https://medium.com/@nic__carter/a-man-a-plan-a-canal-39012ec7c603?source=rss-a063100e6515------2

How George Washington’s failed Canal Ambitions led to the Constitutional Convention

I am republishing this newsletter entry, first published two years ago in my short-lived newsletter, Murmurations. Murmurations was published on Twitter’s newsletter platform, Revue, which has since been deprecated. Because I like this piece, I am posting it here for posterity. Keep in mind this was intended for a smaller, more intimate audience.

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I grew up in the swamp. Well, more precisely, I spent most of my formative years in the suburbs of Washington, D.C. The question of where I’m “from” is a bit more complicated. I touched on it a bit in my blog On Writing (Ok, I have to come clean — to my embarrassment, I learned later that Stephen King had written an entire book with the same title and some of the same lessons, but of course from the position of a much accomplished writer. I later listened to this on audiobook with my dad on a 1,500 mile drive from Boston to Miami and thoroughly enjoyed it. I can’t recommend it enough.)

Did any of you get the joke in On Writing (the above blog post post referenced, not the book)? I’m not sure anyone did. In the post, I’m scolding myself, as well as my readers, for derailing the process of communicating information from your brain to another — telepathy, as Steven King describes it — with overly flowery language. My point was that vanity impairs clarity. But the post itself is full of unnecessary rhetorical flourishes. So it’s a classic case of myself not being able to take my own advice.

“Vanity of vanities,” says the Preacher;
“Vanity of vanities, all is vanity.”

Ecclesiastes 1:2

George Orwell is actually guilty of the same in his famous essay Politics and the English Language. He makes many of the errors of writing he insists a good writer should not commit. But we still love his essay. So I’m developing a new thesis: perhaps the flourishes are why readers stick around. No one wants to read robotic, syntactically optimal prose. Fair warning: due to a lack of an editor on this new project, I plan to fully indulge in digressions, flourishes, parentheticals, footnotes, asides, and needless rhetoric. Consider this my natural undiluted self.

Back to the swamp. Well — one point of clarification. Washington D.C. was never actually a swamp. George Washington picked it quite deliberately for the nation’s capital as he knew the area well given its proximity to his estate at Mt. Vernon. While D.C. is built around the Potomac, and as any resident knows, the soil in the region is virtually all clay, inherited from the river’s journey over the centuries, the city itself isn’t particularly swamplike. The swampiest era in the history of the nation’s capital came after the Civil War, when poor farming practices caused mudflats to emerge on the outskirts of the city. These were later transformed into the reflecting pool, the Tidal Basin (the place with the cherry blossoms), and much of the national mall where you can find the Lincoln and the Jefferson Memorials (my favorite). If you’ve ever visited, you will know that it can get extremely hot and humid, especially in the late summer months. But it’s no swamp.

By the way, there’s an incredible 18-mile bike trail from Alexandria, VA to George Washington’s estate at Mt Vernon. One of the best things about D.C. is the abundance of fantastic bike trails, many of them running along old canal towpaths or converted from trolley trails. I spent a couple years cycling to work from Bethesda (12 miles north) to downtown D.C. on a fantastic trail called the Capital Crescent. Downhill on the way in, following the curve of the Potomac down to Georgetown. Then uphill on the way back. There’s nothing like cycling uphill in the dark, sometimes in the rain or snow, for 12 miles after a long day’s work. At the time I worked for a magazine covering corporate law of all things. I think I earned around $40k/year at the time but I was quite content.

As any DC resident knows, there’s a spectacular natural landmark not far from the city. I speak of Great Falls, a series of enormous rapids 14 miles upstream of DC. The falls drop 80 feet in under a mile, including a 50 foot drop over 1/10 of a mile. The flow rate increases dramatically as the Potomac is crammed into a narrow gorge. It’s quite breathtaking, especially when the river is engorged after a rainstorm. These are Class V+ rapids, with only the most experienced kayakers able to traverse them. Fatalities are not uncommon. Swimmers in the area also frequently drown. Gigantic signs adorn the banks of the river grimly warning of the number of drownings in the area. The rapids are so dangerous that kayakers are cautioned to attempt them only during off-peak hours so as not to attract attention from park visitors who get dangerously close to the river in their enthusiasm to watch.

