CHAPTER SEVEN

BUILDING A NATIONAL ECONOMY: WASHINGTON’S FIRST TERM

IF WASHINGTON EVER HAD A SLEEPLESS NIGHT IT WAS THAT of April 15, 1789. On the previous day Charles Thompson, secretary of Congress, had arrived at Mount Vernon to inform him of his election as president of the United States. The news was not unexpected. Anticipating the heavy expenses that would attend assumption of high public office—for which he of course refused to accept a salary—Washington had been struggling for months to get his personal finances in order. It was a frustrating process, for though his assets were substantial he remained cash-poor thanks to continuing expenditures, weak crops, and an unstable currency that dissuaded him from selling land to raise funds. In January he had borrowed £500 in state currency at 6 percent interest—the first and last such transaction of his life. As he stepped into his carriage at ten o’clock on the morning of April 16, the president-elect’s mind was “oppressed with more anxious and painful sensations than I have words to express” as he contemplated leaving his “peaceful abode for an Ocean of difficulties.”¹

Willfully banishing self-doubt—a mental discipline he had practiced until it became a habit—Washington pondered the nation’s future. The crowds he encountered on his journey focused his priorities. In Baltimore, the city’s leading citizens exhorted the new president to place the “public credit on the most solid foundation” and expressed hopes that “under the administration of a Washington the useful and ingenious arts of peace, the agriculture, commerce, and manufactures of the United States will be duly favored and improved.” In Wilmington, the Delaware Society for Promoting Domestic Manufactures threw a party and addressed him along the same lines, prompting Washington to respond that “The promotion of domestic manufactures will, in my conception, be among the first consequences which may naturally be expected to flow from an energetic government. . . . I propose to demonstrate the sincerity of my opinion on this subject, by the uniformity of my practice, in giving a decided preference to the produce and fabrics of America.” In Philadelphia, Trenton, and finally New York City, the tone was the same—pomp and celebration alongside a hard-headed commitment to business.²

Public praise improved Washington’s mood, helping him to recover the optimism he had felt in the wake of ratification. With the Constitution in place, he believed that Americans’ native talents would come to the fore in building an industrious “Land of freedom.” The government’s role was to establish the conditions conducive to prosperity. The people—rich and poor, native and immigrant—would create the wealth. “I really believe that there never was so much labour and economy to be found before in the country as at the present moment,” he had written to Lafayette on June 18, 1788. “If they persist in the habits they are acquiring, the good effects will soon be distinguishable.” The process was already under way. The people, Washington told Jefferson on August 31, 1788, “are emerging from the gulf of dissipation & debt into which they had precipitated themselves at the close of the war. Œconomy & industry are evidently gaining ground. Not only Agriculture, but even Manufactures are much more attended to than formerly.”³

Always keen on symbolism, Washington had long pondered how he should appear at his inauguration. In January 1789, he read a newspaper ad by the Hartford Woolen Manufactory. The firm’s owners, who had served under him as commissaries during the war, encouraged Americans to wear suits made from their fabrics, such as “Congress Brown,” as an act of patriotism. As a “PASSION for encouraging American manufactures has at last, become fashionable in some parts of our country,” one of their promoters declared, the president, vice president, and members of Congress “should all be clothed in complete suits of American manufactured cloth” on inauguration day.⁴

Washington caught the trend and ordered a suit of “American Broad Cloths” for himself and a riding habit for Martha. Unfortunately, despite subsidies and tax breaks from the state of Connecticut, the Woolen Manufactory was not very efficient. Although Washington appeared at the inauguration “dressed in deep brown, with metal buttons, with an eagle on them, white stockings, a bag, and sword” (according to most accounts; one observer said he wore a “suit of black velvet”), the ensemble apparently did not originate from Hartford. Washington would visit the manufactory on his trip to New England in October 1789 and concede that its products were “not of the first quality.”⁵

The question of what he should say at the inauguration was more complex. Washington agonized over his speech for weeks, working alongside his secretary David Humphreys to prepare a seventy-three-page draft. It was probably just as well that he did not attempt to read it at the risk of trying his listeners’ patience. The now-fragmentary document nevertheless revealed his thoughts about America’s future as he prepared to take the helm. His mind dwelt primarily on one topic: the economy. Beginning with a history lesson, Washington summarized the struggle for independence by recounting the shortage of “Money, the nerve of War,” the creation of a treasury “from nothing,” and the “load of debt” it left behind. The war also exemplified the intersection of public enterprise and private morality. “The fluctuations of and speculations in our paper currency,” he believed, had “occasioned vague ideas of property, generated licencious appetites & corrupted the morals of men.” He would bring up the subject of a moral economy again, more sweepingly, in the final version of his address.⁶

The draft address moved on from the past to lay out his vision for the road ahead. The country’s future ultimately was industrial, but the transformation would take generations. “We shall not soon become a manufacturing people,” he believed. Although the population would boom (as he accurately predicted), creating an abundance of labor, men would prefer working farms over manufacturing so long as the continent’s vast land resources lasted. With that in view he saw no value in a crash course of industrialization. Instead, Americans should “continue to exchange our Staple commodities for the finer manufactures we may want, [rather] than to undertake to make them ourselves.” Nevertheless, he thought that products such as “wool, flax, cotton, & hemp” and “leather, iron, fur and wood may be fabricated at home with great advantage . . . Especially by the introduction of machines for multiplying the effects of labour, in diminishing the number of hands employed upon it.” Agriculture, then, must be the primary focus—but always with an eye toward the coming days when America would both serve as the world’s breadbasket and stand proud as a manufacturing giant.⁷

Government’s role in all this, as he had already written to Jefferson and others, was that of facilitator. By “regulating the coinage & currency of money upon equitable principles as well as by establishing just weights and measures upon an uniform plan,” for example, the government could help “make men honest in their dealings with each other.” Officials could also “as public or as private men” enlighten the multitudes by working “to improve the education and manners of a people; to accelerate the progress of arts & Sciences; to patronize works of genius; to confer rewards for inventions of utility; and to cherish institutions favourable to humanity.” An enlightened electorate would simultaneously buttress the state and, by its industriousness, build the foundations for its prosperity. Most of these lofty goals, though, would remain unspoken on inauguration day.⁸

Washington took the oath of office on April 30 on the balcony of New York City’s Federal Hall. He then retired to the Senate chamber to deliver his inaugural address. An attack of nerves made him mumble and fidget. Fortunately he had reduced his address to a fraction of its original length. The details he loved so well were gone, replaced by generalities. Of money he had little to say, except that he would refuse to accept a salary and asked only for reimbursement of his expenses (he did, however, endorse salaries for senators and congressmen).

But one primary theme remained from the discarded draft. This was morality, and its place in the success of the great American experiment. Nature itself ordained morality, in Washington’s worldview, and it fueled the work ethic of enlightened people left free to pursue their interests. They would inevitably be industrious. In turn, their industry promoted private virtue even as it generated wealth. The process was self-sustaining; government need only clear the stage. Such was Washington’s meaning when he declared hopefully that “the foundations of our national policy, will be laid in the pure and immutable principles of private morality” and “that there exists in the oeconomy and course of nature, an indissoluble union between virtue and happiness.” These were the principles that would inspire his conduct as president.⁹

Washington would need inspiration in plenty, for the challenges facing him were great. The Constitution set the framework for the new Federal Government, but many of its definitions were vague. Presidential powers, which Washington carefully underlined and bracketed in his printed copy of the document, remained indistinct. To a degree the new president would define them himself, just as he helped shape the government by setting precedents for its future operation.

As president, Washington knew that he had to set a constant public example. Everything he did would be scrutinized and emulated. His many charitable donations, for example, were regularly published in the newspapers. When he made a small contribution in January 1791 to a charity providing for Philadelphia’s poor, he told his secretary Tobias Lear to let it be known that such publicity was “not agreeable to the President,” but of course the newspapers ignored him as he knew they would. The example of charity was deliberate, but he avoided ostentation.¹⁰

Nothing worried Washington more than identifying the right people to staff his Cabinet (not yet called by that name). In the helter-skelter of creating the government, there had been no time to fix upon candidates in advance. For months he had to carry most of the administrative burden on his own back. The biggest burden was in the realm of finance where, lacking a designated secretary of the Treasury, he had to confront the nation’s dangerous problems head on.

