1792

Serious efforts were made to extend the Patowmack Canal to link up with Georgetown, and Washington pressed hard to build a stone bridge across the Rock Creek (which then was considerably wider) in the Spring of 92–for which he came under some attack for favoring Georgetown. Also characteristically in a period when everything was going wrong, the bridge collapsed [99] Elkins & McKitrick, p. 177, and A History of the National Capitol, Vol 1, pp. 190-91. Still, this episode is testimony to Washington’s sustained interest in combining the fortunes of the D.C. project with that of Patowmack Canal. In March 1792, at the height of the L’Enfant affair, Washington wrote to Doctor Stuart, a Commissioner and his doctor that “There is such an intimate connection in a political and pecuniary considerations between the Federal District and the inland navigation of the Potomac that no exertions, in my opinion, should be dispenses with to accomplish the latter” A History of the National Capitol, Vol 1,p.192, Footnote 1,

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, despite earlier kind comments, 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 himself ordered the surveyor, Andrew Ellicott to acquire L’Enfant’s plans, 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, it appears privately was still unwilling to fire L’Enfant–blaming others for the map as well as L’Enfant–but absolutely unwilling to brook L’Enfant’s unwillingness to work with the Commissioners, Washington wrote back to L’Enfant at the end of February (1792). 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 L’Enfant and the Commissioners that “I am instructed by the President L that [despite] the desire he has entertained to preserve your agency [L’Enfant], the condition upon which it is to be done is inadmissible” and   “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 mostly shut anyway. [99] Elkins &McKitrick, p. 176 and Bordewich, the Making of the American Capital, p. 89 L’Enfant worked on Washington D.C. for about a year.

the Valley Forge of Washington D.C. City-Building 1792-3

The reader might be wondering at this point if the module is a half-baked attempt to describe pre-1800 long-distance project management? If so it is because the overlap is huge with city-building/ economic base-building, which in actuality are a succession of individual projects and a cluster (pardon the pun) of interrelated ED/CD strategies. Certainly the point has been driven home that public project management ultimately reverts back to key legislative (and constitutional) enactments and powers, and above all reflects the financing plan that underlies its implementation. There is no escaping that the Residency Act did not provide sufficient structure and capacity to remotely accomplish the tasks it specified. The Act passed by one vote, and both the act and the location it specified were controversial, and did not reflect a settled consensus, but was rather a political compromise that involved other even more controversial legislation (Hamilton’s Public Credit Act and later National Bank legislation). The President was out on a limb, and the federal government’s first major initiative in direct economic development was in trouble from its start. As typical, money, financing, or the lack of it drove project management.

With no federal funds available, cash flow was always an issue. Washington naively believed cash flow revenues could be provided through individual lot land sales. His architect strongly warned him the land was worthless, and the reality of his grand plans and designs was that that lots would be expensive, and subject to building and constructions restrictions that made it even more so. At critical points the states were pressed for partial payments of their incentive grants, but that proved difficult, erratic and unpredictable, proving early on a little-told tale that public incentives after the initial offer and ribbon-cutting can be surprisingly hard to draw down, especially when needed for cash flow–even in 1791. Some things never change, it seems. The Commission in its first year seemed in permanent crisis–not to worry, it got much worse in the second year. When the first land sale auction in 1791 failed miserably, a second one was scheduled for a year later.

That meant 1792 revenues into the project were minimal and a new financing strategy had to be considered. Beginning in late 1791 the Commission, on the invitation of Washington himself, began to flirt with using “developer financing”, i.e. contracting with a private developer who agreed to raise his own funds in return for contracts and incentives that provided some hope for cash flow to the Commission, and which promised further construction and development in accordance with a schedule that if everything went right would meet the project timelines. The developer (Samuel Blodget), referred initially by Washington (probably desperate and in the midst of other presidential problems) likely without any real diligence on the developer’s bona fides, proved creative, resourceful, persistent, and tried to raise the funds using a less than honest sales programs and pitches, unusual financing devices (a lottery in which people “won” a lot for the price of their ticket), and ability to raise a $500,000 loan from his Rolodex of Boston/New York investors. Blodget promised a small amount of his own money. As collateral Blodget was authorized to use the Commission’s unsold lots. He promising cash flow injections to the Commission every three months, and in return was appointed to a “superintendent” position in the Federal District from which he could involve himself in project management and implementation.

