Washington “the Project Manager” Implements his Western Settlement/National Defense Paradigm

Upon his return from his western tour in October, 1784, Washington made his final commitment to the project. The next steps to accomplish the Patowmack Canal and Potomac Commerce project overlapped but specifically he needed to:

Secure from multiple state legislature’s approval of the organization (EDO) entrusted with construction, financing, and operation of the project. The approval also included the membership of the EDO’s Board of Directors, and its reporting and accountability to the state legislature;
Multiple state legislatures were required because the Potomac, and relevant tributaries, flowed through Maryland, Pennsylvania and Virginia. Commerce also involved the Chesapeake Bay and that involved Delaware and tangentially North Carolina. As was the established procedure of the era;
Each state had to grant the EDO a monopoly for a period of time to carry out the project, and commence its operations. This EDO then was a public-private partnership between the state which infused its public purposes onto the private purposes of the EDO principals (Washington and his investors). This form of EDO, called the state-chartered corporation, was the common form of infrastructure development during the colonial period, and its use continued well into the 1840’s of the Early Republic;
in return for the implementation of public purposes and any regulation imposed by the state to grant either the monopoly or the charter incorporation, the state approved the means by which private financing could be obtained, and also stipulated the amount and form of the state public funds committed to the project; some point in that process, the approved EDO would commence financing and construction of the project, which of course necessitated the hiring of management, surveys, drafting of engineering specifics and the hiring of laborers, etc.

Obviously complicated, this process was inevitably extremely political. Readers should be alerted that this was not the first time Washington had commenced proceedings to build a canal. As will be described in more detail in a future module, the prequel to Washington’s 1783 career, Washington had proposed in 1774 a canal on the James River for purposes similar to his 1784 Patowmack project. He used the James River instead of the Potomac in order to secure sufficient votes for Burgesses’ approval. That project, however, was not able to secure the approval of the Maryland legislature, and Washington, on his way to attend the 2nd Continental Congress in which he was awarded command of the Continental Army, was not able to pursue the matter any further. In his 1784 request, Washington returned to his Potomac in large measure because of his celebrity status, and his previous approval from the Burgesses.

Virginia Approves the Patowmack Canal

The obvious problem with the Potomac’s opening of the West was that it required the reasonable and effective cooperation of what had been three rival and competing states (Maryland, Virginia, and Pennsylvania), and a close cooperation of Maryland and Virginia without which the project could not extend to Pennsylvania. These two states with a past history that included an invasion of Maryland by Virginia at the time of the Glorious Revolution, “did not get along”. Governor Carroll could push through Washington’s Patowmack bill, but it could not guarantee in any way the cooperation of Maryland in its future operations and construction. The Potomac River was a border between the two states and its use clearly required their cooperation. Washington anticipated this in 1784 and had first tried to involved officials of the national government of the Articles of Confederation, and even tried to secure the Article’s Congressional approval of two state chartered corporation(s) (Virginia and Maryland) specifying more clearly and precisely what the Patowmack EDO could “do” on the River for its hybrid river and canal waterway. That effort failed. In a letter to Jefferson in 1784, he wrote that a “treaty” for interstate commerce on the Potomac was impossible because of the “incertitude which prevails in Congress (Article of Confederation), and the non-attendance of its members“.

Interestingly from then on Washington ignored the Articles Legislature which in correspondence he described as “half-starved, limping Government that appears to be always moving upon crutches and tottering at every step“–strong letter to follow [1]. In his mind, at this point certainly, his project and the vision behind it was state-focused and was to be driven by state legislative action–a bottoms up initiative. His plan now envisioned the next step was Virginia’s approval of the public-private state-chartered corporation that would finance, construct and operate the proposed river-canal-road enterprise. Of necessity, because existing precedent required the state of Maryland to sanction the project, and to create its own (duplicate) version of the state-chartered corporation to conduct the endeavor on its behalf, Washington also had to start overtures to the Maryland authorities and state legislature. Two final steps were an attempt to enlist Robert Morris, Philadelphia’s business powerhouse, in his project–thereby hopefully putting a speed bum in Pennsylvania’s potential competing canal initiative, and finally the formal incorporation of the corporation and the recruitment of investors.