There’s a great trail with fantastic views of the falls on the Maryland side called the Billy Goat Trail (Section A is the one you want). It has plenty of scrambling over rocks for those who enjoy that sort of thing. Growing up our family must have done it a dozen times at least, maybe more. My dad had a habit of doing the relatively demanding trail in flip flops. Invariably one would break and he would march on, stoically, with one foot bare, insisting that he was just fine. If you ever visit D.C., take a break from the monuments and give the trail a shot. The first half winds right along the river on the sheer rocky banks, and the latter half takes you back along the canal and towpath.

This is where George Washington features again in our story. Washington, aside from being a general, nation-builder, statesman, and one of the largest landowners in the U.S., was also a huge aficionado of canal-building. Long before he commanded troops in the revolutionary war or assumed the Presidency, he pursued canals with a passion. In 1748, at the mere age of 16, the youthful Washington was hired by his mentor Lord Fairfax to join a surveying expedition in western Virginia. (Washington’s surveying career spanned his entire life; he continued to undertake surveys up until his death in 1799.) This first trip convinced Washington that a series of canals around the Potomac’s impassable rapids was the key to linking the coast to the fertile Ohio valley. He would spend the rest of his life, political career permitting, attempting to realize this vision.

In the wake of the Revolutionary war, Washington formed the Patowmack Joint Stock Company in 1785 in pursuit of this dream. The Company through great adversity eventually completed five canals, including a canal skirting Great Falls, which opened in 1802.

To build the locks descending alongside Great Falls, Washington’s canal required black powder to blast out the rock, one of the first engineering projects in the U.S. to use this technique. Given the general lack of modern engineers in the country at the time, this work was slow and arduous. In the end, the Patowmack Company made a 218-mile stretch of the Potomac somewhat passable, with boats taking the river most of the way, and using the canals and locks to descend impassable portions. That’s why it was called a ‘skirting’ canal — it didn’t replace the river but rather supplemented it during the rockiest bits. The system was nevertheless somewhat rudimentary. As the national park service relates:

Some years there were only about 45 days when the water reached a sufficient level for the locks to operate. The Potomac itself was unpredictable and often tore up boats in rapids and whirlpools. Because no one could pole against the strong current, boats had to be broken up in Georgetown and sold along with the other cargo. A more effective way was needed to navigate the Potomac.

In the pre-steamboat era, traveling upstream on the Potomac was basically impossible, so the direction of travel was one-way. The vestiges of some of these canals and locks, including the ones at Great Falls, still exist and can be visited today.

Economically speaking, the Patowmack Company was not a success and folded in 1832. Its operations (and some of its locks) were incorporated into the more substantive Chesapeake & Ohio (C&O) Canal, which ran parallel to the Potomac. The C&O canal, completed in 1850, linked the coal mines of Cumberland, MD with Washington D.C., operating until 1924. The C&O Canal was passable in both directions, with mules towing boats along the towpath. Today the towpath running along the 184-mile length of the canal (or its desiccated remnants) remains intact, thanks to Richard Nixon’s 1971 designation of the Canal as a national park.

This is a picture of the ‘Little Falls’ section of the original Patowmack canal, later folded into the C&O canal. The present day C&O canal and towpath looks like this along much of its length. In the summer it’s chock full of turtles sunbathing on logs, fish, and birds, which are attracted to the warm, placid waters.

For his part, Washington had to abandon his canal-building plans in order to preside over the Constitutional Convention in 1787, which would end with him assuming the role of the presidency in 1789.

