A Conflict Among the Founders Still Shapes the Infrastructure Debate
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 postwar 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.