Washington was not mistaken in Pennsylvania’s ambitions to compete with his project. In the late fall Washington made overtures to its most prominent financier, the politically influential Robert Morris–who BTW was among Washington and Marta’s closest friends during the Revolution (they spent several Christmases together and lived in Morris-owned property). Reputed to be America’s richest man, Philadelphia’s Robert Morris also had his own ideas about opening up the West–for his home base Pennsylvania and Philadelphia. To counter this Washington offered Morris a near monopoly of the logistics-financing and factor cluster in his proposed Alexandria port. That stake in Alexandria, Washington said in a letter, would allow Morris to become the

first great trader to set up a branch of his mercantile house [sort of bank/insurance/logistics company] at Alexandria“. Alexandria, Washington argued ”would by means of cheap water transportation provided by the canal obtain the great traffic of the surrounding area on which Baltimore on the land route now lives. But a large capital–that is capital houses, large wholesale stores, as well as commercial spirit–is required in the town. The local traders cannot compete with the with the great towns because they are small traders forced to import or purchase their goods in the country areas on credit, consequently retail dealers in the interior go to Baltimore and Philadelphia for the purchase of their import and sales of their staples [exports] [2].

Morris in turn, as a good friend often does, turned him down, stole Washington’s idea, and started his own competitive project in Philadelphia. He did not do so until 1792, however. At the time, as we shall discover in the next chapter, Morris was consumed with Pennsylvania politics and his own state bank, the Bank of North America. Morris built his canal eventually years later–incorporating his state-chartered corporation (Delaware and Schuylkill Navigation Company) in 1792, however. His seventeen mile canal was never fully completed because Morris hit upon hard times, went bankrupt, and then served in debtor’s prison for eighteen months. That however, is another story for another module. In any event, while Washington initially feared competition from the “Yorkers”, his first rival was Philadelphia–a state whose approval was also required (at least when river access reached Pennsylvania banks) was, for the moment at least, neutralized.

Courtesy required Virginia go first before Washington could formally petition Maryland, but the reader should appreciate that approval campaigns in both states were waged simultaneously. With the Maryland campaign in full blogging, letter-writing and legislative lobbying mode, Madison, who had met with Washington earlier in the Fall of 1784, became the floor manager of the required Virginia legislation. Virginia took its first steps on Nov 16 1784, when Washington, along with Lafayette who was visiting Washington, traveled to Richmond delivering to legislators a proposal in writing, and speaking to a Virginia State Legislative Committee, chaired by Thomas Paine. His bill asked approval of a state-chartered corporation authorized to survey and appoint a commission to promote/conduct his “internal improvement” project. He also sent a letter to Governor Harrison asking for his support, and explaining the proposed project in summary form. At that time, Washington expressed to Lafayette, a man he considered his adoptive son, what Lafayette took as his sincere rationale behind his proposed project:

I wish to see the sons and daughters of the world in peace and busily employed in the more agreeable amusement of fulfilling the first and great commandment–Increase and Multiply; as an encouragement to which we have opened the fertile plains of the Ohio to the poor, the needy, and to the oppressed of the earth … The ways [to accomplish this] are preparing, and the roads will be made easy, through the channels of the Potomac and James River” [3].

Also,in the letter to the Governor, Washington pressed for near emergency funding for his new project. Pennsylvania he asserted was likely to press ahead and capture the opportunity of opening up the Ohio by developing the Susquehanna despite a “heavy cost” because…

such a people … possessed of the spirit of commerce, who see, and will pursue their advantages, may achieve almost anything’. That New York will also attempt to capture the trade by means of the Hudson [is also certain] … ‘no person who knows the temper, genius, and policy of those people as well as I do can harbour the smallest doubt… But in Virginia there is jealousy lest one part of the state obtain an advantage over the others, as if the benefits of trade were not diffusive and beneficial to all” [4].

From the start in late 1784, Washington was working the aisle in both states–he had learned well the lessons of his 1774 experience. A series of “blogs” appeared in the Baltimore press advocating the merits of the project–likely composed by Washington himself. He wrote to the President of the Maryland Senate pleading his vision and project, concluding in Achenbach’s paraphrase ‘to fail to improve the Potomac corridor–obviously the best route to the West– would be tantamount to insulting the Supreme Architect of the Universe”. And what a vision it was, in one December 1784 blog to the Maryland Gazette, the anonymous author declared:

The opening of the navigation to the Patowmack, perhaps a work of more political than commercial consequence, as it will be one of the grandest chains for preserving the federal union . The western world (beyond the mountains) will have free access to us, and we shall be one and the same people, whatever system of European politics may be adopted. In short it us a work so big, that the intellectual faculties cannot take it at a view [5].

