Theme 2: Module 2:

Early Republic MED Context and Strategies

The Formative Years of the Early Republic (1790-1870)

Population Migration, City-Building, Cultural Diffusion: the Early Republic Big City Paradigm

Those who have read Theme 1 modules understand the 19th century Early Republic and Gilded Ages especially were the periods in which the foundations of American MED were laid. Population migration, diffusion of political cultures, city-building and (in forthcoming modules) the centrality of industrial manufacturing and infrastructure were MED’s core strategy nexus or paradigm. The first three are the subject matter of this module.

That all this is largely a post-1800 phenomenon is probably surprising to many readers–our history textbooks smush all of this into a description only faintly reminiscent of what transpired. In this brief module, I try to demonstrate how the these ED drivers (population migration, cultural diffusion, city-building strategies jelled into a Big City MED paradigm from which Big City MED evolved. My plan of attack is to first describe city-building. America’s first major city-building effort, was Washington D.C., part of a comprehensive developmental infrastructure strategy, was advocated and achieved by now President George Washington, our self-declared first economic developer. This module in part describes what was Washington’s signature project as an economic developer, and to ignore timelines and cut across themes/topics to describe this project, almost literally to Washington’s deathbed. We will return to both timelines and topic areas in the next module.

In presenting our case study of Washington D.C., I am frankly more concerned with city-building as a strategy and process than with extended discussion on the “building of a national capital. We have already described the “why” behind its location; while not without its potential economic meaning to Washington himself, that decision was primarily political.  To be sure one cannot ignore the fact that the city in question was intended, in its way, to contend, it not compete with places like London and Paris–but also to compete with places like Philadelphia and New York City as leaders in an emerging American urban hierarchy. One cannot ignore DC’s function of unifying the nation–in fact that accounted for why D.C. existed at all. National capitals have certain prerequisites of which its famous grand boulevards and Greek-style hallmark buildings are only two. But I have other purposes in this module.  First, I want to describe city-building as an economic development strategy, and as a process extended over time, institutions/EDOs, and people, which inevitably encompasses other ED strategies to accomplish its purposes. Also, Washington D.C. was a singular exception, a national-level economic development strategy, and it will deviate in important ways for the more private, or semi state-level city-building described in our future modules.. Surprisingly, under Washington’s fairly direct supervision, he was after all President, it is much more private, congruent with the state-level city-building than one might imagine. We are particularly interested in how the President’s DTIS strategy fared in the near-decade he personally led this project. We will ignore timelines and follow that theme to his successor, Thomas Jefferson and see how the latter’s image of Washington D.C. prevailed over the former.

City-building, the ED strategy that produced “urbanization” was logically an Early Republic MED strategy–indeed it still is fairly common in our Contemporary Era. City-building required entrepreneurs, private financing, and public infrastructure. 1790 Census data reported 24 cities/towns whose population exceeded 2,500 (an aggregate of 200,000 population). By 1870 there were 683 cities/towns above 2,500 (aggregate 9.9 million), and by 1890, 1351 with 22.1 million residents.  There was an awfully lot of city-building going on in the 19th century. A century later, 1990, there were 8500 towns and cities greater than 2500—187 million[vi]  City-building, the most primeval and arguably the centerpiece of MED strategies, is the most unappreciated, yet is the most fundamental in understanding the behavior of its core institutions, political culture and future political life.

Washington as Economic Developer

I think his hair looks like Trump’s

In this module, a brief presentation of President George Washington’s role as an active federal-level economic developer describes his impressive personally-led city-building of Washington DC. Washington, despite his “heavy” rather boring, face on a pedestal current image, was an interesting character. His was a pre-industrial age; the American national economy was agricultural, with an associated trade/export and finance agglomeration. The Mount Vernon plantation was by today’s criteria, an example of a private EDO in that economic system.

But in this module we do not write about the plantation. In my view that was secondary to his real day job: a major financial investor who opened up the (Midwestern) wilderness for settlement and city-building. In that role (especially when, as described in As Two Ships, combined with his profound interest in early canal-building) Washington was a transition figure in the opening up of the “Wilderness”–from Pittsburgh and Shenandoah Valley to Ohio and eastern banks of the Mississippi River. The closest he came to being an agent of early American industrialization, however, was his leadership/support of Alexander Hamilton–but that is another story altogether.

