positioned his opposition to Hamilton’s plan so that Virginia might benefit.

Based on Jefferson’s account, which could be self-serving, after a satisfying meal and a few glasses of excellent French wine, Madison came around and agreed to allow the House to consider a Senate amendment for the federal government to assume the Revolutionary War debts of the Northern states. He would not vote for the “assumption” himself. Passage of his measure would be a bitter pill for the Southern states. But Madison exacted one more appeasement for Virginia from Hamilton, who provided a $1.5 million reduction in Virginia’s tax obligations. The total Northern debt came was estimated between $21 and $25 million dollars. (4)

On July 9, 1790. the House of Representatives voted 32-29 in favor of the Residence Bill, which brought the U.S. Capital to the Potomac River site. This ensured that Jefferson’s successful, hard-fought battle in the Electoral College (with John Adams) would land him in DC for his inauturation on March 4, 1801. Then on July 26, the compromise concluded when the Senate passed the Assumption Bill 34-28, making the federal government responsible for the debts from the Revolutionary War. This became Hamilton’s initial step in the establishment of the Bank of America.

When Jefferson stepped onto the podium becoming the third president of America, the population of Washington, D.C. totaled 5,000. Work concluded on the Senate chamber, but the House of Representatives yet to be finished. After the ceremony, Jefferson walked back to a boarding house across from the incomplete Capitol to eat at a communal table, no doubt wishing for an excellent glass of French wine waiting for him in his room.


(1) Ron Chernow, George Washington, (New York: Penguin Press, 2010), p. 629.

(2) Chernow, p. 634

(3) James Roger Sharp, American Politics in Early Republic: The New Nation in Crisis (New York: 1993) p. 36.

(4) Cherniwm p. 637.

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