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The Residence Act of 1790 was officially titled "An Act for establishing the temporary and permanent seat of the Government of the United States". The Act settled the question of locating the capital of the United States, selecting a site along the Potomac River. The federal government was located in New York City at the time the bill was passed and had previously been located in Philadelphia, and Annapolis. Tensions arose between the states because it was felt that whichever state the capital was located in would have an unfair advantage over other states. A compromise was brokered between James Madison, Thomas Jefferson and Alexander Hamilton. Madison and Jefferson favored a southerly site for the capital on the Potomac River, but they lacked a majority to pass the measure through Congress. Hamilton was pushing for Congress to pass the Assumption Bill, to allow the Federal government to assume debts accumulated by the states during the American Revolutionary War. With the compromise, Hamilton was able to muster support from the New York State delegates for the Potomac site, while Virginia delegates gave support for the Assumption Bill.
The Residence Act gave authority to President Washington to select the site of the capital, along the Potomac, and set a goal of December 1800 for the capital to be ready. In the meantime, Philadelphia was chosen as a temporary capital. Washington had authority to appoint three commissioners and oversee the construction of Federal buildings in Washington, D.C., something to which he gave his personal attention. Thomas Jefferson was a key adviser to Washington, and helped organize a design competition to solicit designs for the United States Capitol and the President's house.
In January 1791, Washington appointed a three-member commission, consisting of Daniel Carroll, Thomas Johnson and David Stuart, to oversee the surveying of the federal district. Andrew Ellicott was chosen as the surveyor. Washington informed Congress of the site selection on January 24. Pierre Charles L'Enfant began working on a city plan for the capital in early spring 1791.
A design competition was held to obtain designs for the Capitol and the White House. Architect James Hoban was selected to design the White House, but no satisfactory drawings were submitted for the Capitol. A late submission by William Thornton was selected for the Capitol. Stephen Hallet was hired to oversee construction, which got underway in September 1793. Hallet made alterations to the design, over the wishes of Washington and Jefferson, and was subsequently dismissed. George Hadfield was hired in October 1795 as superintendent of construction, but resigned three years later in May 1798, due to dissatisfaction with Thornton's plan and quality of work done.
The original idea of the Residence Act was to use proceeds from selling lots in Washington, D.C. to cover costs of constructing federal buildings in the capital. But, few people were interested in purchasing lots. A shortage of funding added to the delays and problems in building the Capitol and other federal buildings in Washington.
The Senate wing was completed in 1800, while the House wing was completed in 1811. The House of Representatives moved into the House wing in 1807 even though the building was incomplete. The Capitol held its first session of United States Congress on November 17, 1800. The legislature was moved to Washington prematurely, at the urging of President John Adams in hopes of securing enough Southern votes to be re-elected for a second term as president.
On February 27, 1801, the District of Columbia Organic Act of 1801 placed the District under the jurisdiction of Congress. The act also organized the unincorporated territory within the District into two counties: the County of Washington on the northeast bank of the Potomac, and the County of Alexandria on the southwest bank. The capital city formally adopted the name of the nation's first president. On May 3, 1802, the City of Washington was granted a municipal government consisting of a mayor appointed by the President of the United States.