On December 15th the bill, fleshed out by the Virginia Legislature, approved and empowered a corporation to open and extend the navigation of the JAMES River, permitting subscriptions to finance the state chartered corporation to conduct the endeavor. A second bill, duplicating the first, by empowered Washington’s state chartered corporation for the Potomac River. The two bills were approved on January 5, 1785 Shortly before Christmas, December 1784 Washington traveled to Annapolis–alone–to meet with Maryland legislators. He worked over Christmas and after for six days; on December 28th he wrote to Madison” It is now near 12 at night, and I am writing with an Aching head, having been constantly employed in this business since the 22nd without assistance from my colleagues” [6]. He was successful. In one of the last acts of the 1784 Maryland General Assembly, the legislature ratified the incorporation of a Patowmack Canal Corporation, and permitted investors to invest in the canal project.

The six week two states lobbying blitz had been spectacularly successful–at the cost of Washington’s first Christmas back home since 1773.

What Had the Legislatures Wrought?

Each state committed to the purchase of fifty shares in the new corporation, and they each voted appropriations to cut and clear roads from the Potomac to the Cheat and Monongahela Rivers. The states funding amounted to about one-third of the proposed project cost as initially outlined by the Washington proposal. Stockholders were to provide the rest. Washington himself had personally committed 2200 pounds to the corporation and publicly agreed that, if asked, he would serve as Corporation President (CEO and Board Chair) [5a]. Specifically the charter allowed the corporation to create a navigation channel at least one foot deep throughout the year in the Potomac River. Surprisingly as late as May 1785, the economics and practicalities, even the possible existence, of locks in the canal had not come up. The project was to be completed in three years. Had Washington deceived himself of the obvious need for some locks, or had he simply left it off the table for the time being for obvious purposes of achieving initial approvals is not clear to any but skeptics such as myself.

The Virginia legislation, however, added one wrinkle to his proposal–it had approved two canals. Once again Washington encountered, what we will describe in later modules, a defining characteristic of the Virginia Tidewater policy-making process: to secure votes for passage of a state-wide legislation, the Virginia legislature almost always resisted granting a singular advantage to any one county, river or applicant. Every river/county that wanted a canal corporation would be awarded one. The James which flowed through Richmond, the state capitol, had a history of a canal–Washington’s earlier canal–and so it too would be authorized to form a corporation and reach into the trans-Appalachian interior using the James River [999].

Also the State of Virginia, in one of what would be a seventy-five yearlong periodic spasm in funding private canal-building, eventually acquired 340 of the 701 shares in Washington’s ($150,000) Corporation. It also acquired 70, half of the shares, in the James River Company ($70,000) as well. In a sort of “BTW” it also purchased $17,000 in stock for the Great Dismal Swamp Canal (total $100,000)–and granted it the first known tax abatement as identified by the U.S. Supreme Court [5b]. Moreover, knowing Washington’s obvious interest in canal-building, the Virginia legislature granted Washington personally, then a private citizen, 150 shares of the James River and Potomac canal companies “in return for his services to the state and [his dedication] to the cause of canal-building” . This gift threw Washington into a total dither—should he accept them or not? That gift by the legislature drove an obvious wedge in Washington’s alleged public purposes for the canal and his private wealth-creating function. It distracted Washington for several months of letter-writing and advice-seeking. It also made it impossible to formally incorporate the Corporation and enlist investors until he somehow resolved the obvious conflict.

As Wood describes Washington’s reaction, it is clear the decision was a very serious matter to Washington, critical to his personal integrity and appropriateness. Accordingly, Washington widely sought reaction and advice. Personally, he deeply believed in canal-building, not only to make money, but also to unify the nation by making travel and commerce easier. But he also believed to accept the shares would seem a public gift—a gift which compromised his most treasured asset, his “disinterestedness” (no conflict of interest). “Few decisions in Washington’s career caused more distress than this one” [6]. Thomas Jefferson convinced him to decline the shares “donating” them instead to the college that eventually became Washington and Lee. The donation valued at $20,000 was said to be the largest gift made to a university as of 1796.