Blodget was a man Washington knew only slightly–he had served as his aide in the Revolutionary War–and had s bit of a promising track record in real estate. Bordewich describes that at the time Blodget was perceived  as a man “who inspired great confidence“, “a man of big ideas“, “a man who got things done“, “a sort of Donald Trump of the 1790’s” [99] Bordewich, the Making of the American Capital, p. 95. In another words, hang onto your wallets. Through no fault of his own, the timing of his financing initiative couldn’t have been worse. The stock/bond market collapsed, the first in our Early Republic (March 1792), caused by bubble speculation that followed the selling of shares in the newly-approved national bank and the goings on of William Duer (there must be a song about that in the Broadway Play, “Hamilton“–but I don’t remember hearing it). Nothing worked out as scheduled or planned in the Blodget scheme. Ellicott, the Commission’s new CEO, 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.

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.

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..

Desperately 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. Jefferson was heavily involved in the design competition, not Washington, and it did not go smoothly–but it did proceed from a rather poor bidding process onto the awarding of contracts. Accordingly it did stir up public relations “dust” that kept the dogs at bay and suggested that some positive momentum existed.

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. 98ff. As Bordewich has certainly described, slave labor increased as the project ran into difficulties and finances worsened. The plight of the slaves was intensified as more stress was placed on them to continue, unpaid, and poorly fed, to put in street infrastructure and initial building construction.

In any case, Blodget was by this time in the Spring and early Summer of 1793, still around (he had been formally fired back in December 1792), and had been forced into his “Plan B”, and trust me, it was not a pretty one. This is where the lottery came in, along with a great hotel, and collateral material that embarrassed everyone, including Washington. On the road with sales pitches, Blodget was not to be seen on site or performing his superintendent’s functions (perhaps a benefit in disguise)–and despite numerous efforts to rein Blodget in, from Commission and Washington, he was a really public embarrassment to the Washington D.C. project. The only thing which saved the project in these days was state grants and the design competitions for the Congress and White House  Washington’s terse comment during this period sums up the Blodget as developer period: ” It was unfortunate that we ever had any connection with him in any way”  [99] Bordewich, Making of the American Capital, pp. 153-6, p. 168-9.

In this most desperate of times Washington reverted back to one last attempt to generate land sale revenue at a third auction in mid-September 1793–which would overlap with the laying of the cornerstone for the Congressional Capitol. Washington, again on the scene devised what in his mind was the event of events designed to lure participants, generate much needed positive publicity, and in general drum up support for the project. As described by Bordewich, Washington descended from his marble pedestal and put on his best Mason garb (Washington had been a Mason for 37 years, and was Grand Master of the Alexandria Lodge for five), wearing an ornately embroidered apron given him by Madame de Lafayette) and he brought out for public display his inner “First Wave booster-huckster” best behavior by “Crossing the POTOMAC” in a boat, and then, the President sitting on a horse, personally headed a parade with two brass bands plus the Alexandria Volunteer Artillery (they didn’t have fire trucks back then), a bunch of Masons in costume, down what today is Pennsylvania Ave, leading to the Capitol cornerstone ceremony, in which floats carrying the Bible on a satin cushion, a ceremonial sword, the artillery fired its cannons in salute, much speechifying, the descending into the trench to lay the cornerstone and an functional equivalent of a time capsule (gifts and sacrifice).  and treated attendees to a barbecue of a five-hundred pound ox [99]Bordewich, the Marking of the American Capital, pp. 149-52.