Congress, still debating whether it alone should set economic policy, or leave that to the executive branch, established a Treasury Department on May 21, 1789. This at least was a positive step, and the president followed it up by writing on June 8 to the three-man Board of Treasury demanding “a full, precise and distinct Idea of the various transactions arising under it,” along with an outline of its powers under the new Constitution. The Board replied with multiple lengthy reports that Washington perused line by line.¹¹

The Board’s massive report of June 15 on domestic and foreign debt stunned Washington. The nation’s total domestic debt, he learned, was $27,383,917.67. Its foreign debt, arising from war loans from France, Spain, and Holland, was $10,070,307. These totals were exclusive, however, of substantial interest. On domestic debt alone, the interest arrearage due to be paid to 1789 was $11,519,646. Trivial figures today, they amounted to a crushing burden for a new nation just emerging from years of war and weak government. And they were getting worse. Overall, national debt with interest due rose from $39 million in 1783 to $53 million in 1790, alongside another $25 million in debts owed by the states.

Spending long hours hunched over his desk, Washington compiled lengthy notes summing up the debt problem. It originated, he wrote, in the war and the inherent weakness of the Confederation system. And while the reformed Constitutional government was more efficient, its inherited fiscal difficulties might prove insuperable. “For this large balance of public paper,” he observed, “there is no reason to presume that funds in the least adequate have been provided by the several States.” As he tabulated it, in 1786 alone no state had provided a penny to service the national debt, and the total due from the states to the government was $7,003,725. “Hence it appears,” the president continued, that “there never has been a disposition at any one period, in a majority of the States, to collect Taxes; notwithstanding the easy & advantageous terms on which such payments might have been made.” The Continental Congress had attempted to tackle the debt back in 1783 by imposing an impost, but the measure never came into effect and the states had continued to service—or not—their domestic and foreign debt by their own methods.¹²

Taking due account of the president’s observations but still uncertain how to proceed, the Board could only recommend that the states be required to pay their debts by installments in specie rather than paper money; it also proposed shell games such as transferring French debt to Holland. There, though, the board members also ran into the problem of what to do about invisible debts arising from secret aid that the French had supplied before their formal intervention in 1778. American and French government accountants even bickered over a “lost million” of secret debt, creating a controversy that would entertain lawyers well into the nineteenth century.

Average Americans knew little about the national debt. Many of them were just struggling to get by. In his first weeks as president, Washington was nearly smothered by applications for office and pensions accompanied by hard-luck stories of personal fortunes destroyed by wartime dislocation or worthless currency. Some came from war widows with destitute children. Washington’s own foresight in sinking his wealth into stable assets like land had shielded his estate from disaster, but he knew many others who had not been so prudent or lucky. To them he was generous in his charity, drawing on his own limited resources to assist the needy. Restoring national confidence was both more difficult and more important. Just as he had during the war, though, Washington realized that he could play a potentially decisive role in creating a mood of optimism and trust in the national government that would help steady the currency and foster conditions conducive to growth.

Establishing the public credit was the president’s number-one priority. The initial steps toward achieving this were obvious if not easy. The first thing was to dispense current obligations and place the government on a sound fiscal footing. One of Washington’s first acts as president was to ask Congress for new excise taxes and tariffs to service interest payments. The Tariff Act of 1789 imposed duties—to be collected by a new customs service—on various imports, especially manufactured goods. This of course benefited domestic manufacture even as it buttressed public faith in the government’s ability to fund the debt. The move also reassured foreign creditors already encouraged by news of the establishment of a stable national government under Washington’s leadership. In an August 1789 memorandum concerning negotiations for a new loan from Holland, Washington observed how the efficient operation of the “New Government, has given great strength & stability to our Credit” and had “the most certain & solid effects” on Dutch “Gentlemen Bankers.” His reputation abroad as a man of prudence and business also had an impact.¹³

However sterling Washington’s reputation and however correct his goals, they alone could not suffice to put the nation on the right track. He needed the right people to execute his vision—everyone from Cabinet members to consuls and revenue collectors. He even had to appoint lighthouse keepers. For every position there could be dozens of names to vet. For secretary of the Treasury, the choice seemed obvious: financier Robert Morris, who had worked so heroically to stabilize the currency in the latter days of the Revolutionary War. Morris, though, declined the post, suggesting Alexander Hamilton in his place. Washington liked Hamilton, but knew that selecting him would court controversy. Though undoubtedly brilliant, Hamilton also was a lightning rod. Anyone standing by his side would likely get burned.

Born out of wedlock in the West Indies, probably in 1757, Hamilton was orphaned at an early age and made his living working for a mercantile firm trading between New England and the Caribbean. He came to North America to finish his education in 1772. During the war’s first stages, he commanded a company of New York provincial artillery before becoming one of Washington’s many rotating aides-de-camp in 1777. The general did not necessarily favor all of his aides and secretaries. Most of them subsequently faded into obscurity. Hamilton, though, stood out for his intelligence, efficiency, and charisma. He could also be fiercely—if not, as it turned out, consistently—loyal. During the Valley Forge winter crisis of 1777–1778, he served as Washington’s hatchet man, leading the drive to isolate and defame detractors such as Thomas Conway and Horatio Gates, and helping to cement his master’s place at the head of the army. Inevitably, Hamilton and Washington—both headstrong men—fell out. In February 1781, Hamilton resigned from the general’s staff in a huff after the two had a heated exchange over minor punctilio. The two eventually made up, however (an unusual instance among Washington’s frequently long-lasting feuds). At Yorktown, Hamilton was awarded a leading role in the victorious assault on British Redoubt No. 10.

Just before his tiff with Washington, Hamilton’s name had come up in connection with the Minister of Finance post that the Continental Congress eventually awarded to Morris. Since then he had applied himself to the study of economics and finance. Washington was most impressed by Hamilton’s authorship, with James Madison and John Jay, of the Federalist Papers in 1787–1788. Hamilton regularly sent his installments of the Papers—written under the pseudonym Publius—to Washington, who promised that they would hold “a most distinguished place in my library” and “merit the notice of Posterity; because in it are candidly discussed the principles of freedom & the topics of government, which will be always interesting to mankind so long as they shall be connected in Civil Society.” This work helped to temper Washington’s concerns about Hamilton’s prickly personality and proclivity for making enemies.¹⁴

On March 24, 1789, amidst the hurry of preparing to assume the presidency, Washington opened a letter from an anonymous correspondent warning him to “beware of the artful designs, and machinations of your late Aid de Camp; Alexander Hamilton; who, (like Judas Iscariott) would for the gratification of his boundless Ambition, betray his Lord, and Master.” Though making no outward comment, he filed the letter carefully away among his papers. Many others at one time or another maligned Hamilton’s character. The important thing for Washington, though, was that Hamilton both was intellectually talented and shared his sense of how to solve the debt problem, ensure fiscal stability, and foster prosperity. As president, he was not looking to turn the ship of state over to a new captain. He wanted a man who would stand at the helm by his side.¹⁵

No shrinking violet, Hamilton clearly wanted to be secretary of the Treasury. For his part, Washington could not afford to postpone addressing the nation’s diverse economic challenges. He wasted no time in nominating Hamilton for the post on September 11, 1789, along with Nicholas Eveleigh of South Carolina as comptroller, Samuel Meredith of Pennsylvania as treasurer, and Oliver Wolcott, Jr., of Connecticut as auditor. Congress confirmed all four within the next couple of days, and the president immediately put them to work. That they had much to do became obvious with the number of employees they had to hire—three dozen, eventually, far more than any other government department.