In this period he also had to flesh out the actual work plan, business plan and engage in what today is called project scoping. In that effort it became clear the state legislation, focused on the canal corporation and its role, had left out a lot of important details–essential to construction and to the proposed operation of businesses likely to invest in the canal. What he needed was to get agreed from above, an acknowledgement and acceptance of basic core common activities and processes essential to the project so that as they came up for resolution any implantation problems could be negotiated and arbitrated. He needed what today is called a “memorandum of understanding” (MOU). So he enlisted support from Madison to secure legislative approval of a joint meeting between delegates from Virginia and Maryland to negotiate Unfortunately for Washington, Virginia limited the discretion allowed its delegates–and in both instances future legislative ratification was required by both state legislatures and the Articles of Confederation Congress. Nevertheless, approvals for the conference were obtained and the delegates were appointed.an agreement on the use of the River for interstate commerce. Another Maryland friend-legislator secured equivalent legislation from the Maryland legislature.

They were to meet on March 21, 1785 in Alexandria–except that Patrick Henry, for whatever reasons (including a dislike of Washington and an almost hatred of Jefferson) failed to notify the Virginia meeting delegates (Madison and George Mason) until the day before. The Maryland delegates arrived on time, without, any Virginia delegates in attendance. Washington, not a delegate because he was not a state legislator, got wind of the foul-up and arrived on the scene, bringing the Maryland delegates to Mount Vernon and putting them up until the Virginia delegates could get there on March 25.

Washington presided over the three day meeting that followed. A far-reaching agreement was, in fact, negotiated on March 28 1785–and called the Mount Vernon Compact. Previous to the Compact, the established legal status of the Potomac was that it lay entirely within the boundaries of Maryland. The Compact changed that to “a common waterway” which included its use by Virginia. Its thirteen clauses (which included reciprocal fishing rights, navigation, tolls and duties, commerce regulations, debt collection, et al.) would have been sufficient for Washington’s purposes (both state legislatures subsequently ratified the Compact by early 1786).

By mid March, 1785, Washington (and Madison) had nailed down from the two states what was needed for the project to go forward. By this time, Washington seemingly had resolved in his mind any issues arising from the legislative gift of shares to the corporation, and the next step was finally to incorporate the Patowmack Canal Company Corporation. Three days previous to the opening of the Mount Vernon Compact, Washington presided over the first meeting and formal incorporation of the Canal Company in Alexandria. Washington was subsequently elected President (and CEO) of both corporations created by the Virginia/Maryland legislation and awarded an annual salary of 14 schillings. The more important of the two was the Patowmack Canal Corporation on the Potomac and on that canal we will concentrate. Both corporations had a long, semi-successful existence (described more fully in Theme 3’s case study of Virginia’s Early Republic DTIS strategy). The Patowmack Corporation ironically was what remained of his earlier 1774 efforts to open up a Virginia-based passageway to the West. Renaming the company to Patowmack Canal Company, he effectively abandoned its earlier James River efforts and concentrated on the Potomac, the shortest route into Ohio found anywhere in the nation. To him “Nature then has declared in favor of the Patowac (Potomac), and through that channel offers to pour into our lap [he was writing to Jefferson] the whole commerce of the western world [7].

“Serious money poured into the Patowmack Company coffers, and fed other entrepreneurial ventures along the river [investor John Frederick built the New Bremen Glassware works, for example) “and by late spring of 1785, the Patowmack Company had sold 405 shares of stock, raising 40,300 pounds [in a letter written to Lafayette, Washington included a comment that “if he could he would sink all his money into shares of stock in the two river companies. ‘Men who can afford to lay a little while out of their money are laying the foundation of the greatest returns of any speculation I know of in the World”. Perhaps he was hoping to sell a few shares to Lafayette, or more likely was plagiarizing Elon Musk’s Tesla appeal to investors [8].

With the initial legislation, financing, and incorporation of the Patowmack Canal Company in place [which I am pleased to declare as America’s first private-public EDO-why not?], the good times stopped rolling. Washington didn’t know anything about canal or channel construction and wasn’t about to manage construction. Washington and his fellow directors (for the record, George Gilpin, John Fitzgerald, Thomas Lee, and Thomas Johnson) looked around for a suitable COO. Seeing none they advertised in Baltimore and Philadelphia newspapers. By July, apparently unsatisfied with what that had churned up, the directors were worried, maybe desperate to find an engineer. In that atmosphere, James Rumsey, our steamboat inventor, came to mind. Washington formally asked, and Washington formally appointed him ‘Superintendent’ at an annual salary of 200 pounds–a goodly sum to the bartender/inventor (July 14, 1785).