A page from Washington’s Code book listing his agents

Pre-President Washington had been a colonial economic developer, as well as planter and general. In the first role he falls off his pedestal, and in return a bit of his personality is revealed. Washington, like Trump, was a real estate speculator. He owned land from Virginia, to Pittsburgh into the Ohio Valley, into New York, as well as parcels around today’s Washington D.C. He owned extensively in West Virginia and Kentucky. At his death, it is claimed that he was America’s richest man (his estate, not including Mount Vernon, was valued by Washington around $780,000 in 1798 dollars—Mount Vernon plus stocks and bonds, not including slaves, added about a half million more).

I’ll leave it mathematicians to figure what that comes to in 2018 dollars [v]. In any case, the bulk of his fortune derived from real estate in mostly unsettled (by Europeans) geographies. He captured the nation’s richest man title when his compatriot Robert Morris, another major real estate speculator, went bankrupt and sold his land to Dutch investors who formed the Holland Land Company (it was composed of most of Upstate New York, stretching to Rochester-Buffalo [vi]). Washington on the other hand obviously prospered–speaking volumes about his real estate prowess.

Fort Pitt 1759

He was a Mason. Masons served as his network/Rolodex /following for clients, investors, and property management. At the time commentators claimed he owned at least 100,000 acres directly, and 15 million indirectly through his investor-subsidiaries [v]. His first known purchase was in 1750 (450 acres in western Virginia). He bought 15,000 acres around Fort Pitt (downtown Pittsburgh, Point State Park) and acquired land bounties to amass nearly 40,000 acres. He continued to invest heavily throughout his lifetime, and invested aggressively in canal-building as well. If you are still in the mood another Washington ED tale [xi]

His “Art of the Deal” apparently consisted of three principles:  buy (or claim as bounty for public service) as much good land as possible, trade poor land for better land whenever possible, and never sell for cash”.[v] He preferred renting the land which tenants would improve by their labor. He speculated on land across Virginia’s Blue Ridge Mountains, into Ohio and Kentucky. This was risky under the best of circumstances; Indians still dominated most of it during his lifetime. It adds, however, for those who know their history, another dimension to Mad Anthony Wayne and Fallen Timbers. Indeed, Washington’s curious and complex relationship with Native Americans is important to understanding early American S&L ED [xx]. His Secretary of War (Henry Knox), for example, laid the foundation and approved the “sovereign nation–reservation” system (for want of a better word). [See footnote iv below}

Gordon Woods cites a letter in which 1795 President Washington wrote: “If I do not sell my lands on the Ohio and the great Kanawha (West Virginia) in a lump—or at least by whole tracts they will not be sold at all by me. These will sell for fifty percent more at this time than I would have sold them for two years ago”[v]. Hmm … Sounds like we need a special prosecutor.

Washington DC– As President, Washington was determined to build a new nation’s capital–to replace New York City and Philadelphia. This was not America’s first city-building by any means, but it was the first actually done by a sitting President. Also the methods, and the design (Pierre L’Enfant) became a viable model for other early city-builders in the Mid-Atlantic and Ohio. The story in the next paragraphs outlines Washington’s role as Washington D.C.’s first city-builder and transition figure of American ED.

George Washington the Midwife of Washington D.C.

If the reader has no stomach for conflict of interest in politics, than better skip this section. If the reader wants to think of George Washington cast in pure marble on a pedestal, throwing his dollar over the Potomac, and never “telling a lie” this is not for you. If there was any doubt Washington saw the capital, and its location as a furtherance of his Patowmack Canal project–and his vision of national defense and hinterland settlement–and his desire for personal wealth, than this section should answer any doubts. Did Washington have larger “preserve the Union” motivations? Yes, I believe he sincerely did–but they all were smushed into a mental blender that, given the period’s ill-defined conflict of interest values, its blending of private and public in ways we no longer can even understand, never mind tolerate, allowed Washington to dominate the city-building of the national capital.