Washington was not in the habit of allowing anyone who worked for him to operate independently. As a military and civilian leader he often micromanaged his subordinates, and at the very least he set specific goals and conducted thorough reviews. This principle operated independently of personal trust. Friends, family, and colleagues alike bore his watchful gaze. The more important their work, the more likely he was to look over their shoulders.

Hamilton, too, labored under steady oversight during Washington’s first presidential term. There were no Cabinet meetings. The president did, however, consult with each of his deputies frequently, sometimes through formal written reports but more often in lengthy personal conferences. Some, like Jefferson, kept extensive written records of these conversations. Others did not. In any event, even though there is no extensive written record of the president’s consultations with Hamilton, there is no reason to believe that Washington—always a stickler at punctilio—treated his secretary of the Treasury any differently during his first term (the second term was different, as we shall see). Had he displayed any such favoritism, it would have caused immediate friction.

Busy as a mole for three months, in early 1790 Hamilton began churning out a series of extremely important reports to Congress on public debt, a national bank, a national mint, and manufactures. The reports were his own, but were inspired by the president’s economic vision. The first, submitted to Congress on January 14, was the most important and iconoclastic. Its central idea was that the government should not exert itself to pay off all its domestic and foreign obligations entirely and immediately. Instead, it should finance its debt by regularly paying off the interest on loans but borrowing, at least in the short term, to repay principal. This conceded a more or less permanent or revolving debt, but also helped to establish the government’s domestic and international credit by reassuring creditors that it would reliably discharge its obligations. Federal bonds would come to be regarded as secure investments. The proposal also engaged American investors to realize that their prosperity depended on the health of the government, and vice versa—creating one of those communities of interest of which Washington was so fond. To fund debt payments, Hamilton proposed import tariffs and duties on distilled spirits, among other taxes.

Even more controversially, Hamilton argued that the federal government should assume responsibility for all state debts. Virginia had discharged its own debts faithfully, while states such as South Carolina and Massachusetts had not. All, however, would have to bear an equal responsibility for paying them off through the new program. Washington and Hamilton both knew that this idea would be divisive. They could also have predicted the repercussions of the Treasury secretary’s further proposal that all government securities should be fully redeemed at face value. No one was more aware than the president that many of the soldiers who originally owned these notes had sold them off for a pittance long before, believing with good reason that they would always be worthless. The speculators who bought them would now reap the reward. However, two vital principles would be established: that government notes held consistent value and that investors had a right to profit from the securities market.

At this critical moment, sickness and overwork threatened to end the president’s life. Rushing back and forth between offices to put out bureaucratic fires, wading through masses of paperwork, wrestling with irate congressmen, and shooing away importunate office-seekers in early April, Washington’s legendarily robust health began to weaken. Observers noticed a flush to his cheeks and that he had lost weight. Ignoring friends’ advice that he consult a doctor, the president adjourned to Long Island later that month and spent a week riding about the countryside with only a small entourage. The exercise helped for a little while, but after returning to the city he contracted an ear infection and temporarily lost most of his hearing. The illness turned out to be influenza. In mid-May he was totally bedridden, wracked with fever. Doctor’s treatments, including liberal doses of “James’s Powder,” were useless, and by May 16 the doctors confessed they had “no hopes of his recovery.” Spitting blood, hiccupping, and rattling in the throat, he seemed near death. Unable to bear the sight, Martha fled the sickroom.¹⁶

Incredibly, Washington recovered. Within a few days he was sitting up in his easy chair, trying his caregivers by fretting constantly about the national debt. By late May he was cleared to return to business, but only gradually; a three-day fishing trip to New Jersey in early June helped to complete his convalescence so that he could again take charge. His first full days back at work must have left him yearning for his sickbed. Foreign debt was looking especially worrisome as the frustrated and cash-strapped French ostentatiously prepared to sell off their American debt to speculators. Fearing the devastating impact that this measure would have on the government’s international credit, the president directed American bankers in Amsterdam to negotiate an emergency loan of 3 million florins from the Dutch to begin repaying principal on French debt. They successfully concluded the deal, and Congress approved ex post facto. On other matters, though, the delegates came around only slowly. They approved most of Hamilton’s proposals on debt in the summer of 1790, but pushed back on securities and the assumption of state debt.

Hamilton refused to wait for Congress to resolve its divisions before pressing ahead with the next stages of his economic plan. The president also was impatient to establish a coherent policy, however much strain the effort put on his shaky health and the untested political system. On December 13, 1790, Hamilton submitted to Congress his Report on a National Bank. Just six weeks later, on January 28, 1791, he tendered his Report on the Establishment of a Mint. The proposals contained in both reports aimed at stabilizing the currency, establishing public credit, and creating a secure environment for investment.

Capitalized as it eventually would be at $10 million, the National Bank would establish a system of currency and exchange that could respond flexibly to the economic climate rather than to state politics. It would serve as the government’s lender of first resort, and as a depositor for federal funds. The Bank also could issue bonds as currency usable for paying taxes and redeemable as specie. This in turn would encourage investment and inject wealth into the economy as capital became available for investment. With the establishment of a mint, the appearance of standardized gold and silver currency, and the circulation of specie in dollars would further stabilize exchange and build national credit. These would encourage further specie circulation, eliminating the cash-scarcity that had long hindered growth. Building mobile capital would invigorate an economy still struggling to overcome a history of colonial dependence and wartime dislocation.

At first, the proposals made progress. A bill incorporating subscribers to the Bank was introduced in Congress on January 3, 1791. The Senate passed it on January 20, and the House debated and then approved it by a vote of 39 to 20 on February 8. The president found it on his desk for signature six days later. Derided though he sometimes has been as Hamilton’s cipher, Washington refused to approve the plan immediately. Instead he asked Jefferson, Madison, and Edmund Randolph—no friends of Hamilton’s—for their written opinions. They all replied at length that they thought the Bank was unconstitutional.

Concerned, Washington passed their letters on to Hamilton for his response and meanwhile asked Madison to prepare a veto message in case he rejected the bill. The president then conferred extensively with Madison, who argued that the Bank was not only unconstitutional but also benefited a small number of wealthy New England speculators rather than the public. Madison recalled that Washington “listened favorably” to his views “without committing himself in any manner,” but that he clearly had doubts. “The constitutionality of the national Bank, was a question on which his mind was greatly perplexed,” Madison remembered. He believed in the “utility of the establishment” and was disposed “to favor a liberal construction of the national powers”; but on the other hand he knew that many of the state conventions might not have ratified the Constitution if they thought it would authorize the government to assert such a powerful role in the economy.¹⁷

As his investigations continued, the president’s mood turned increasingly grave. Madison by contrast relaxed as a veto looked increasingly likely. Hamilton, who had sequestered himself for days to work on his report, finally submitted his “Opinion on the Constitutionality of an Act to Establish a Bank” to Washington on February 23. A thirteen-thousand-word blockbuster, it asserted the authority of Congress to enact broad legislation on the basis of Article I, Section 8 of the Constitution—a concept that later generations referred to as the doctrine of implied powers. Hamilton’s late submission gave the president little time to spare—two days, in fact, under the terms of the Constitution. After perusing the document for several hours, Washington closeted himself with Hamilton throughout the morning and afternoon of February 24. The morning of February 25—the final day—found the president still undecided. With only hours remaining it was looking like the administration’s first political nail-biter. “There was general uneasiness,” John Rutledge, Jr., later recalled. “The President stood on the brink of a pre[ci]pice from which had he fallen he would have brought down with him much of that glorious reputation he has so deservedly established.” Finally, Washington made up his mind. There would be no veto.¹⁸

There was considerably less fanfare about the Mint than about the National Bank—which is not to say it came to pass more quickly or easily. Washington had long advocated “Uniformity in the Currency,” as he had informed Congress in a speech on January 8, 1790. He also was eager to establish a system of uniform weights and measures to oil the wheels of commerce. The president brought up the topic with Congress repeatedly, beginning with the draft of his first inaugural address and continuing throughout his first term. He even expressed strong hopes that “an uniformity of weights and measures could be established upon a proper foundation throughout the several nations of Europe and in the United States” to encourage international trade. Jefferson, meanwhile, performed important work in planning for a national coinage. The president urged him on, determined not to permit any measure that would involve producing coinage overseas.¹⁹

