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Compromise After Dinner at Jefferson’s House
On a June evening in 1790, Thomas Jefferson hosted one of the most momentous dinner parties in U.S. history, one that would combine Hamilton’s economic policies with the constitutionally mandated seat of federal authority. More than 15 locations for the new capital city had been suggested, and the vast majority were in Northern states with Philadelphia as the most likely. Virginia’s political, economic, and social elites wanted the new national capital to be near Washington’s Mount Vernon plantation. Washington, Madison, and Jefferson had all imagined the Potomac would become America’s premier commercial artery, and Virginia would have the most significant port in the nation. Virginia’s proximity to a national capital, and a bustling port, would ensure the state was an engine of economic prosperity.
At the June 20, 1790 dinner party, the three men reached a “dinner table bargain.” Hamilton would publicly support putting the capital city near the Potomac in Virginia and Madison would stop blocking his economic policy. TIn July, the House first voted to approve the Potomac location, and then four Representatives from states bordering the Potomac switched their votes and Hamilton's economic plan narrowly passed. A non-obvious compromise combined two unrelated public policies - public debt and the capital’s location - that provided space for political coalitions. This compromise had significant impacts on America’s economic system of slaver-economics. While Hamilton was able to pursue his economic agenda, the nation’s capital would be permanently established on the Potomac. The representatives from Northern states exchanged having the national capital on Southern geography. Although differences over black-skinned slavery had plagued every aspect of the Constitutional Convention, the issue was not mentioned as the Anglo-Saxon Protestants coalesced around a shared vision of a democratic empire that would be fueled by Northern financial and commercial capitalism, and have a national capital in the slave-holding agrarian South.
Part of the compromise was placing the national capital in Philadelphia for ten years and Pennsylvania’s Gradual Emancipation Act of 1780 immediately created problems for federal politicians, such as the new Attorney General, who owned black-skinned slaves. President Washington’s private secretary (George Lear) informed him that “the Attorney General (Edmund Randolph) called upon Mrs Washington today, and informed her that three of his Negroes had given him notice that they should tomorrow take advantage of a law of this State [i.e. the 1780 Gradual Abolition Act], and claim their freedom.” According to the Act, if a black-skinned slave born outside of Pennsylvania resided in Pennsylvania for six months, that black-skinned slave was automatically transformed into a free human being with black skin.
Washington responded that he and Martha may not bring as many black-skinned slaves because “the idea of freedom might be too great a temptation for them to resist. At any rate it might, if they conceived they had a right to it, make them insolent in a state of slavery.” Washington asked for Attorney General Randolph’s analysis on how to evade the law. A few weeks later, Randolph’s answer arrived. According to the Attorney General, “if a slave is brought into the state [of Pennsylvania] and continues therein for the space of six months, he may claim his freedom.” Randolph complained that, among “the society in this city for the abolition of slavery,” there were those who “would use any means to entice [black-skinned slaves] from their masters.” Randolph advised the President to take his black-skinned slaves outside of Pennsylvania “before the expiration of six months.” That is, Pennsylvania law required “an entire six months for them to claim this right,” (i.e. Liberty). If Washington were to take his black-skinned outside of Pennsylvania “but for a single day,” it would create a new legal period “from whence the six months must be dated.” After Randolph’s advice, throughout his presidency in Philadelphia, President Washington had his black-skinned slaves rotate between the nation’s capital and Mt. Vernon every five months to ensure they would never attain Liberty.
After Congress adopted Hamilton’s economic plan, about 50% of the domestic debt was voluntarily exchanged for new federal Treasury debt. Hamilton’s plan contained a new financial mechanism, a “sinking fund,” whose commissioners - the Vice President, Secretaries of State and Treasury, Attorney General, and Chief Justice) - were able to purchase public debt on the open market “below its true value.” Hamilton initiated this to provide investors with confidence that America was committed to paying its debts. However, this institutional arrangement ultimately would eventually lead to America's first economic crisis.