With Rumsey on board, three work crews were hired and immediately sent to the three most challenging falls/rapids below Harpers Ferry. That, of course, makes it a bit more evident that Washington and his board were cognizant of the need for locks. Locks, their number and cost–not to mention technical feasibility–were the critical variable in the fiscal/engineering soundness of the overall project. The falls at Great Falls were nearly ninety feet, and certainly the most daunting of all. Washington, it appears, held in the back of his mind a Plan B for locks; in place of a lock he intended to clear a path on the bank and haul (portage) the boat up with chains and cranks (presumably limiting the need for towpaths and some locks) [99] Flexner, p.87. More paradoxically, even though he knew Rumsey did not yet possess a viable “steamboat” technology, he counted heavily on the steamboat to go up river.

On August 1 Washington and several of the directors traveled up river to supervise and make further appraisals. This was the start of a nine day enterprise that involved shooting the rapids in a canoe on several occasions (three for certain, four probably). They travels took them up to Harpers Ferry, and Seneca Falls in particular. The canoe experience was two-way where possible–try that some day.The goal was to locate the best location for the channel (on a side or down the “middle”. It was clear that rocks were the main issue as well as choke points around which “stuff” would accumulate and block passage. The diaries of the directors including Washington distinguish were locks were not needed, but also stipulated that future visits at other sites could alter the needs for locks. The matter got even more complicated, especially as the Fall wore on and rains flooded the Potomac, making work for the crews hazardous and limiting their access considerably. Considerable snow, followed by days of 60 degrees compounded river flows greatly. Among the points of this paragraph, is the reader should realize that reality is dawning on the marble bust of Washington’s hopes and optimism. After ten days when he returned to Mount Vernon he reviewed his notes and diaries and wrote “nature had put a melancholy look–everything seeming to droop” [9]. I have never heard of a project manager who has not experienced the depressing reality of a project when it finally gets going.

Rumsey fared little better. His problem was the work crews. He imported ex-convicts from England, and hired a number of indentured servants. None had skills, and few had a work ethnic, and almost all, probably all, hit the bottle (not hard because they were paid in run and whiskey). Even Washington noticed they were “irregular and disorderly”. Shortly after, slaves were “hired” from their owners. To compound this, the work was dangerous, wet, and in the first months cold. The limits of technology also became very evident. Dynamite was not to be “discover” for nearly 80 years, and so blasting powder and fuses were used–erratic, unpredictable and not very effective in blasting through solid granite, and river moistness. To blast the granite and clear the river, the rock had to be drilled, and blasting powder inserted into the hole, while keeping it dry–and then you had to get away from the blast in time. Washington return to the scene in late September, noticing progress was minimal, the river high and the “fewness and sickliness of the hands [required their numbers be] increased and their Wages raised“–already the budget was showing stress. Over the Fall Washington and several directors were visit the project and supplement their feasibility analysis. Washington was spending way more time on management than he ever intended.

Over the next year some progress was made, a 1.3 mile channel around Great Falls was constructed, but for the most part the project was hopelessly behind schedule. A considerable part of that problem was the workforce . Rumsey spent more time on posses with the sheriff chasing runaways, nightly tavern brawls, the convicts threatened Rumsey physically, and huge racial and ethnic mis-behaving s made ‘personnel management” a virtual impossibility. Rumsey, was also trying to supervise, an assistant back in Shepherdstown who was experimenting with a steam engine, to substitute for poles–in order to keep ahead of Fitch back in Philadelphia. In December (1785) Rumsey tested the designs on the Potomac and from that point he worked on various machined components for engine. The river froze and that ended his tests for the winter. He resumed his steamboat work in April, 1786–of course still managing his canal workforce as well. Fitch by that time was also engaged in design and engine-making. The steamboat race was now on.