Even after Hamilton’s report on the Mint, however, Congress seemed reluctant to act to establish a uniform currency, let alone a stable system of weights and measures. Just like during the Revolutionary War—albeit now of course with more civil authority—Washington had to act as a catalyst. Fed up with the delays, he lectured Congress on October 25, 1791, about the vital importance of creating a Mint, not least because of “the scarcity of small change, a scarcity so peculiarly distressing to the poorer classes.” That did the trick. Six days later the Senate established a committee to consider the subject, and Robert Morris presented a bill to that effect on December 21. Debate and other delays would prevent Washington from signing it into law until April 2, 1792. His dream of uniform national weights and measures, however, would not be realized during his administration; and his vision of a transatlantic system remains unachieved even today.²⁰

SETTLING THE DEBATES OVER THE DEBT, the National Bank, and the Mint helped to establish fiscal stability. That in turn fostered national harmony, but unity would prove elusive unless Congress and the president could agree on the permanent location of the national capital. Few projects were dearer to Washington’s heart. In June 1790 Hamilton, Jefferson, and Madison met for dinner to strike a deal by which the Treasury secretary would receive approval of assumption of state debts in return for conceding that the nation’s capital would not be New York City, as he had hoped, but be constructed along the banks of the Potomac. For the president the deal was a win-win proposition, and it is hard to believe he had not approved it in advance if not actually suggested it.

By the terms of the Residence Act in July 1790, Washington was left free to choose the site of the city to which the government would move ten years later. That autumn he rather ostentatiously poked around the banks of the upper Potomac to explore possible sites, but by November he had already fixed on the area around Georgetown, Maryland. A proclamation made it official two months later.

The conflict of interest was readily apparent. John Adams later griped that placing the Federal City on the Potomac so close to Mount Vernon raised the value of Washington family lands “a thousand percent at an expense to the public of more than his whole fortune.” The president’s hesitation over Hamilton’s proposal to create a National Bank in New York may even have emanated from fears that the measure would suck the life out of the Federal City. Fisher Ames, one of Hamilton’s allies, boasted that the National Bank would transform New York City into “the great centre of the revenue and banking operations of the nation. So many interests will be centered here, that it is feared that, ten years hence, Congress will be found fast anchored and immovable.” As Ames’s observation implied, however, the president’s personal interests were not the only ones at stake in the capital’s location. Many prominent mid-Atlantic entrepreneurs hoped that the Federal City would serve both as a political center and a commercial hub for western navigation and expansion—a central element of Washington’s plan to bind east and west into a united polity.²¹

Washington’s efforts to lay out and construct the Federal City reflected his desire that the project generate profit for all involved without becoming a burden on the government’s still fragile finances. During the first few months of 1791, he appointed city commissioners, closely supervised a surveyor and an engineer tasked with studying terrain, and negotiated with local proprietors who received city lots in return for ceding their land. Jefferson assisted in developing the project, but the president determined boundaries, buildings, and terms of land acquisition.

Toward the end of March, Washington announced that the city would encompass 6,111 acres, or 9.5 square miles, laid out in designated lots divided by streets. His initial construction plans were economical, although Pierre L’Enfant’s later intervention would ensure a more grandiose vision. Even then, though, the president oversaw the process with his customary care in order to guard against wastage and corruption. He took the lead in enticing entrepreneurs to invest in the city, setting the example by purchasing lots there and building houses. Toward the end of his life he collected rents from them as a landlord.

It would take a decade to make the Federal City habitable, and many more years would pass before it became a fixed symbol of national unity. Until then Washington tangibly united the nation in the symbol of his person. He realized that fact without a hint of vainglory. Profoundly self-aware throughout his life, he also knew what it meant to be a leader. His job was to unify—to be, as many called him, a linchpin. To do so effectively, he needed to be visible. Moreover, through his travels around the country, his footsteps would become tangible links in the chain binding the disparate states into one dissoluble (he hoped) union.

No pomp and circumstance accompanied his rain-soaked departure from New York City on October 15, 1789, for the first stage of a journey to New England. In his mind he was traveling “to acquire knowledge of the face of the Country the growth and Agriculture thereof and the temper and disposition of the Inhabitants towards the new government.” In keeping with his habit of studying a project from all angles, Washington noted the state of home and public building construction, transportation, and communications at every stage of his journey. He chatted with farmers about their crops, livestock, and profits. The information was useful, but his interaction with the common people was even more important.²²

Commercial activities fascinated the president, as did manufacturing establishments. His itinerary included manufactories for sailcloth and cordage, cotton, leather, glass, and clothing, and he met with inventors, too. In Boston he sipped Thomas Fielder’s “supposed improvement in the Article of American Rum,” gazed at a mechanical boat that worked as it seemed by “Magic,” and provided the inventor with a small “loan” of $20 to support his development of a “Machine for improving Agriculture.” Much the same learning process accompanied his tour in the spring of 1791 to the southern states, where he discovered to his pleasure that the people practiced “industry and frugality.” He also learned that thanks to the more settled economy, “the farmer finds a ready market for his produce, and the merchant calculates with more certainty on his payments.” On both these trips, though, the president endured an exhausting series of public festivities and portrait sittings as the American people tried to come to grips with their new leader. He grumbled but submitted to these trials, which he knew served the public.²³

Despite all of his conspicuous manufactory visits, Washington understood that agriculture would continue to dominate the economy during his lifetime and for decades thereafter. Most of the inventions that he inspected in the course of his travels were designed for farm use. There initially seemed to be little he could do, though, to further agricultural prosperity from his presidential office.

Baron Friedrich von Poellnitz, a quirky Prussian nobleman who owned a small experimental farm on Manhattan, was one of many to belabor the president with sweeping plans for overhauling American agriculture. Washington studied the baron’s plans with interest but admitted to him that “in my public capacity, I know not whether I can with propriety do any thing more” than to forward them to Congress. “Whatever wise & prudent plans” the delegates “deemed most feasible & effectual (as being clearly within the functions & abilities of the general Government),” he promised, would “meet with my ready & hearty concurrence.”²⁴

Washington’s wariness was a product of both expediency and principle. Any attempt to extend executive control over the economy, he knew, would be viewed with immediate suspicion. He also firmly believed that government could not command production. Public figures such as he could nevertheless promote innovation and development so long as they did so as individuals acting in a private capacity. As president, he would accomplish some of his most important work when he was not being presidential.

Fortunately, Washington did not have to spend all of his time in public office away from Mount Vernon. He returned there as often as his official duties allowed, and worked to maintain and improve the estate. Never had his personal entrepreneurial activities been more public. Far more than during the Confederation period, Americans observed the examples he set in his farming. Visitors studied and newspapers reported his innovations, while inventors plied him with every imaginable gimmick. The advertising value of even an unofficial presidential endorsement was fantastic. Where Washington became a consumer, the producer reaped immense profit.

The president had to be careful on grounds of propriety just as he was always cautious in adopting new technologies. While every invention caught his interest, only a minority caught his fancy. In November 1791, Irish agriculturalist Charles Vancouver sent the president a “curiously invented plough.” Washington declined to accept the gift on ethical grounds. And though he said that he would be happy to pay for it, he confessed that the device seemed too complex for use by unskilled labor—specifically, slaves. “All machines used in husbandry that are of a complicated nature,” he told Vancouver, “would be entirely useless to him, and impossible to be introduced into common use where they are to be worked by ignorant and clumsy hands, which must be the case in every part of this country where the ground is tilled by negroes.”²⁵

Jefferson thought as Washington did on the importance of promoting American agriculture and related innovations in farming practices and manufacturing. Before their falling out during the president’s second term, the two men acted in concert through public peregrinations that left no doubt about their shared hopes for agricultural improvement. On the morning of August 22, 1791, Jefferson and the president breakfasted together in Philadelphia and then sallied out across the Market Street Bridge to a farm along the Schuylkill River owned by Samuel Powel, president of the city’s agricultural society. Powel had just acquired a new threshing machine created by inventor Alexander Anderson, and Washington and Jefferson spent the rest of the morning there looking over its components and watching it in operation.