A man, a plan, a canal

But Washington’s work on canals was not wholly distinct from his nation-building ambitions. Indeed, it could even be said that his desire to unite the interior frontier of the country with its coasts led to the constitutional convention itself. The canal was a multi-lateral endeavor; the canals along the Potomac were bordered by Maryland and Virginia and thus both states had an economic interest in the project. Postwar relations between the two states were anything but harmonious, though. Washington took on the unenviable task of persuading the assemblies of both states to support the canal. With the help of a convention hosted at his estate in Mt Vernon, he was able to reach an accord. Future ideological opponents James Madison and George Mason also supported the canal and associated convention. There, delegates from Maryland and Virginia agreed on the Mt Vernon Compact, which governed river navigation rights, fishing rights, and the sharing of toll duties from canal passage.

After the success of the Mt Vernon Convention, the future-framers decided to invite other states to the discussions, broadening their scope from simple questions of river tolls to commerce more generally. In 1785 letter, Madison urged Washington to take advantage of the traction from the Mt Vernon conference:

It seems naturally to grow out of the proposed appointment of commissioners to Virginia and Maryland, concerted at Mount Vernon, for keeping up harmony in the commercial regulations of the two States. Maryland has ratified the report, but has invited into the plan Delaware and Pennsylvania, who will naturally pay the same compliment to their neighbors.

Thus in 1786, Madison organized a second conference, this time in Annapolis. The objective was to “take into consideration the trade of the United States” and “consider how far a uniform system in their commercial regulations may be necessary to their common interest and permanent harmony.” This time, delegates from Virginia, New York, Pennsylvania, Delaware and New Jersey attended. Among them were Madison, Alexander Hamilton, and Edmund Randolph, future Secretary of State under Washington.

At the time, the nation was in deep recession, and the incipient Confederation was unable to finance itself through taxation nor able to devise a consistent trade policy. Shay’s rebellion, a populist uprising in Massachusetts triggered by a postwar debt crisis, was also underway at the time. The political atmosphere was grim. Thus at the Annapolis convention, Hamilton became convinced of the need for a wholesale reimagining of American governance. He proposed a subsequent convention in Philadelphia the following year, “to take into consideration the condition of the United States, and to devise such further provisions as shall appear to them necessary to render the constitution of the Federal government adequate to the exigencies of the Union.”

Thus it could be said that Washington’s canal ambitions set off a causal chain that led directly to the Constitutional Convention in 1787. National Geographic in their June 1987 issue described the Patowmack Canal as the ‘waterway that led to the constitution’.

Constitution or a Coup?

There’s a strain of revisionist history, which I am partial to, that treats the constitutional convention, and the ensuing establishment of the United States, as a kind of bloodless coup. The Confederation was certainly ineffective, but it had not failed entirely at the time of the convention. And if you compare the Constitution with its predecessor, it was considerably less democratic. Curtis Yarvin puts it plainly:

The Constitution is an elected monarchy because the Constitution was installed as a right-wing coup. Its goal was to replace the chaotic and ineffective Congress of the Confederation with an effective government that was monarchical and national, while retaining the cosmetic appearance of a federation of sovereign states. Later this fatal, unresolvable ambiguity produced a war; it worked quite well for most of a century.

adding,

In America, something like pure, decentralized democracy lasted roughly from 1776 to 1789. The Congress of the Confederation worked so poorly that Americans airbrushed our first national government out of our own history books.

Indeed, the colonies did organize a government between the end of the revolutionary war in 1783, and Washington’s first term, which began in 1789. The Continental Congress had no fewer than ten separate presidents (although these presidents had little executive power, being part of the congressional body). This government didn’t function particularly well, but it existed.

Now to Yarvin’s question, if you went to school in the U.S., how much time was devoted in history class to this era in history? I would venture that you recall an unbroken narrative from the Declaration of Independence straight to the framers, with no discussion of the 13 year interregnum. Was the name of John Hanson, the first individual known as ‘President’ in the United States, mentioned at all?