Under stress from all sides, Rumsey quarreled with several directors, and worse with his assistant who was close to several directors. An internecine warfare developed and, of course, Washington had to step in–to little avail. Matters got worse, and then even more worse. Finally in July 1786 Rumsey was fired/quit and he left to return full time to his steamboat project. The assistant director replaced him, the first of seven directors that followed over the next fifteen years [10[. In 1787, both Virginia and Maryland extended Phase 1 of the project to 1790–the first of several extensions. There was progress, and yes eventually a canal system would be constructed, but the early years were a nightmare. The realities of construction management, the limits of technology, and the natural variability of the river and weather made schedules dubious from the start. The project demanded constant involvement from Washington and the board–and its fragility left its impression on Washington’s discretionary time and thought. The canal corporation suffered as well:

The companies attempt to [sell more shares to meet increased expenses] yielded little capital. Toward the end of the decade, moreover, it became apparent that the adversities posed by this river might be too great for that generation’s engineering know-how–and as with his Dismal Swamp venture, Washington did not realize a single cent from this speculative gambit during the 1780’s [11]

To Washington, 1786 and 1787 were the Valley Forge of his Patowmack Canal project. Fortunately, Washington by that time was working on a new day job–and would by the end of 1987 delegate management of the canal and of the Board of Directors to others. He remained on the Board until his death in 1799–and in the 1790’s things got better. During the 1790’s, five locks would be constructed and an effective, although incomplete, “passageway” was achieved. This was done while Washington was away, serving as President of the United States (he remained on the Board of Directors). In the end it was the building of Washington D.C., i.e.e the construction of a port city, that infused the Patowmack Canal with sufficient funds and investor commitment to overcome the challenges and create a viable, and profitable, canal. Still it was a meaningful achievement for the project, which, after its initial lean years, offered a great dividend and enjoyed reasonable volumes of shipping[12] . After that period, the reader will have to read further to see the ultimate fate of the Patowmack Canal. Upon retirement in 1796, he continued to participate as an active shareholder. He was still involved on December 10, 1799 when he voted his 73 Patowmack shares (apologizing for being in absent because he was too sick to travel) for the last time. He died two days later [13].

the Role of the Patowmack Canal in the Making of the American Constitution

With the Compact ratified by both states in early 1786, Washington’s next step was to once again attempt to secure the approval of the Articles of Confederation Congress. James Madison was there, Virginia’s Congressional delegate, ready and waiting to bring the national government on board with the Compact.

But–and there is always a But–the Articles of Confederation Constitution, it soon was discovered, required that any interstate meeting must first secure its approval -beforehand–which the Compact, of course, had not. In effect, their failure to accept the Compact rejected it. Literally, he was once again at square one in his agreement with the two states. Washington was furious. And given the status of Washington all sorts of noise arose. Moreover, with Virginia active in canal construction other states expressed “concern” about the Compact, fearing a successful Virginia/Maryland canal would give these two states an advantage in opening the West (Pennsylvania was the most outspoken). Approval of the Canal was not going to be automatic, and negotiation was likely to be time-consuming and expensive. By this time, as noted in the previous section the Virginia and Maryland state legislatures had lost their original optimism and they too had accumulated experience in the realities of Potomac canal construction. By the end of 1786, and through early 1787, Washington was at wit’s end.

This marks as good as any turning point in Washington’s thinking about the Articles of Confederation. It likely corresponded to some degree with views of most southern western expansionists. While readers should rightly question the significance of western expansion, and Washington’s budding, if frustrated, economic development paradigm key role in the shift away from the Articles to some form of a stronger national government, it certainly reflected Washington’s thinking–he after all had money invested in land and the canal–and while never his exclusive interest, his western paradigm was exceedingly high priority with him. It is also reasonable that others used him as a guide or as an rallying point for their concerns. The Articles weaknesses also importantly affected a number of other areas as well as western navigation and expansion. Washington was far from alone in being frustrated by the inadequacies of the Articles governance. Ferling opens his 14th Chapter, “An End to Retirement”, with Washington’s reaction to this economic development frustration. It is his first reason for Washington’s decision to return to a public life. Speaking of this time period when the Articles bailed out on his Mount Vernon Compact, he comments:

Washington was most concerned by the jealously between the states, a covetousness and mistrust which resulted in their refusal ‘to yield competent powers … the Federal Government. Obviously this was not a new concern [to him] … Political decentralization threatened to adversely affect his interests. The simmering sectional rivalries, for instance, poised a constant menace to his Potomac navigation plans, and because, as he observed, he was ‘not so disinterested in this matter’, he was moved to complain about the several states ‘short-sighted politics’. The impotent central government’s inability to compel Spain ‘to open the avenues of trade’ in the transmontane region was another side of the same coin., for it impeded the flow of population into the West … On into 1786 he remained confident [however] that everything would be worked out. … his tone in 1786 was new … In 1786 he came to see the crisis as real and present [14]