The auction BTW was no more successful than the first two.

If nothing else it was clear by September 1793 that a miracle was needed, that land sales would not provide anything close to needed revenues, and if money was to be found, there it had to be raised by and from the private sector–and that the Washington D.C. project had better find a competent and proven real estate developer to contract with to raise his funds, and to turn over funds needed for cash flow to build the public buildings and infrastructure that would create “a there” “here” so that people would actually want to move in and buy a lot and build something on it.

Enter Robert Morris

If the reader remembers the politics associated with the Residency Act, Robert Morris, then a Senator from Pennsylvania, was the most vociferous advocate for Pennsylvania and Philadelphia as the permanent national capital. Only after being outmaneuvered politically, by Madison among others, and led down a blind alley by Hamilton (that’s not in the Broadway Play either), had Morris finally settled on a compromise which Philadelphia continued for the ten years until 1800 to be the nation’s capital–and which would presumably continue in that role if Washington D.C. was unable to finish construction of the Capitol, White House and other public buildings as required by the Residency Act. There was nobody that could potentially benefit more from the failure of the President’s project, than his allegedly BFF the wealthy financier, and allegedly richest man in America and financier of the American Revolution, Robert Morris.

Five days after the parade, cornerstone laying, and barbecue and third auction, a certain James Greenleaf arrived to meet the Commission bearing a letter of recommendation from President George Washington: “He has been represented to me as a Gentleman of large property, and having the command of much money in this Country and in Europe. I have reason to believe that if you [the Commission] can find it consistent with your duty to the public to attract Mr. Greenleaf  to the federal city, he will be a valuable acquisition” [99] Bordewich, the Making of the American Capital, p. 156. It seems he was hire almost on the spot.

Greenleaf was a virtual epitome of the nation’s swaggering postwar commercial spirit; fiercely determined, irrationally optimistic, risk-taking, vast in his ambition, and eager to profit. On paper, at least. he was one of the most successful financial men in America. Radiating charm, he dazzled every one he met. Only thirty-two years old he had already amassed a fortune in transatlantic shipping and  won the trust of key Dutch banking firms, through which he had already successfully negotiated major loans for the United States government … [America’s] consul at Amsterdam … married to a Dutch baroness [99] Bordewich, the Making of the American Capital, pp. 156-7.

Within two days Greenleaf made clear he and two other partners (a John Nicholson, Pennsylvania most prolific developer, an exceedingly powerful and pervasively influential political actor, and then the state’s Controller-General–and our Founding Father, Robert Morris). What an assemblage of wealth, success, and power these three represented–solid, well-experienced financiers and real estate speculators/developers–the best our young nation possessed. The “A” Team had come to Washington D.C.’s rescue.

In a little over five years however, Washington secretly had supper in Philadelphia’s debtor’s prison with Morris. In adjoining cells was Greenleaf and Nicholson. By then each had gone bankrupt, engaged in cover-ups,  been convicted and sentenced. The reader might suspect, there is a story to be told.

The Residency Act did not authorize Washington or the project to borrow funds. It was silent on the matter. That is why the awkward relationship with Blodget had been adopted, and why Blodget tilted toward risky, unconventional financing. With two failed land sales, unsold land did not provide collateral value to even consider a loan. The price of the lot was regarded as low; Washington at least thought so–but reality was that land value had worsened with another third land sale failure. In September 1793, it was not at all clear what the still unimproved land was worth. The new investment partnership, however, as individuals, could access loan-derived capital based on their track records and what passed for 1790’s personal guarantees. The syndicate accordingly purchased seven thousand lots which they would pay off over with annual payments over seven years. Those monthly payments were the cash flow needed for building and infrastructure by the Commission. Thus far, the reader may note, there is no cash in this deal–only paper agreements. The cash would come from bank loans, mostly envisioned by foreign-Dutch lenders, who would place liens on the land/lots as collateral. It was also hoped the syndicate itself could generate interest and sell some land at good prices. To this end they committed to actually build out ten lots a year.