There’s a very detailed book on this topic called The Framer’s Coup, by Harvard Law professor Michael Klarman, that casts the Constitutional Convention as a kind of reprisal of the elites against the incipient democracies that existed at the State level. Indeed, it’s quite clear that the U.S. Constitution was much less democratic than the Articles of Confederation. The Constitution established the Senate (at the time, Senators were chosen by the States, rather than being directly elected), the Electoral College, clearly intended to insert elite discretion into the presidential selection process, and firmly entrenched the Federal government as superior to the States.

So why did the Constitution include such apparently anti-democratic measures? Klarman argues that, post revolutionary war, these State-driven democracies had embraced populist policies imposing a kind of economic class warfare designed to disempower large landholders and benefit poorer farmers and the working class. He lays it out in a 2010 talk:

The Framers’ constitution was mostly a conservative, aristocratic response to what they perceived as the excesses of democracy that were overrunning the states during the 1780s.

The Framers were trying to create a powerful national government that was as distant from popular control as possible: very long terms in office, large constituencies, indirect elections. They thought of democracy as rule by the mob. They didn’t think poor people could be trusted with the suffrage. They didn’t think women should vote.

A lot of what the original Constitution was about was constraining the power of the states to pass laws beneficial to debtor farmers in a time of economic distress and expanding the power of the national government to that it could efficiently raise taxes in order to pay off government bond holders, who often were merely speculators in such debt rather than initial suppliers of credit.

According to this reading of history, it may well have been the case that the Founding Fathers were motivated by a desire to reign in loose monetary policy that was benefiting debtors (by inflating away the real value of their debt) and harming the creditor class (which they, as a kind of American landed gentry, by and large consisted of).

This is a monetary theory of the Constitution not often advanced, but one that seems to align with many of the Framers’ stated views on monetary policy. Jefferson for instance once claimed that “paper is poverty,” describing it as “the ghost of money, and not money itself.” He additionally sought to advance an amendment abolishing borrowing at the federal level. Washington was no fan of fiat either, writing in a letter: “paper money has had the effect in your state that it ever will have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.” James Madison was equally aggrieved, claiming that “paper money is unjust,” adding: “it is unconstitutional, for it affects the rights of property as much as taking away equal value in land.” (And if you read Madison’s Federalist 10, it seems he isn’t a huge fan of direct democracy either.) Virginia’s rampant currency printing and devaluation during the revolutionary war likely affected Madison, Jefferson, and Washington, as they were all Virginia landowners. They would all have likely dealt with losses stemming from the inflation, with Jefferson hit particularly hard.

In this context, the ‘elite economic reprisal’ theory promoted by Klarman seems rather persuasive. The New Republic further elaborates on the theory:

Not surprisingly, common people began to use their new political influence to create economic policies that were favorable to themselves (and disadvantageous to creditors and wealthy citizens), such as inflationary monetary policy and progressive taxation. The Constitution, according to the economic interpretation, was the 1 percent’s revenge, a countermeasure designed to undermine the democratic governments in the states, thereby returning power to wealthy elites and insulating them from popular opinion.

The notion of the founding of the nation as an elite-led reprisal against democracy, motivated at least in part by concerns regarding excessively loose monetary conditions, is an idea that tickles me no small amount.

I’m generalizing, but Bitcoiners by and large aren’t noted fans of democracy. We tend to vote with our wallets. Granted, it’s hard to be a fan when democracy created for us the worst debt overhang in peacetime in the history of the nation. We are at wartime debt to GDP levels, without having fought a war, and without any clear way out. The government commands the largest role it has ever had in society when measured by expenditures as a share of GDP. It’s not hard to see why we might be disenchanted with the electoral process.