Jefferson also exploited the president’s notorious sweet tooth in order to sell him on the idea of expanding domestic maple sugar production to Virginia. In the same month that he visited Powel’s farm, Washington received a shipment of some New York–produced maple sugar from entrepreneurs Arthur Noble and William Cooper, who boasted that “in a few years” they would manufacture enough of the stuff to “supply the whole United States.” Jefferson backed them up by sending the president a packet of sugar maple seeds. Possibly smacking his lips with pleasure, Washington recorded his “great pleasure” at “the progress of that promising manufacture” and planted Jefferson’s seeds at Mount Vernon.²⁶

Arthur Young continued to communicate regularly with Washington about agriculture. Since he published their letters with the president’s full concurrence, their correspondence became a public dialogue on the state of American farming and the means for its improvement. Both men used the correspondence to instruct, praise, and sometimes berate their countrymen and their governments. In a letter to the president of January 25, 1791, Young complained bitterly of the heavy taxation that Parliament imposed on English farmers. In his response, Washington exploited the opening thus provided to express his “astonishment hardly to be conceived” at “the account of the taxes with which you are burthened.” In America, he boasted, “our taxes are light.”²⁷

Young’s letter also included a request for a broad survey of the state of American agriculture, giving Washington an opportunity to conduct private investigations that he would have found difficult to justify in his capacity as president. On August 25, 1791, Washington dispatched a circular letter to gentlemen farmers in Virginia, Maryland, Pennsylvania, New Jersey, and New York asking for detailed information on matters such as land quality and values; rents; crop production and prices; populations of working livestock; prices of meat, butter, and cheese at different market towns; and iron tool manufactories. At Young’s behest as well as for his own purposes, the president inquired about “the Taxes in the different States, which may in any way affect the Farmer.” Washington dispatched the responses to Young, who published them to enlighten farmers on both sides of the Atlantic about the state and potential of American agriculture.²⁸

Washington’s correspondence with Young and other British agriculturalists and inventors helped to meld a new community of interest between both nations—this time, founded on mutual enrichment and respect. The results were far more positive than anything the president could have accomplished by attempting to dictate American agricultural reform. Through Scottish lord David Erskine, the Eleventh Earl of Buchan, Washington and American farmers learned of the work of Scottish economist and commercial and agricultural reformer James Anderson. After being introduced by Erskine in the autumn of 1791, Anderson sent the president a packet of rutabaga seeds and a copy of his journal the Bee, or Universal Literary Intelligencer. Washington accepted both with pleasure, and went on to purchase all eighteen volumes of the Bee along with Anderson’s many other important works on agriculture, science, and silk manufacture.

The volumes were destined not just for the president’s shelf. Determined that Anderson’s work should benefit all Americans, Washington interceded to get Anderson elected to the American Philosophical Society—an organization that the president heartily promoted for its support of invention and innovation. Washington also made certain that the Bee and the Scotsman’s other works were widely advertised in American gazettes. Through Anderson he acquired and disseminated knowledge about exciting recent discoveries by merchants, economists, scientists, and explorers in places as far afield as India and Russia, and received samples of foreign products such as scientifically engineered hemp seed from Germany.

Contacts with other Scotsmen were equally salutary. Agricultural reformer Sir John Sinclair, who in addition to being a member of Parliament founded and presided over the British Board of Agriculture, became one of Washington’s most important correspondents. Sinclair owned a large estate in Caithness that served as a model for advanced methods of agriculture and livestock (especially sheep) breeding. He regularly supplied Washington with updates on his own endeavors as well as official, board-sponsored agricultural statistics, reports, pamphlets, and surveys. Under Sinclair’s auspices in 1795, Washington became an honorary member of the British Board of Agriculture—a remarkable distinction for a sitting president who just over a decade earlier had led a violent rebellion against King George III—thereby forging another bond to unite the two countries in peaceful intercourse.

Washington also corresponded with John Anderson, professor of Natural Philosophy at the University of Glasgow and author of such important works as the Institutes of Physics (which greatly impressed Benjamin Franklin) and Essays on Field Artillery Since the Use of Gunpowder in War. Frustrated by the lukewarm reception that British officials gave to his military inventions, Professor Anderson asked for the president’s good offices in laying them before Congress. Washington was so excited by the proposal that he wrote his secretary Tobias Lear (then in London) on May 6, 1794, that “I wish most sincerely that some inducement could be offered Professor Anderson which would bring him to this Country. His labours are certainly ingenious, & worthy of encouragement.” Unfortunately, Congress did not take up the proposal.²⁹

The American president’s interest in promoting innovation in agriculture and manufacturing—which he shared with Jefferson and many others, but in a far more public role—quickly became common knowledge throughout the western world. This in turn inspired further innovation, as well as the flow of information. Hearing that Washington was intrigued by improvements in threshing machines, German-American merchants Frederick and Henry König of Baltimore contacted famed German agricultural economist Georg Friedrich Wehrs. He “without losing a moment endeavoured by every Exertion in my Power to procure” for the president “Draughts, Models and explanatory Information of the best Threshing Machines hitherto known.” In January 1793, Wehrs sent these documents to Washington along with information on paper and silk manufacturing, economics, and “a Small Treatise on the Preparation of Superfine wool for manufacturing fine cloth and other sorts of stuffs.”³⁰

Given his druthers Washington probably would have loved nothing better than to tour Great Britain—his lack of language skills made him feel insecure about visiting the Continent—to meet his new friends and witness firsthand their accomplishments in agriculture and industry. His youthful yearning to see London likely never left him, although he might have contemplated the prospect of an awkward meeting with King George III with considerable unease. Unfortunately, no sitting president could sail for Europe in an era when overseas travel involved a time commitment of months.

Washington’s secretary and confidant Tobias Lear, however, could and did. In August 1793, Lear amicably resigned his secretarial post to invest his time in a new mercantile firm he had founded, T. Lear & Company, with its headquarters in the Federal City. Learning that Lear would soon set sail to establish mercantile contacts in Holland, England, and Scotland, Washington enjoined him to investigate and report minutely about European agriculture, manufactures, and commerce. He also asked Lear to visit his luminary friends. After a stormy twenty-eight-day winter passage that ended in Glasgow, Lear spent two weeks “viewing the several large manufactories in the City and its neighbourhood,” including textile and glass establishments. He took copious notes, especially regarding their use of steam power, and sent these along with samples of their products to Washington. After celebrating Christmas Lear set out for Edinburg, and then conducted a tour to visit factories in towns like Leeds, Manchester, and Sheffield on his way to London—becoming an eyewitness to the dawn of the Industrial Revolution.³¹

In the course of his meanderings, Lear studied British agricultural and gardening practices. He dispatched some five thousand white thorn plants to Washington for planting at Mount Vernon. Lear also visited the president’s friends, such as the Earl of Buchan, John Sinclair, Professor John Anderson, and of course Arthur Young. Washington spoke fondly and often of Young, so much so that Lear probably expected to tremble before his personal and intellectual presence. Reality was a little disappointing. Young was thin, moderately tall, and with “an interesting countenance, aquiline nose & good eye.” He spoke energetically and intelligently. Lear was shocked to discover, however, that far from adulating Young, some of his countrymen considered him a bit of a windbag. A number of Young’s closest acquaintances, Lear told Washington, looked on him “rather as a theorist on the subject of farming—and even say that he never made half the experiments of which he has published the result—and his own farm is said to be one of the most slovenly in the part of the Country where he lives.” Everyone, however, admitted that he had “done very great good to the cause of agriculture, by his writings and perseverence.” Lear also learned that while British aristocrats and merchants still were a little touchy on the subject of America, entrepreneurs and manufacturers almost uniformly viewed Americans and Washington in a positive light.³²