Elkins & McKitrick also strongly agree river navigation, western expansion and the risk of increasing foreign intrusion into the West was Washington’s Rubicon-policy issue that drove him to reform of the Articles and the need to create a stronger national government to minimize America’s political decentralization

… a visit to the headwaters of the Ohio in the fall of 1784 … proved to be the first in a chain of events which culminated less than three years later in [Washington’s] presiding over the Constitutional Convention in Philadelphia. Once again private concerns found themselves almost unwittingly absorbed into public ones as Washington’s interests was drawn first to problems of water to the West, and eventually to the entire range of limitations which prevented the Confederation government from doing anything effective in categories of action of which commerce was but one [15]

Because state’s rights very quickly manifested itself in the making of the Constitution, and its application in Washington’s future first term in office, many assume that states rights-inclined political activists did not see the need to reform the Articles and remake the Constitution. For the most part, not so. Washington’s compatriots in Virginia, George Mason, for example agreed that reform was necessary. But what reforms, and to what degree the national government should be made powerful, and in what policy areas remained unknown in 1786–and would only clarify over the next five or six years. Even Washington hesitated over four months in 1787 as to whether he would attend the Constitutional Convention (see below). Perhaps the better metaphor is that through most of 1786, substantial elements of the American political elite were “fording” the Rubicon, and would only reach the opposite bank a bit later. But we get ahead of ourselves.

Madison, also frustrated by the Articles inadequacy as a national government, seized the bit in the tempest following Article’s dismissal of the Mount Vernon Compact. He quickly secured approvals from both Virginia and Maryland to call, on behalf of both states, a “convention” to be held in Annapolis in early 1786. The title of this Convention was “a Meeting of Commissioners to Remedy Defects of the National Government” The purposes were to “consider how far a uniform system in their commercial regulations may be necessary to their common interest“. All states were formally invited to attend the Convention which finally convened on September 11, 1786 at George Mann’s Tavern in Annapolis. Delegates from five states arrived, four other states arrived late. Twelve delegates from New Jersey, New York, Pennsylvania, Virginia and Delaware actually participated.

Amazingly, these twelve delegates included the core of what was to be Washington’s First Cabinet and Government three years later: James Madison (Washington’s chief Congressional spokesperson, adviser in the First Congress, Alexander Hamilton, his Secretary of the Treasury, Pennsylvania’s Trench Coxe–Hamilton’s Deputy Secretary of the Treasury, Edmund Randolph-the nation’s first Attorney General, and the Convention was presided over by John Dickinson from Pennsylvania and Delaware. That all but four states attended, or tried to attend, suggests multiple concerns with widespread geographic cross-sectional sympathy for Articles reform existed in 1786. Once again, as it had earlier in 1774, Virginia was the very first to start the ball rolling.

After three days of discussion in Annapolis resolved that matters were critically serious, that interstate commerce were essential to both the security of the new nation and its economic growth. But that the attendees lacked authority to negotiate an comprehensive reform of the Articles on behalf of all the states in the Articles. The Convention Report, drafted by Alexander Hamilton, called for a convention of all states to be held eight months later in Philadelphia. Its purposes would be to amend the Articles of Confederation to resolve issues associated with “commercial intercourse and regulation“, “having as its object the Trade and Commerce of the United States” and it asks the delegates to the proposed Convention:

to take in consideration the situation of the United States, to devise such further provisions as shall appear to them necessary as to render the Constitution [of the Articles] of the Federal Government adequate to the exigencies of the Union, and to report such an act for that purpose to the United States in Congress assembled, as when agreed to by them, and afterwards confirmed by the legislatures of every state, shall effectually provide for the same [Hamilton’s Report from the Annapolis Convention] [16].

Delegates from each state met in Philadelphia in July 1787.

Having resolved issues that could not be handled satisfactorily under the existing Constitution of the Articles, the delegates (meeting in secret) decided to construct an entirely new form of government, around an entirely new Constitution. Today that Philadelphia Convention is known as the Constitutional Convention–and the Constitution it produced, subsequently ratified, was the original Constitution of our American Republic. I might add that George Washington was elected to “preside” over this Constitutional Convention, and he moderated its discussion.