Congress in the Residency Act entrusted the project, its basic decisions, and its implementation–development to George Washington, the President. That Act established a “federal district”, and created a government commission (agency) to operate the project–empowering George Washington to appoint, not nominate, its membership. Washington quickly appointed(1) the administrator of his personal business affairs/personal doctor and husband of Martha’s daughter; (2) a former Maryland Governor who had nominated Washington to the position of commander-in-chief of the Continental Army back in 1775; and (3) The district’s former Congressman, who had switched his vote on the key Assumption of Debt legislation in favor of Hamilton, Montgomery County’s largest slave-owner, and who personally owned 4000 acres within the announced site. It was Washington’s intention these fine and dispassionate folk would carry out the day-to-day decision-making of the federal commission–with himself as Chair. Yes, as described in an earlier module, Washington personally owned land within the district as well[v]. Oh, and did I mention that all three commissioners were members on the Patowmack Canal Corporation, and that the last member described was its formal CEO, and President of the Corporation [99] Fergus M. Bordewich, the Making of the American Capital (Amistad/HarperCollins Publishers, 2008), p. 63.?

The Residency Act set very broad geographic parameters–extending deep into today’s West Virginia–for the specific location of the city, which was to be determined by none other than George Washington “hisself”.  After a long trip into the federal district hinterland Washington specified the site (January 24, 1791) as being from the village of Georgetown (Washington’s hoped for manufacturing base) to the east bank of the Anacostia River–exactly where he wanted it in accordance with his Patowmack Canal long-term plan. There was one problem with the specific site, however. The original Residency Act did not cross over the Potomac, and so it excluded the “other bank” which included the key port city of Alexandria (for those who are aware Alexandria is today an independent city in the state of Virginia, it became so only in 1861 when it joined Virginia in seceding from the Union-in the meantime it and the lands leading to it were part of Washington D.C.). Also included besides the city of 3,200 was 1,200 additional acres owned by Washington, 950 acres owned by John Parke-Custis (Washington’s step-son) and future Arlington Cemetery, as well as several developable lots in Alexandria proper owned by Washington. BTW none of this was a secret–it was well known to Congress [99] Fergus M. Bordewich, the Making of the American Capital, p. 64 .

Accordingly, an amendment to the Residency Act was filed in mid-February by Charles Carroll, former Maryland Governor and owner of huge tracts of Potomac River land–in the middle of Hamilton’s national bank debate. The amendment got caught up in the politics of that bill, and for awhile it was uncertain, that if the President voted for the national bank whether or not a revenge motion would not only defeat the amendment, but repudiate the Residency Act as well[vii]. . This may, or may not, have entered into Washington’s soon to be told “Ten Days That Shook Economic Development” in a future module. As will be told in our next set of modules, Hamilton got his bank, and Washington got his amendment. In later years, after Washington died, none other than our second president, John Adams, commented the amendment raised the value of the acquired properties by 1000%. [99] Fergus M. Bordewich, the Making of the American Capital, p. 65 . Just saying …

With Congressional approvals in hand, a government EDO at his service, with surveying complete by Andrew Ellicott, and the architect (Pierre L’Enfant} hired (in January). Washington then appeared in person on site (March 28 1791). Washington, little experienced with design and the aesthetics of city-building assigned the review of L”Enfant’s sketches and designs to Thomas Jefferson, his none-too-happy Secretary of State. Jefferson on his own dime, in Philadelphia, had prepared his own image of the new capital;’s design: a “federal village” of just twenty blocks (Foggy Bottom) intended to be austere “a farmer’s capital that shunned the pretensions of Europe, with a simple grid [99] Fergus M. Bordewich, the Making of the American Capital, p. 73. This did not square with L’Enfant’s vision, image and elegant designs and broad radial boulevards extending great lengths into the district. Washington on site was briefed by L’Enfant and given the hard-core press, and he largely concurred. This, however, was not known to existing landowners, who thought more or less along Jefferson’s thoughts. His own handpicked government commission was divided, and skeptical. L’Enfant, to complicate matters, could brook no compromise or incorporate other perspectives, it was his highway or nothing. In effect the architect plans did not square with the commission’s budget or Congressional authorization, and the costs of lots, once acquired, would have to sell at prices that grossly exceeded the prevailing price. Someone was heading for a bruising.