In September 1793 this plan was not a fools game; it did, however, place considerable trust on the syndicate to execute the foreign or domestic loans, and the syndicate despite its paper wealth, did not inject its own funds into the project [1120]. But in 1794, a $780,000 Dutch loan was “approved”, subject to the Dutch bank’s ability to sell participation notes to its various investors. To make that deal, Washington had to consent to a sale of one thousand more lots to the syndicate–and interest derived from interest paid from the syndicate’s ownership of American federal bonds were pledged to the annual loan payment. The interest rate was 6%, not the hoped for 5%, which mean annual payments were higher, and that meant less available to pay the Commission monthly payments. By this point, foreign lenders  were sensing that the individual syndicate investors were stressed financially, and were not willing to place much reliance on their personal guarantees. It seems that only $48,000 was actually funded by investors, drawn down  by the syndicate, and paid to the Commission [99] Bordewich, the Making of the American Capital, p. 177.

Equally troublesome was the seesaw course of the the European world war. It was not evident in 1794 who would prove victorious, Jacobin armies or the continental powers. The war itself consumed much available capital, and limited the pool of investors approachable to the Dutch. Indeed the Reign of Terror which was then ongoing–leading to the execution of Robespierre himself–gave pause to the stability of this early European capitalist economy. It was not at all clear at this point that Washington’s Act of Neutrality could hold up, and the fear was America also would be drawn into the war–and that for America and its economy was a very risky matter. The dependency of the American financial system on foreign direct investment is now becoming woefully apparent as it undermines the implementation of America’s signature public project: the building of its national capital. In any event, the Dutch banking firm was unable to find sufficient buyers of the American-backed notes to close the approved loan–and the matter lingered on throughout the entire year (1794). By the end of the year, the Whiskey Rebellion and the Citizen Genet affair, along with Washington’s retirement and the partisan-divide in American elections further reduced the credit-worthiness of the American syndicate. It may not be the way it is taught in American textbooks, but viewed from abroad America was going to hell in a handbasket.

On top of this the syndicate was slowly imploding economically and politically, riven by internal disputes and the absence of what today is called “liquidity”. The syndicate’s wealth existed largly on paper–which is why they injected little to nothing of their equity into the D.C. project. The reason was that much of American domestic capital accumulation was “paper”; profits were made, the proceeds were further invested in new projects and new debt. New projects were dependent on cash flow from older projects. The structure of American finance capitalism at this point–as far as this syndicate was concerned at least–was way too dependent on a series of land accumulation and land sales booms generated, leavened by Morris’s Chinese enterprise (China did not open itself to foreign trade until 1840). When disrupted, as inevitably the new projects became larger, the whole complex web of finance structures came tumbling down, project by project, court decision by court decision, domino by domino. The monthly payments to the Commission, with one successful enterprise (a $60,000 loan, collateralized by 864 lots, from an American bank headquartered in Georgetown founded the year previously), were never forthcoming–and the D.C. project slowed down to a crawl.

What had transpired during this period was a combination of dynamics that fed on each other and brought about the demise of the investment partnership. The two key environmental dynamics were the impact of a European world war on global finances and lending and the a “pedal-to-the-metal” land sales speculation whose excesses fueled debt and real estate bubbles–and what can best be summarized as corruption, back-handed deals, interlocking investment structures that constituted little less than an organizational Ponzi or pyramid scheme that collapsed upon itself. Enron couldn’t have done it better than this partnership. At one point Washington himself wrote to Morris cautioning him that his recent China trade investment was one bridge too far. Morris wrote back “I can never do things in the small; I must be either a man or a mouse” [99] Bordewich, the Making of the American Capital, p.160. It would seem in hindsight that Daniel Burnham’s 1910 “Make no little plans” advice could be successfully applied to planning; it, however, proved to be horrible advice applied to 1790’s financing.

