By Susan Nagel / Special To The Washington Post
As Congress has hotly debated both a bipartisan “hard” infrastructure proposal, as well as Democrats’ proposal to boost “human infrastructure” and make life easier for Americans, lawmakers are continuing in a tradition that dates to the 18th century.
Then, questions of what constituted infrastructure, who was responsible for it and what role the federal government should play in developing it were hotly contested. Thanks to a failed attempt at compromise at the constitutional convention, these questions fell to a generation of politicians who found themselves conflicted between personal interests and public good. They finally fashioned an answer: the federal government could fund infrastructure if it was integral to interstate commerce or national defense. But this answer left blurriness that fuels our present debates.
Independence from Great Britain was the starter shot for Americans who wanted to profit from land grabs and continental waterways. In 1784, both the New York and Virginia state legislatures passed laws that aimed to enable development of canal systems. Yet, neither government planned to build those waterways itself. Instead, in keeping with the tradition of the time, all improvement costs as well as any profits would fall to private companies.
An intense rivalry, spearheaded by Philip Schuyler of New York and George Washington of Virginia, accelerated between the men who owned waterside land in both states. Washington exchanged a flurry of notes with Thomas Jefferson expressing deep anxiety that they would lose the race to connect the Atlantic Ocean with the interior of North America to the “Yorkers,” who would soon connect New York Harbor and the Hudson River with the Great Lakes before the Potomac could be cleared to reach the Ohio River. The Virginians had good reason to be concerned. Nowhere was the post-war infrastructure transformation bigger than in New York City, which became a travel hub for stagecoaches, ferries and overseas shipping.
On Jan. 5, 1785, therefore, the Virginia Assembly passed another bill, creating the Potomac and James River Canal Companies. These entities would be owned by private shareholder investors and would be tax exempt. Yet, they were free to conduct their business without any obligation to report their profits or costs to the state of Virginia. Washington, who had amassed tens of thousands of acres along the Potomac River, would be the Potomac Canal Company’s largest shareholder, and later, its president as he was also serving as the first president of the United States.
In the midst of this ferocious competition between their two states, New Yorker Alexander Hamilton and Virginian James Madison foresaw the need to channel the development of infrastructure to benefit the public good, and not private interests. They worried that the bickering they witnessed over the issue would tear apart the nation. That sense led them to undertake the first and perhaps the most bipartisan effort to control and federally fund infrastructure in U.S. history. During the Philadelphia Convention, Hamilton – the strongest proponent of federalism – and Madison, who would ultimately champion states’ rights, tried to explicitly grant the power to develop canal systems to the federal government (instead of privately owned companies) in the Constitution. Yet, they failed.
Although Article I, Section 8 of the Constitution endowed Congress with the right to provide for national defense and regulate interstate commerce, it did not grant Congress the explicit authority to fund what was then known as “interior improvements,” or what today is called infrastructure.
The lack of a clearly defined constitutional role for the federal government in funding infrastructure improvements left it to the men who had been competing to enrich themselves to figure out what role the national government ought to play.
And Washington quickly showed why this was problematic. The Potomac Canal Company was struggling financially because it could not make navigable the Great Falls near Georgetown. That helped drive Washington to intentionally defy the 1790 Residence Act, in which Congress had spelled out that the nation’s new capital city should be a 10-square-mile site somewhere along the Potomac River between the Conococheague Creek tributary in Pennsylvania and the Anacostia River. But instead of following this directive, Washington located the nucleus of the federal government not far from Alexandria, Va. and the Great and Small Falls.
Why? Because these falls presented the most expensive obstructions to streamlining travel on the Potomac River, the key to profitability for the struggling company in which Washington was so heavily invested. Clearing the falls for navigation presented such a difficult challenge that many engineers refused to accept the task.
Unrelenting, Washington petitioned Congress for funding to unclog the falls, arguing that since they were to be in the very heart of the capital city, it was the legislators’ obligation — and not that of his Potomac Canal Company — to cover the cost of making the falls passable. In short, Washington pressured and strong-armed local, state and federal legislators in what only in what can only be understood as an effort to enlarge the value of his own real estate portfolio.
While the first president of the United States enriched himself through real estate while in office, he was certainly not the last. Jefferson, Madison and James Monroe all speculated in land and river development and grappled with similar conflicts of interest. Jefferson was the proud owner of land in Florida at the same time he negotiated the Louisiana Purchase; his emissary, fellow Virginian Monroe, owned thousands of acres in Kentucky. Both men would reap profits from this deal. The newly acquired Mississippi River would become an essential commercial thoroughfare to their own properties. Their own economic well-being helped incentivize these men’s efforts to expand U.S. territory and build the infrastructure needed to navigate it.
Following the Louisiana Purchase, as westward settlement flourished, demands intensified for infrastructure improvements that would benefit both the public — the great need for a defense program that incorporated western territories — and private enterprise. In 1817, Rep. John C. Calhoun of South Carolina introduced the Bonus Bill, which would create highways linking southern coastal states with the territory acquired from France.
Yet, Madison was now president. And he had less of a personal stake in such infrastructure expansion and a belief in strictly interpreting the Constitution that he had poured so much effort into drafting. As such, he vetoed the bill claiming that there was no enumerated power in the Constitution to fund roads and canals.
His successor, Monroe, however, saw things differently. The Erie Canal, a dream of Philip Schuyler, opened for business in 1825. Since its channels were within the borders of New York State, it had received state funding. Whether prompted by the old Virginia-New York rivalry, the thousands of acres he owned along the Potomac River or a genuine desire to spur transcontinental business, Monroe signed a bill in 1825 to federally fund the Chesapeake & Ohio Canal, essentially another name for the venture that Washington’s unprofitable Potomac Canal Company had undertaken.
Monroe effectively declared that interstate connectivity was essential to interstate commerce and defense. That gave Congress the power to fund it because Article 1, Section 8 included a clause granting the legislature the authority to enforce the rest of the section.
Working with Congress to pass his revolutionary bill, Monroe’s fresh and elastic interpretation of Article 1 resulted in the first federally funded interstate infrastructure bill. Monroe meant to prove that deterring invasion and safeguarding Americans by fortifying rivers could simultaneously stimulate American business and innovation. He also aimed to establish once and for all that Congress could fund infrastructure improvements in the public interest.
Monroe’s legal innovation has since enabled Congress to pursue such projects if they are indispensable to either interstate commerce or the U.S. armed forces, as in the construction of military bases. Yet, the absence of an explicitly crafted directive with parameters and boundaries that empowers the federal government to undertake infrastructure for the public good has created a blurriness about what types of infrastructure the government ought to fund, what ought to be left to the states and private interests and what even constitutes the national interest. This blurriness, in turn, helps to spark the fierce battles ongoing in 2021.
Susan Nagel is the author of the forthcoming book, “Patriotism and Profit Washington, Hamilton, Schuyler & the Rivalry for America’s Capital City,” to be published on October 5, 2021 by Pegasus Books.
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