to negotiate directly with the eighteen landowners within the district. He struck a deal with seventeen of them, leaving one outstanding—a problem, in that the outstanding land was where the present day White House is located. Owned by a curmudgeon Scotsman, David Burns, Washington negotiated with him (actually shamed him with patriotism and his position as President): “The pain which this occurrence [the disagreement] occasions me is the more palpably felt, as I had taken pleasure during my journey [to D.C.] through several states, to relate this agreement, and to speak of it, on every proper occasion[99] Fergus M. Bordewich, the Making of the American Capital, p. 55 eventually gave way to see the President’s logic–and price. Burns held out for several months, and finally agreed with the proviso that only a public building would be built on the site (the White House sits on that site today).

L’Enfant’s Plan

The negotiated “deal” was that the owners would “pool” the individual titles into one aggregate title which the federal government would purchase at a fixed price of $25 per acre. The federal government would use only half the acreage for public buildings, public squares and roads. The other half (potentially improved by infrastructure and development) would be returned to the original landowners at no cost—a sweetheart deal by anyone’s estimation. With the exception of Burns, Washington secured their agreement in one day and evening [vii] also .[99] Fergus M. Bordewich, the Making of the American Capital, p. 75. Over 10,000 lots , miles of street at no cost had been acquired for $36,099.  Washington’s intent, however, was to sell portions of the public area to private owners, hopefully minimizing land speculation and fostering local, non-absentee-ownership. Talk about the “art of a deal”.

A public auction (October 17, 1791) was scheduled to sell the first  lots. Washington, Jefferson and Madison had to unexpectedly leave just before bids were heard in order to get to the opening of Congress in Philadelphia. The land did not sell very well. The auction, scheduled to last for three days, ended the first afternoon. Only 1% of the expected sales, about 30 lots, were actually sold. L’Enfant got the blame–for several concerns on his activities thus far, but the most outrageous deficiency was that he  he had not even provided a map on which the lots were drawn and visible by the time of the auction. When he soon found out, Washington was more than mad, complaining how could anyone ” be induced to buy … a pig in a poke”[99] Fergus M. Bordewich, the Making of the American Capital, p. 85 .

Ironically, today L’Enfant’s grand plan and design is heralded as a icon on planning and design–over time the city would be built along most of its basic outlines. But in 1791 it was hopelessly out of style with both the mechanics and financing of American real estate, and the visual images, wide expanses, and grand flourishes of his plan were not only too expensive for a Republic literally in near-bankruptcy and just commencing its debate on its first national bank–but more importantly were out of touch with the “royal” or “Roman” grand image L’Enfant was attempting to create. Perhaps instinctively, L’Enfant kept his designs, plan, and lot subdivision hidden. Literally only Washington had seen them. While the failed auction, as we shall shortly see, triggered a Valley-Forge like-crisis in Washington’s project over the next year, L’Enfant continued to refuse to reveal publicly his plans until February, 1792 when forced to by Washington.

If this were not bad enough, L’Enfant refused to cooperate with the Commissioners, proved uncooperative with the Ellicott, the surveyor, and unbelievably, forcibly tore down a building of a very rich owner (November 1791) because it violated (slightly) his hidden plans. That he had trespassed and torn down construction on a private lot was flagrant enough, but, he refused to reverse himself or even apologize when required to do so by the President, who wrote “In future, I must strictly enjoin you to touch no man’s property without his consent, or the previous orders of the Commissioners“. A second incident of the same nature occurred when L’Enfant threatened to repeat his behavior–this time on property of the absolute wealthiest D.C. landowner, which Washington stopped only by alerting the Commissioner’s to L’Enfant’s intentions[99] Fergus M. Bordewich, the Making of the American Capital, pp. 86-7 .