So … Where Do We Go From Here?

Our opening tale of George Washington, our Father of Mainstream Economic Development is drawing to a close. His determined commitment to implementing the Tidewater’s leadership of his Western Settlement-National Defense economic development paradigm–the first states commitment to using economic development as its path into the new American future has been launched–and quickly frustrated by the weak national government, the Articles of Confederation. In frustration, Washington and Madison launch a reform movement that morphs, almost without effort, into a drive for a new Republic and a new Constitution. So great and widespread is the frustration with the Articles that Washington’s public leadership of a reform drive effectively “put a fork” into the moribund confederation. We leave this four year tale of Washington, with him presiding over the Constitutional Convention.

We know what happens to George after this–but our opening passages focused on his western settlement as national defense economic development story–where does it go after this. That paradigm is the going to be the first major state, local–and federal government economic development paradigm in our nation’s history. While there will be more paradigms to follow, this paradigm pours the foundation for our two-hundred and fifty year state and local economic development history. So from here … where do we go? Let’s clear the deck, move to the next module and briefly introduce the reader into what lies ahead. Our history is about to being in earnest.

To Begin the History Click Here

Footnotes:

[1] Joel Achenbach, the Grand Idea: George Washington’s Potomac and the Race to the West (Simon & Schuster, 2004), p. 126

[2] Joseph Dorfman, the Economic Mind in American Civilization, p. 251; Letter to Morris, February 1, 1785, Washington’s Writings, XXVIII, pp. 49-55

[3] Letter to Lafayette, July 25, 1785, Washington’s Writings, XXVIII, 206-7.

[4] Joseph Dorfman, the Economic Mind in American Civilization, p.250; Letter to Governor Harrison, Washington’s Writings, XXVII, pp. 473-4

[5] quoted in Joel Achenbach,the Grand Idea, p. 127; Carter Goodrich, Government Promotion of American Canals and Railroads 1800-1890, p. 23

[5a] John E. Ferling, the First of Men, p. 334

[5b] Joel Achenbach,the Grand Idea, p. 127

[[6] Gordon Wood, Revolutionary Characters (Penguin 2006) p. 44-5.

[999] The reader may keep this in mind because the James River Canal will appear in future modules, with two guys named Madison and Monroe closely involved. In any case, on its terms the state legislation authorized/required each state to purchase 10% of the shares in each corporation. With the aggressive support of Madison, and Governor Harrison, legislative passage overcame numerous legislative concerns–indeed the legislature purchased additional shares, beyond the legislation and gifted them to Washington in appreciation for his war-time leadership and service. That gift, as we shall see below, opened up a can of worms for a man who regarded himself as a national role model.

[6] Letter to Madison, quoted in Joel Achenbach,the Grand Idea, p. 128

[7] Quote from Mount Vernon https://www.mountvernon.org/library/digitalhistory/digital-encyclopedia/article/the-potomac-company/also Wayland Fuller Dunaway, History of the James River and Kanawha Company (Leopold Classic Library, 2018; Original edition, 1922), pp 23-31. This is the most definitive treatment of Washington as a practicing economic developer, in the transition Articles’ period when Washington before became President.

[8] Joel Achenbach, The Grand Idea, pp. 129-30

[9] Joel Achenbach, The Grand Idea, p.133

[10] John E. Ferling, the First of Men, p. 335

[11] John E. Ferling, the First of Men, p. 335

[12] For the best description of early Virginia attempts, including Washington’s, to use the Potomac to open up the west see Cora Baker Foster, “Early Chapters in the Development of the Potomac to the West” .Records of the Columbia Historical Society, published by Historical Society of Washington D.C., pp. 96-322 (jstor.org/stable/40067035) and Dunaway’s History of the James River and Kanawha Company, cited above. These sources can fill in the detail not included in this module.

[13] [15] Peter Bernstein, Wedding of the Waters: the Erie Canal and the Making of a Great Nation (W. W. Norton & Company, 2005), p. 75

[14] John E. Ferling, the First of Men, pp. 347-9

[15] [15] Stanley Elkins & Eric McKitrick, the Age of Federalism (Oxford University Press, 1993), p. 43