The partnership’s execution of the original investment plan continued through 1795–with only one key, if tangential success that brought in enough funds to sustain operations in 1795. In late 1794, a private investor, a wealthy English philanthropist Thomas Law, recruited from India by Greenleaf, bought 445 lots at $293 apiece (known today as Greenleaf’s, or more commonly Buzzard’s Point where the National War College is presently located)–an incredible sum–in cash. His intention was to set up an American equivalent of the British East India Company in D.C., found the Washington D.C. university proposed by George Washington in an Annual Report. That $133,000 was the cash flow for 1795 to the Commission. But at no point did the investment plan jell; by 1796 the partnership ruptured as one partner at a time started his individual spiral down the slippery slope of personal bankruptcy. Whatever. The land sales to Law brought comfort, albeit temporary, to the President who wrote “The business [Law’s land sale] I conceive is now fairly on its legs” [99] Bordewich, the Marking of the American Capital, p. 174.

By 1796 it was evident to Washington, the Commission, and astute observers that the D.C. project was again in crisis–this time one that promised to be fatal. George Washington was in the last year of his second administration, and he would not run for a third. The situation of the project itself was dismal. As described by Bordewich: “The Commission had only $7,000 in their treasury. They had nothing to show for the tens of thousands of dollars spent on the Capitol (the building), except muddy trenches, and a shoddily built foundation”. The Syndicate by that point owed the Commission about $1.1 million (estimated by Bordewich as $41 million in 2016 dollars) [99] Bordewich, the Making of the American Capital, p. 177. It is worth note by the autumn of 1795 the first floor of north wing of the capitol was completed, and that by the first of December of that year, construction on the White House”was so well the walls were within a few feet of the eaves” [99] A History of the National Capitol, Vol 1, p. 259. However, It was also evident by that time that the Syndicate’s collapsing series of organizations was likely to take the syndicate and the Washington D.C. project into its morass. To avert being caught up in the now very public scandal, Washington pressured and pleaded with Morris, writing that a bankruptcy would bring construction to a a halt and “throw a cloud over the public & private concerns of the City as to give it a vital wound” [99] Bordewich, the Making of the American Capital, p. 183.

Having reported this, on balance, rather discouraging assessment of the development/construction progress within the Federal District, the A History of the National Capitol, Vol 1, provides serious evidence that noticeable private investment had materialized by 1795. As early as 1792 and again in 1793 two state-chartered banks had commenced operations in the District. In particular, the waterfront area had witnessed ongoing warehouse, wharves and pier development (including a warehouse owned by Washington’s former personal secretary, Tobias Lear, who formed a corporation and took residence in the District. The syndicate investors had also developed wharves and other enterprises in the waterfront area, as had a serious D.C. investor Mr Barry, and Notley Young. Thomas Law also developed several projects in the waterfront and in other sections of the District. By 1795, the Great Hotel project was sufficiently competed to open for business, and the infamous Samuel Blodget paid $2,000 in cash, and $14,000 in acceptable notes to bring the Commission on board. (p. 260) The crisis the Commission faced, I sense, was less that the project was unable to foster serious private investment in the District, investment that promised both residential and economic-base building, but that its cash flow crisis had sharply curtailed construction on the public buildings required by the Residency Act to be completed by 1800. These were indeed in crisis–and were the source of President Washington’s chief concern at that time.A History of the National Capitol, Vol 1, pp. 246-50

The President had to find a solution for the project to go forward under new leadership. That meant coming to terms with the original sin incurred by the Residency Act: the lack of federal funds and commitment to the project. It started with Washington formalizing his desire to develop a Washington D.C. university. He had donated, in January 28, 1795, a personal gift of fifty shares in the Patowmack Canal Corporation, then of considerable value (the stock sold for $444 per share, and he estimated it would throw off 1,500 pounds interest each year). The Commission shortly located a site, which a year later Washington approved. In November 1796 the project was included in the Commission’s submittal to Congress [99] A History of the National Capitol, Vol 1, p. 251, p. 253. In 1796, an original commissioner, Daniel Carroll, of age and alleged bad health retired, and was replaced by a new Commissioner, the former Congressman from Virginia, Alexander White, who had cast the deciding vote in favor of the 1790 Residency Act–and a Patowmack Canal shareholder.