COULD AMERICA FOLLOW GREAT BRITAIN’S EXAMPLE in building a profitable manufacturing sector that was independent of rather than subsidiary to agriculture? This—although it was not immediately obvious—would be one of the first areas in which Washington and Jefferson parted ways. The president was no rampant industrialist. While Jefferson envisaged a largely agricultural future for the United States, however, Washington cautiously endorsed a gradual expansion of the manufacturing sector. So long as the demand for agricultural labor remained high, so-called cottage industries—dominated by women—could carry much of the workload. “I would not force the introduction of manufactures, by extravagant encouragements, and to the prejudice of agriculture,” Washington explained to Lafayette in January 1789, “yet, I conceive, much might be done in that way by woman, children & others; without taking one really necessary hand from tilling the earth.”³³

The president did not expect the agricultural labor shortage to last forever. He expected a population boom and encouraged it through immigration. Knowing as he did so many prominent Scottish agriculturalists, Washington favored the settlement of large numbers of Scots—especially Highlanders—in the United States, calling them “a hardy industrious people, well calculated to form new settlements—and will in time become valuable citizens.”³⁴

Just as he had learned at Mount Vernon after switching from tobacco to wheat in the 1760s, more labor meant more hands for manufacturing. Washington became more and more enthusiastic over time about creating the conditions whereby American industry could thrive. Telling Jefferson (then still in France) in February 1789 that promoting “manufactures” was among “the greatest & most important objects of internal concern, which at present occupy the attention of the public mind,” Washington argued in favor of promoting the domestic textile industry—especially cotton, which would “be of the most immediate and extensive utility.”³⁵

Just before writing to Jefferson, Washington had entertained James Milne, the entrepreneurial son of British Lancashire cotton manufacturer John Milne, at Mount Vernon. Over dinner, the younger Milne explained his plans to establish textile manufactories in Georgia and South Carolina. The concept worked Washington up into a lather of excitement. “The increase of that new material and the introduction of the late-improved Machines to abridge labour,” he enthused to Jefferson, “must be of almost infinite consequence to America.”³⁶

In his eagerness the president almost forgot—or tried not to remember—the difficulties that British laws placed in the way of acquiring new technologies. In November 1789, after returning from New England where he had witnessed both the potential and the limitations of American manufacturing, Washington read a letter from Welsh woolen manufacturer Thomas Howells. In it Howells expressed to the president his desire to export skilled workers and advanced technologies to America, where they would establish a chain of wool manufactories. This would of course violate British law, which prohibited the export of either; but Washington brushed aside the legal difficulty. Admitted self-interest jacked his enthusiasm. If such manufactories cropped up in northern Virginia, he imagined, they would provide immediate outlets for his own wool, and lead planters across Virginia to raise more sheep—that portion of his stock in which Washington confessed he took “most delight.”³⁷

Jefferson was less enthusiastic. After Washington promoted Howells’s scheme to the Virginia legislature—sparking some interest—Jefferson and Attorney General Edmund Randolph intervened. The president of the United States, they warned with reason, should steer clear of involving himself in what would be regarded as a “felony” in Great Britain. Not until 1808 would Thomas Howells’s son Joseph (ancestor of author William Dean Howells) come to America and settle in Ohio to pursue his father’s and the president’s dream of establishing American wool manufacturing.³⁸

Washington, though, did not give up. In December 1789 he met with Thomas McCabe, Jr., son of a prominent Belfast manufacturer, to discuss the plausibility of transferring British cotton manufacturing technology to the United States; and in July 1791 he met with McCabe’s friend William Pearce, a Manchester artisan seeking to promote his British-designed loom. Financially backed by Hamilton, among others, Pearce succeeded in establishing a cotton manufactory in Philadelphia. He took George and Martha Washington and many members of the Cabinet on a tour of the facility in June 1792, prompting the president to urge his deputies to brainstorm ways they might encourage it and similar enterprises.

Therein lay a thorny problem. When it came to agriculture, Washington was hands-off: though inefficient, the sector already dominated the national economy and could best be aided by the dissemination of knowledge of improved technologies and better farming practices. Manufacturing, though, did not exist on any scale because of the colonial system’s toxic legacy and the British laws against the export of skilled workers and technologies to America. Although Washington had initially hoped for an influx of French and other Continental European know-how, time revealed just how little these countries had to offer in comparison with Great Britain.

How, then, could the government encourage manufacturing? The question baffled Washington. The passage of the Patent Act for the “Encouragement of Arts and Sciences” in 1790 offered protection to American inventors but gave no substantive support to domestic manufacturing. Washington pondered working to build manufacturing through the agricultural sector—for example, “encouraging the growth of Cotton, & Hemp” because of “the advantages which would result to this Country from the produce of articles which ought to be manufactured at home.” Likewise with sheep: encouraging farmers to raise them more extensively, he thought, “might be made not only a most profitable subject to the farmer, but rendered highly important in a public view, by encouraging extensive establishments of woollen manufactories from the abundance of wool which they could furnish.” Simply “encouraging” or leading by example, though, could foster manufacturing only over the long term. The British government provided bounties or subsidies to promote certain industries it deemed important for the national welfare, and Washington had to admit that such were the only means he could think of to “effectually” encourage manufacturing. But were bounties appropriate or even constitutional?³⁹

Hamilton thought so. He was already at work in developing a Society for Establishing Useful Manufactures that would create a model industrial town in Paterson, New Jersey. And in his “Report on the Subject of Manufactures” of December 5, 1791, he bluntly proposed that the government follow the British example of subsidizing certain manufactures. Jefferson, though, bitterly opposed the idea as conducive to “unlimited” government. Conversing with the president on February 29, 1792, the secretary of state argued forcefully that “the Report on manufactures which, under colour of giving bounties for the encouragement of particular manufactures, meant to establish the doctrine that the power given by the Constitution to collect taxes to provide for the general welfare of the U.S. permitted Congress to take every thing under their management which they should deem for the public welfare, & which is susceptible of the application of money.”⁴⁰

This was one time Hamilton did not get his way. Either because he did not wish to alienate Jefferson and Madison—for whom the report on manufacturing was the proverbial last straw—or, more likely, because he could not make up his own mind on the question of subsidies, Washington refused to promote the report and Congress never took it up. Thus, when on May 25, 1792, a certain “B. Francis” wrote to the president expounding on America’s limitless mineral resources, which he said would “promote Industry, the study of chymistry, and the prosecution of Manufactures” if the government subsidized their exploitation, Washington deferred to Jefferson. He replied on the president’s behalf a month later that “the subterranean riches of this country not yet explored are very great, but the exploring [of] the mineral kingdom, as that of the vegetable & animal, is left by our laws to individual enterprize, the government not being authorised by them to interfere at all: consequently it is not in the power of the President to avail the public of the services you are pleased to tender in this line.”⁴¹

DEBT, CREDIT, AGRICULTURE, AND MANUFACTURING were all important, but to Washington’s mind nothing was more vital to the future survival of the United States than the development of free, safe, and thriving systems of internal and external commerce. Domestic commerce took precedence for its role in fostering national unity. In his draft inaugural address, Washington had promoted international commerce out of a belief that “a sense of reciprocal benefits will serve to connect us with the rest of mankind in stricter ties of amity.” However, he thought that “an internal commerce is more in our power; and may be of more importance.” It would in time “exterminate prejudices, diffuse blessings, and encrease the friendship of the inhabitants of one State for those of another.”⁴²

The government’s role in this process was easier to delineate than its place in, for example, manufacturing. Its business was—along with private investors—to help create the structure and conditions by which such commerce could take place. Communications were essential. Writing to Congress on October 25, 1791, to urge the creation of a post office and post roads “on a plan sufficiently liberal and comprehensive,” the president pointed out that “safety and facility of communication” would both bind together the far-flung “Western and Northern parts of the Union” and diffuse “a knowledge of the laws and proceedings of the Government; which, while it contributes to the security of the people, serves also to guard them against the effects of mis-representation and misconception.”⁴³

Ultimately, though, the government’s purpose in promoting the development of internal infrastructure was not to expand its ability to exert political control but to foster prosperity. Washington believed in a strong and stable federal government. He did not, however, believe that it was the government’s role to enforce national unity. That, he thought, depended on commerce. It was for this reason that the government had a duty to help build nodes of transport and communication—so that the people could, through free exchange, forge their own national community of commerce. Although Washington promoted the development of post roads and where possible improved land transportation routes, mass road paving was out of the question.