I have long considered Bitcoin a bit of an inversion of prior populist monetary movements. Historically, populism generally entails a demand for loose monetary policy and the easing of credit. Jubilees and the cancellation of debt as Graeber relates are among the oldest political traditions in existence. So when I think of populist monetary movements I think of William Jennings Brian and his ‘cross of gold’. His ‘free silver’ movement aimed to expand the money supply, thus softening the currency and bailing out indebted farmers. Bitcoin, representing a hard money, low time preference, high interest rate ideology is the opposite. But how often do you see populist monetary movements in favor of hard money? I’m not sure I can think of one.

Some of the critics are right, I think. Well, partially. Any political description of Bitcoin will be both overly broad and incomplete; Bitcoin is a gigantic tent and is used by likely north of 100m individuals worldwide; no single idea unites them. The protocol is cold and unfeeling and manifests no ideology. It’s the collision of this neutral system with the established political world that is revealing. And certainly, groups of bitcoiners exist with definite political ideas.

For instance, the popularity of Bitcoin in the developed world could well be interpreted as an elite reprisal against the current populist desire to loosen monetary conditions, collapse asset prices, and eliminate general indebtedness, especially among young people. If you wanted to be dramatic, you could say that we currently face the choice between becoming a permanently indebted nanny state like Argentina or undertaking a hard money reset, such as the founding fathers engineered. In other words, default or austerity. I have my preferences, but I don’t think they’re widely shared.

Back to the canals. Something Washington’s economically unsuccessful canal project makes me think about is the importance of timing in tech investing. His travails are a stark reminder that being a visionary with regards to the progress of technology is not sufficient; you have to execute at the precise right time too. The challenging thing is that knowing when a technology is “due” is impossible a priori and without experimentation; thus tech innovation is necessarily built on the back of many prior failures that were directionally right in their thesis. Gwern puts it well in his stellar essay, Timing Technology: Lessons from the Media Lab:

Technological forecasts are often surprisingly prescient in terms of predicting that something was possible & desirable and what they predict eventually happens; but they are far less successful at predicting the timing, and almost always fail, with the success (and riches) going to another.

Gwern points out that accurate technological predictions are abundant, but what is unknown are the precise conditions and timing that will give rise to economically viable technological outcomes. In the case of canals, it may have been the most obvious thing in the world that transporting goods via waterway was more efficient than by cart and ox; but the the skills and technology required to build the ambitious canal projects of the late 18th century U.S. were virtually absent in the burgeoning republic. Thus it took Washington’s company 17 years to build the 1,800-yard canal at Great Falls (one of five in the Patowmac plan). He would not live to see it completed.

As someone who is paid to predict the future, or at least to try to anticipate trends before they are obvious, I think about Gwern’s essay quite often. It has a vaguely fatalistic tint to it. Founders may know the future, but the only way to learn whether it’s time for the future to arrive and whether conditions are economically suitable is to throw themselves at the problem. In practice, ‘transformative’ technologies involve numerous failed attempts before one finally hits at the right time. But the tragedy is that you have to be irrationally optimistic to have a chance at hitting. Almost definitionally, winners will be attempting to pull off a similar idea which has failed many times before.

This is why Gwern says that the future is built “by individuals acting suboptimally on the personal level, but optimally on societal level by serving as random exploration.”

In Washington’s case, he couldn’t achieve sufficient political buy-in to get the multilateral canal project off the ground as the returns from a canal were not sufficiently obvious in the pre-industrial era and serious canal-building technologies were not yet available. The subsequent C&O canal did much better, as transporting coal to the coast made a lot of sense — although it’s worth noting that the C&O canal was nearly obsolete upon completion in 1850, as the B&O railroad had already reached Cumberland by that time. So canals were a kind of cursed technology, at least in the agrarian and industrializing USA. When they were really needed, they were impractical and costly to build; and once they could be built economically, railroads quickly supplanted them.

All of that said, the towpaths along the contemporary remnants of the canals, especially the C&O Canal, make for a really nice crushed gravel bike path today. I like to think that Washington, an itinerant rambler at heart, would have felt that it worked out quite nicely after all.

Your faithful correspondent,

Nic