The Commissioners by year’s end were totally outraged. In January they wrote Washington that L’Enfant was “insubordinate and insufferable” and that all three Commissioners would resign “rather than be any longer subject to the caprices and malicious suggestions of Major L’Enfant”. They complained he had begun digging “long, deep, wide ditches” (his grand radial boulevards) “for no rational purpose” (the Commissioners had not seen L’Enfant’s plans), accusing him of ignoring the fiscal consequences of what they suspected was L’Enfant’s “love of ornament“. Jefferson wrote in response to this crisis (presumably Washington had briefed him and asked him to deal with it), but was so turned off by L’Enfant’s grand plan that he accused him of trying to produce “chicane and raise opposition” to the project. Still unwilling to produce his map and publish it publicly (meaning no land sales), Washington order his surveyor, Andrew Ellicott to acquire L’Enfant’s plans and develop the map and publish it in anticipation of a second auction. Ellicott did so and published the map in late February. Elliott’s map was not to L’Enfant’s liking, he wrote a scathing letter to Washington complete with a laundry list of complaints and accusations–demanding immediate rectification[99] Fergus M. Bordewich, the Making of the American Capital, p. 88 . That did the trick.

Washington wrote back at the end of February (1792) that L’Enfant could continue on the job only if he immediately “submitted himself to the authority of the Commissioners“. Further Washington asserted “Five months have elapsed and are lost, by the compliment which was intended to be paid you in depending alone upon your plans“. L’Enfant wrote back that Washington’s letter and conditions were outrageous and he quit “I renounce all concern in it” (D.C.). Washington immediately wrote Jefferson that “No farther overtures will EVER (mine) be made to this Gentn” (gentleman), and on March 6, Jefferson wrote the Commissioners that l”Enfant’s “services were at an end“. Andrew Ellicott was named his successor. L’Enfant meanwhile unilaterally moved back to Philadelphia, where Washington feared L’Enfant would spread the word about the failures in D.C., and would create a political situation where a Congress may repeal its past legislation and bring the capital back to Philadelphia. To keep L’Enfant quiet, a payment of $3,000, a considerable sum, was authorized, which L’Enfant contemptuously rejected–but he did keep his mouth shut  [99] Fergus M. Bordewich, the Making of the American Capital, p. 89 .

Ellicott inherited a mess, and cascading rumors in D.C., spreading to Philadelphia turned the L’Enfant affair into a major crisis, that as Washington had feared, jeopardized the fragile project. What passed for a budget and funds allocation created a fiscal crisis which pitted the Commissioners and Ellicott in a series of arguments–which leaked to the streets–perhaps Washington D.C. first known leaks. Ellicott nearly quit and was dissuaded from doing so by Washington. From that point on Ellicott was an unhappy camper. At issue was the reality no visible work had been done on the chief public buildings (White House and Congress) whose construction was under a legislative deadline.

As they approached the 1792 summer fears were that the construction season would be missed entirely. Writing at the time Washington expressed his fears for the project: “There is a current in this City [Philadelphia] which sets so strongly against everything that relates to the federal District that it next to impossible to stem it“. In the same month, Philadelphia laid the cornerstone for a building which it declared would be the White House in the event the capital returned to Philadelphia [99] Fergus M. Bordewich, the Making of the American Capital, p. 91.. At this point, the heritage of the original Residency Act legislative “deal” became apparent. No meaningful federal funds had been allocated for the Federal City.

Washington and the Potomac lobby had never asked Congress for money either to acquire land for the Federal District, or for the public buildings, knowing that Congress would never have given its approval. Instead construction was left to the creative inspiration of private enterprise, assisted by modest grants from Maryland and Virginia … This hopeless strategy … virtually ensured that the project would eventually fall prey to speculators and insiders. … Instead the development of the federal city would become, behind is lofty facade of austere public purpose, an exercise in opportunism on a grandiose scale [99] Fergus M. Bordewich, the Making of the American Capital, p. 152.

Depending upon one’s perception of the mechanics of private real estate development, the construction and development of Washington D.C. was left to what today we call real estate developers–chief of which, was none other than the nation’s top real estate land assembler, President George Washington, the Donald J. Trump of the American Revolution.