Water-borne commerce held vast potential. Though he had a personal interest in the Potomac, Washington imagined a national network of many waterways linked by canals. Within a decade, he predicted to the Earl of Buchan on April 22, 1793, that “if left undisturbed we shall open a communication by water with all the Lakes Northward & Westward of us with which we have territorial connections; and an inland navigation in a few years more from Rhode Island to Georgia inclusively. . . . To these, may also be added, the erection of bridges over considerable Rivers, & the commencement of Turn-Pike Roads as further indications of the improvements in hand.”⁴⁴

Still, the Potomac remained for Washington the prince of American waterways. The “Potowmac River then, is the centre of the Union,” he wrote to Arthur Young on December 5, 1791. “It is the River, more than any other, in my opinion, which must, in the natural progress of things, connect by its inland navigation . . . the Atlantic States with the vast region which is populating (beyond all conception) to the Westward of it. It is designated by law for the seat of the Empire; and must, from its extensive course through a rich & populous country become, in time, the grand Emporium of North America.” With the letter the president enclosed a “general Map of North America,” upon which he fussily traced the outlines of the Federal City along with the Potomac and all its tributaries. Poring over the map during long hours in his study and drawing upon his personal observations during his rambles across the mid-Atlantic, Washington had assessed each of these tributaries and the costs of making them navigable.⁴⁵

Unfortunately, the Potomac Company that Washington had labored so diligently to found, and in which he still held stock, had not so far lived up to expectations thanks in part to the incompetence of its engineer, the inventor James Rumsey. By the time he became president, Washington was no longer closely involved in the company’s operations, and after Rumsey died in 1792 the venture went adrift, not to revive until after the turn of the century. His dream still survived as he held out hope that the construction of the Federal City would renew interest in the project.

Private investment would take the primary role in realizing the vision of western navigation and expansion. Government had a limited role to play in maintaining if not developing commercial infrastructure. When melting Delaware River ice broke up an important commercial pier below Philadelphia in the spring of 1792, for example, Washington approved an appropriation of $2,000 for its restoration. By principle, though, he never considered pushing westward navigation or national transport and communications as massive public works projects. The American people, he could only hope, would catch on to his enthusiasm and invest heavily in schemes to develop the Potomac and other rivers. It was up to local governments from the county to the state level, meanwhile, to authorize and seek funding for the construction of roads. Until then, he had to think in broader terms about uniting east and west in a truly continental economy.

Native Americans were integral to his vision. Relations were uneasy as white settlers encroached on their land and they retaliated with sporadic raids and killings, especially in the Ohio and Kentucky country. Contrary to myth, though, Washington preferred to avoid military means of dealing with this issue. He never considered any form of genocide or ethnic cleansing. Rather—in keeping with his view of human relations generally—he sought peace as a prerequisite to commerce, and commerce as a means of maintaining peace.

White and Native Americans, the president imagined, could live side by side if they developed a community of interest through trade. But the link had to be direct. While negotiating a treaty with the Creek Nation in the summer of 1790, he discovered that British middlemen dominated commerce with them by importing English goods through Spanish ports. This had to end for many reasons, only one of which was the need to establish direct (and presumably positive) relations between natives and the United States. Up to this time, after all, depredations against the Native Americans had been at the behest of Spain, Great Britain, and France.

Addressing the Senate on August 4, 1790, the president contended that “As the trade of the Indians is a main mean of their political management, it is therefore obvious, that the United States cannot possess any security for the performance of treaties with the Creeks, while their trade is liable to be interrupted or withheld, at the caprice of two foreign powers. Hence it becomes an object of real importance to form new channels for the commerce of the Creeks through the United States.” In accordance with this principle, enshrined that summer in an act of Congress, a secret article was added to the Creek treaty requiring that after 1792, commerce with them would “be carried on through the ports, and by the citizens of the United States.”⁴⁶

Hard facts, unfortunately, progressively battered Washington’s vision to pieces. As fighting between settlers and Native Americans in the Ohio Region spiraled out of control, Arthur St. Clair, governor of the Northwest Territory, concluded that only war could break the cycle. The president reluctantly complied with his demand to launch punitive expeditions against the Native Americans. These resulted in two major disasters: General Josiah Harmar’s defeat in October 1790 and St. Clair’s defeat in November 1791.

On October 25, 1791, just before news arrived of the St. Clair disaster, Washington had hopefully suggested that commerce with the Native Americans “should be promoted under regulations tending to secure an equitable deportment towards them, and that such rational experiments should be made, for imparting to them the blessings of civilization, as may, from time to time suit their condition.” The twin military catastrophes of 1790–1791, though, left the Northwest Territory essentially ungovernable, forcing the president to choose between abandoning the region to British influence and imposing control by force. There was no real choice. In August 1794, General Anthony Wayne decisively defeated the Northwestern tribes at the Battle of Fallen Timbers. In the aftermath of this battle, Native Americans were forced to cede much of their land in the Ohio region. And following the Jay Treaty of 1795, the British finally pulled out of forts they had continued to occupy in violation of the 1783 Treaty of Paris. The United States had won a “victory,” but established an ugly precedent that Washington had never wanted to set.⁴⁷

A NATIVE AMERICAN CONFLICT WAS SURVIVABLE, but a foreign war might not be. No one knew better than Washington what another war might do to the economy, politics, and society. That was one of the reasons why, as president, he sought to avoid foreign entanglements. Peace was indispensable for national prosperity to develop. To Lafayette he wrote on January 29, 1789: “While you are quarreling among yourselves in Europe—while one King [George III] is running mad—and others acting as if they were already so, by cutting the throats of the subjects of their neighbours: I think you need not doubt, My Dear Marquis we shall continue in tranquility here—And that population will be progressive so long as there shall continue to be so many easy means for obtaining a subsistence, and so ample a field for the exertion of talents and industry.” Avoiding foreign entanglements, though, did not entail withholding commerce. Washington was determined to place the United States firmly within the global economy—again creating communities of interest, this time across the seas.⁴⁸

Overseas commerce was already developing before Washington became president. “Commerce to the East Indies is prosecuted with considerable success,” he exulted to Jefferson on August 31, 1788. “The Voyages are so much shorter & the Vessels are navigated at so much less expence, that we hope to rival & supply (at least through the West Indies) some part of Europe, with commodities.” Thanks in part to the success he achieved early on at establishing American financial credit abroad, this commercial expansion could be expected to continue more or less on its own account provided no obstacles were thrown in its way. It was clearly not government’s role to command commerce. Here as elsewhere, though, Washington knew that there was much he could do personally to foster it.⁴⁹

Projecting confidence abroad formed a focal point of Washington’s strategy for promoting international commerce. His official and private letters to overseas friends, acquaintances, diplomats, and merchants oozed optimism on the goodwill and economic potential of the United States. He became particularly vociferous at times of internal crisis, counteracting perceptions of American weakness or discord. In early 1792, with the United States in the grip of a financial panic, he contacted all of his European associates to let them know that his country remained a haven of peace and prosperity in a world torn by war. For the most part he repeated a number of stock phrases, as in a letter to Lafayette on June 10, 1792: “The affairs of the United States still go on in a prosperous train,” he wrote. “We encrease daily in numbers & riches, and the people are blessed with the enjoyment of those rights which can alone give security and happiness to a nation.” The propaganda remained unremitting throughout his presidency.⁵⁰