With his ducks in a row, Washington listened to James Madison address Congress in February 2, 1796 proposing in essence  direct federal funding for the development of the Federal City [BTW, the reader should be alerted that by this time Washington and Madison–Jefferson’s second-in-command–were bitter partisan and personal enemies]. Bordewich describes the proposal as a “bailout”, asserting that if Congress had known and been appreciative of the true goings on over the past five years, “it might have shut it down … dealing a devastating defeat to the president and refueling regional rivalries [99] Bordewich, the Marking of the American Capital, pp. 202-3. Newly-appointed Commissioner, former Congressman White was detailed to counter changes from Pennsylvania representative that substantial sums had already been spent on the buildings, with little to show for it. White did not deny the change, but instead countered that without direct federal funds the construction on the public buildings would halt by that summer. Madison to avert this cession of construction proposed a sum of $500,000 be made available to compete the construction on the public buildings.

By this time it was clear that in a deeply polarized Philadelphia, many northern Federalists saw the D.C. project as a “southern, “arguably Democrat-Republican affair, and the President was relying on loyal Federalist allies and southern D-R votes. Like the 1790 Residency Act, the votes were lined up through a compromise with another controversial bill, the Jay Treaty with England. Southerners, hating that treaty voted for it in return for northern votes on Madison’s proposal [99] Bordewich, the Making of the American Capital, p. 205. On March 31, 1796 by a vote of 72-21 (the House) approved $300,000 in public debt, to which the Senate, 16-7 approved a month later. At that point, Bordewich asserts the Commission’s treasury held a mere $1,300 (p. 206). To overcome obvious cash flow issues and to take advantage of the construction season (who would think a Washington D.C. summer was viewed as best for construction?), the Bank of the United States agreed to provide $10,000 per month for the next four months. From this point on Bordewich describes the President in terms of being a micro-manager of the project. Involved in nearly every detail, he prodded the Commission into total involvement and diligence. Eventually, he suspended all construction, other than the Capitol Building itself–which was the the crisis point of the public building situation. On March 21, 1797, George Washington turned over his keys of office to the new President, John Adams, and headed off to retirement at Mount Vernon.

Adams, as events turned out, was no huge supporter of the D.C. project. He neglected the affairs of the Commission, more than oppose them. One Commissioner sent a letter to former President Washington observing the new President “shewed an uncommon degree of Warmth [anger], [saying] he shouldn’t make himself a Slave to the Federal City; that he would do what his official duty required and no more” [99] Bordewich, the Making of the American Capital, p. 211. To deal with Adams, the Commission increasingly went through George Washington  who Bordewich describes as becoming the “godfather to the city whose birth he had midwifed … He would make it live if it was–and it virtually would be–the last thing he did”. Thomas Law, who had by this point married Washington’s step granddaughter was his eyes and principal contact–and Alexander White served that role in the Commission and Congress. His communications to the Commission, which bordered on instructions and approvals, were constant and numerous–and crossed into nearly every matter of note, a a great deal of lesser importance [pp. 212-3]. Constantly he pressed for activities that offered the potential to recruit residents.

Washington by 1798-9 knew more funds were needed from Adams and the Congress, and he successfully pushed the approval of a second $300,000 financing to the Commission. There would be more to follow in 1801 and 1803. But six months previous to his last day in office, John Adams and Abigail moved into the White House in 1800–as did Congress– and in 1810, when the new President, our third, Thomas Jefferson settled in, his residence was also the White House.