Essentially needing funds to go forward, and not believing additional public funds could be approved, private financing–land sales–appeared the only short-term way out of the fiscal crisis.In October, 1792 a second auction was held. It too was a flop, raising only $20,000, only $5,000 of which was in cash–the rest promissory notes. On top of this payments on the few lots sold in the first auction had dried up. Washington D.C. was in its own Valley Forge. In November (1792) Washington wrote the Commissioners:

[The situation] fills me with real concern for I am apprehensive if your next campaign in the Federal City is not marked with vigor, it will cast such a cloud over this business, and will so arm the enemies of the measure, as to enable them to give it if not its death blow, a wound from which it will not easily recover. Nothing short of the absolute want of money ought to retard the work[99] Fergus M. Bordewich, the Making of the American Capital, p. 98.

So in the Spring of 1792, a design bid competition  for the White House and the Capitol Buildings was released. The winner of the competition would receive $500 and a single lot of land–L’Enfant had been offered much more for his “hush money”. Jefferson was the arbiter of the bid submissions. He did not adhere to the designs nor the scale contemplated in L’Enfant’s plan. The filings were not deemed impressive, and Washington himself commented “if none more elegant than these should appear, the exhibition of architecture will be a very dull one indeed[99] Fergus M. Bordewich, the Making of the American Capital, p. 102.

The response was to bring on slave labor. As described by Bordewich, slaves had been engaged in the D.C. project since its beginning. –the commissioners had already acknowledged that “they could not have done without slaves“. But from this point on “much of the work that made the city into a reality would be done by men who were hired out to the commissioners and their agents, and who were rewarded with nothing but bread, sardines, and salt pork, The capital would become, at least in part, a slave labor camp[99] Fergus M. Bordewich, the Making of the American Capital, p. 98.

 

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and so in 1793, First Wave booster-huckster to his core, the President sitting on a horse, personally headed a parade, with two brass bands, a bunch of Masons in costume, and treated attendees to a barbecue—during which he conducted the land auction, personally bought the first four properties of what was undeveloped swampland[viii], and commenced the city’s development. The auction was not particularly successful

This is what a Privatist-MEP city-builder did in those days. It was a fitting culmination for a man who had lived a life centered around real estate development. That he used a governmental EDO, and built a master-planned city for the federal government is the exception to the rule of city-building in the Early Republic. City-building over the next eighty years was predominately private led, except for a grid unplanned, and mostly relied on private EDOs. Several examples, Chicago in particular, are described in As Two Ships. Of more consequence to the typical city-building was that Washington (and Morris among others) had set in motion east of the Mississippi Big City land assembly, surveying, initial settlement and amassed tremendous acreage into huge land corporations. It was these private land corporations that pioneered passage into the interior.

One mistake Washington made was in not realizing that a national capital rested on political, not economic functions. It’s economic base proved to more “politics” in an economic sense, not industries and sectors. That political economic base crowded out its more “economic” base–and as we see Alexandria, the Piraeus-like port city of Virginia and the Patowmack Canal. Georgetown was a poor substitute, not that the Patowmack Canal lacked for its own inadequacies.

Footnotes

[iv] A new work, Colin C. Calloway, The Indian World of George Washington, Oxford University Press, 2018) literally opens up the topic of Washington as real estate speculator, city-builder, and ridden with conflicts of interest, President and formulator of Native American “foreign policy”–war and conquest.  His 1791 St Clair Expedition into northwest Ohio was destroyed. The 1794 Treaty of Canandaigua between the United States and the Six Nations of the Iroquois Confederation opened up Upstate New York for Holland Land Company settlement. The 1795 Treaty of Greenville, with the twelve tribes of the Western Confederacy failed miserably. But Calloway deals comprehensively with the multi-faceted Native American relations, with extensive information applicable to ED in the South as well as North.

[v] http://www.history.org/foundation/journal/winter13/washington.cfm[v] http://lehrmaninstitute.org/history/founders-land.html[v] http://lehrmaninstitute.org/history/founders-land.html

[vi] Robert Silsby, the Holland Land Company in Western New York. Volume VIII, Buffalo and Erie County Historical Society.

[vii] http://lehrmaninstitute.org/history/founders-land.html

https://www.google.com/search?q=cenus+population+1790+to+1990&oq=cenus+population+1790+to+1990&aqs=chrome..69i57.16685j1j7&sourceid=chrome&ie=UTF-8file: Table 4: Population 1790-1990