American merchants embraced Washington as a symbol of trade and prosperity. Closeness to him also lent them legitimacy. In July 1792 the president announced his plans to pass through Baltimore on his way to Philadelphia. Soon thereafter he received a letter from the merchants of Baltimore “who have a sincere love and attachment for you [and] wish very much to give you a public dinner.” Just as during his trips to New England and the South, Washington agreed despite his aversion to “formal & ceremonious engagements.” Most everywhere he went as president, the story was the same.⁵¹

Washington also acted symbolically through his purchases of exotic goods from foreign ports, which he did in part as a means of encouraging the American mercantile community. Mount Vernon’s gardens and greenhouse became botanical wonderlands of rare plants. In September 1789, the president wrote to Margaret Tilghman Carroll of the Mount Clare estate in Baltimore asking her to send him a small shipload of some of the imported fruit trees, herbs, and ornamental plants that bedecked her magnificent greenhouse. She complied with a profusion of orange and lemon shaddocks (or pomelos), scented shrubs, aloes, and marjoram. Consigning these to a skilled gardener he had just imported from Bremen, Germany, Washington purchased a wide variety of tropical plants over the following years, especially fruit. He loved how the plants looked but also cherished their value, instructing his gardener to “raise large Nurseries of the most valuable sorts; as well for the purpose of sale” as for pleasure. For the Mount Vernon household—often for Martha’s pleasure—he ordered Chinese and Indian porcelain, tableware, ornaments, and muslin and jaconet cloth from American merchantmen docked at Alexandria. Here and on his visits to port cities on his travels around the country, the president made it a point to publicly inspect vessels engaged in the Asian trade, and applaud their work.⁵²

Visiting these merchantmen exposed the president to some of the most colorful characters he ever encountered. One of them was the eccentric and wealthy Irishman John O’Donnell, who lived in India for sixteen years as an employee of the East India Company before sailing his merchantman Pallas from Canton, China, to Baltimore in 1785. His crewmen were all Indian and Chinese, and their cargo—the first to be carried direct from Canton to Baltimore—generated a sensation. Washington drooled at the prospect of catching “great bargains” from a ship carrying exotic goods not subject to the usual duties and tolls coming from British carriers. So he contacted his former aide Tench Tilghman, then living in Baltimore, and asked him to purchase a long list of items such as fabrics, tableware, tea, and handkerchiefs. Through Tilghman, he and O’Donnell exchanged hearty greetings and expressed their desire to meet. Washington was particularly eager to gaze upon the merchantman’s crew because “from my reading, or rather from an imperfect recollection of what I had read I had conceived an idea that the Chinese though droll in shape & appearance, were yet white.” Unfortunately, O’Donnell priced his goods “extravagantly high” out of the knowledge that he had temporarily cornered the market on Asian goods. As a result, Tilghman refused to purchase any of them at the public sale.⁵³

Though American buyers did not prove as gullible as he had hoped, O’Donnell enjoyed being the center of attention so much that he decided not to leave. Instead he purchased 2,000 acres of Baltimore waterfront land, where he constructed an elegant oriental mansion called Canton and entertained legions of awestruck guests. He hoped more than anything to include Washington among them. The master of Mount Vernon always seemed too busy, though, so after the inauguration O’Donnell rushed off to New York City to meet Washington in his official abode. There the Irishman put his storytelling gifts to full use, beguiling the president with tales of oriental mysteries, including the Indian hookah. Washington must have cocked an eyebrow at this. Later, on passing through Baltimore on September 9, 1790, the president was startled to encounter one of O’Donnell’s Asian servants proffering the “Indian Apparatus for Smoaking” and proposing to “shew the President’s Servant it’s use, and the Manner of preparing the Tobacco for Smoaking.” Whether the hookah ever occupied the president’s leisure moments is unknown, but he and O’Donnell stayed in touch for many years.⁵⁴

An old nemesis helped foster the growth of American commerce in Asia. In the mid-1780s Lord Cornwallis, then governor general of India, opened up ports in the subcontinent to American vessels. By the early 1790s the Indian trade had become prolific enough to merit the appointment of an American consul, who Washington nominated to the Senate in November 1792. Further consular appointments to places like the Dutch East Indies and China followed in due course.

There were nevertheless significant limits to what the president could accomplish. On December 13, 1791, the Providence merchants Brown & Francis wrote to him requesting that he draft them a letter of endorsement for a $100,000 loan they sought from bankers in Amsterdam. They promised to use the money to build a large American merchant vessel for the Asian trade with the purpose not just of profit but encouraging the growth of a large American merchant fleet. Washington took their proposal into “serious consideration.” He was on record as favoring the construction of American merchant ships, having exhorted Congress on December 8, 1790, to offer “such encouragements to our own navigation as will render our commerce and agriculture less dependent” on foreign shipping. Regretfully, though, he informed Brown & Francis on January 7, 1792, that despite “every disposition and wish to promote the commercial interests of our Country, and to countenance the laudable undertakings of its enterprising citizens,” he could not endorse their loan request because in doing so “it would be almost impossible to separate my private from my official character.” Far from being offended, the merchants built their vessel anyway, naming it the President Washington, and dispatched it to the East Indies. There, like good capitalists they sold the ship for a superior foreign-built vessel. Named the Illustrious President, it took up a symbolically significant trade between Asia and Ostend.⁵⁵

In other parts of the globe, too, Washington’s name symbolized the projection of American commerce—if not power—abroad. In April 1792 the American merchant and explorer Joseph Ingraham, sailing the Brigantine Hope on a course from Boston to northwest North America, and to China and back, sighted a group of seven new islands in the Marquesas chain in the South Pacific. He named the first of them Washington’s Island. Elsewhere, the sloop Lady Washington was among a number of vessels owned by a group of Boston merchants trading sea otter furs from northwestern America to China. One of the merchants, Joseph Barrell, sent Washington an otter fur in November 1793, pointing out that it had been carried from America to China and on around the world to Boston. The president proudly adorned his saddle with it.

Although he was no sailor, Washington would always fondly remember his youthful journey to Barbados, and his admiration for seagoing men was profound. When his friend Alexander Spotswood announced in February 1792 that his young son sought a berth on a vessel bound for the East Indies and asked for a letter of recommendation, the president happily obliged. “I am pleased,” he told the elder Spotswood, “to find that there are some young Gentlemen of respectability, stepping forward with ardor in a profession, where they may render service to their Country at a future period.”⁵⁶

In a world that had already seen no fewer than four major wars in less than a century and was already sliding into a fifth, commercial conflict was inevitable. Washington encouraged the quick negotiation of commercial treaties with all the European powers, although Jefferson, ambassadors, and consuls handled the details. Throughout the president’s first term, however, Congress seemed prepared to carry over resentment against European commercial restrictions and raids into tariff contests if not wars.

Washington and Jefferson both walked a fine line between failing to uphold American rights on the one hand and imposing excessively provocative retaliatory measures on the other. Both men understood that American commerce needed peace if it was to grow. Congress, however, sparred with the British—imposing, for example, heavy duties on imports of tin from Cornwall in 1792—and with the French, whose merchants decried the slow repayment of American war debts and whose increasingly radical series of administrations imposed severe duties on American imports.

The president did not waste his time railing against these contests. Instead, he focused his energy on securing measures for the protection of American commerce overseas. In his draft for the inaugural address he had written: “As our people have a natural genius for Naval affairs & as our materials for navigation are ample; if we give due encouragement to the fisheries and the carrying trade, we shall possess such a nursery of Seamen & such skill in maratime operations as to enable us to create a navy almost in a moment.” Though he had been sounding the same clarion call since the end of the Revolutionary War, however, a breathtakingly naïve Congress would continue to ignore him until 1794. The results of this neglect would come close to plunging the nation into the very type of war that demilitarization was intended to prevent.⁵⁷