When he was elected president in 1789, George Washington was one of the nation’s largest landowners. Most of his holdings were on the wrong (western) side of the Appalachian Mountains, though, and thus of dubious financial value.
Washington had been working to remedy that. In 1785, he had gotten the Virginia House of Delegates to charter the Patowmack Company to build canals and otherwise improve navigation on the waterway (you know it as the Potomac River) that Washington was convinced could eventually, with a short portage or two, link the Ohio River to the Atlantic. This connection would knit East and West together and make the country stronger, Washington believed. It would also, not entirely coincidentally, make both his Western landholdings and his home base at Mount Vernon on the Potomac more valuable.
I got this from Joel Achenbach’s [book on the subject.] As The Washington Post reporter tells it, Washington was aware of the potential for conflict of interest in his endeavors. He hemmed and hawed before accepting Virginia legislators’ offer of shares in the Patowmack Company in 1785. Thomas Jefferson had advised against it, but Washington finally agreed with a promise to “turn the destination of the fund vested in me from my private emoluments, to objects of a public nature.” As president of the company in its early days, he accepted only a nominal salary.
Still, the effort mixed public and private interest in remarkable ways. In an effort to settle Maryland and Virginia’s competing claims to jurisdiction over the Potomac River, Washington set in motion a series of meetings that ended up leading to the Constitutional Convention, over which he presided.
Delegates to that convention agreed that executive officers of the new national government they were creating could not accept “any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State” without congressional consent, and could be thrown out of office by Congress for taking bribes from anyone. But they didn’t make any rules constricting officials’ investments and business interests.
If they had, much of the nation’s nascent commercial activity might have ground to a halt. The U.S. was short on both potential government officials and potential investors, so combining the two activities was common. The New York economy, for example, was dominated by what historian Brian Murphy calls “political entrepreneurs” — Aaron Burr, DeWitt and George Clinton, Robert Fulton, Alexander Hamilton, Robert Livingston.
“Creating a dynamic marketplace required the interposition of state power, and in the view of this cohort, the state was supposed to be actively aiding the ambitions of the ambitious; for them, the controversy most often concerned whose enterprising plans merited support.” [Murphy writes.]
Washington appears to have shared this view, although he also concluded that actively advocating for his personal interests while president would be bad form. He stayed publicly silent during the debate over where to locate the nation’s new capital, but was clearly thrilled when a site a few miles upstream from Mount Vernon was chosen. He bought property in the new city, and in a 1792 letter acknowledged the “intimate connection in political and pecuniary considerations” between the city’s prospects and his Patowmack Company plans.
Washington held on to the Patowmack Company shares until his death. He did try to get rid of his Western lands in 1794, but couldn’t find a buyer. In his will, he stuck to his promise and deeded the Patowmack shares to the state of Virginia for the establishment of a university. His 49,083 acres of land, which he valued in his will at $428,935 (about $8 million in today’s dollars), went to his heirs.
A few historians think Washington’s real estate and canal activities were way out of line. Achenbach quotes … author Thomas Slaughter, who charges that the Father of Our Country “lied, broke the law, and betrayed public trusts in pursuit of private gain.”
Achenbach, on the other hand, concludes, “There is remarkably little tarnish to be mined in the Washington archive.” The Patowmack Company was a labor of love for him, not an income stream. In fact, it was a money drain; he lent it $3,498 the year before he died. And while his Western lands gave Washington an interest in improving transportation links, pretty much everybody else in the country shared that interest. In fact, it was the New York political entrepreneurs who finally succeeded in linking East and West with the completion of the Erie Canal in 1825.
Since Washington’s time, the rules on outside income for federal officials have gotten stricter — some say too strict. Presidents aren’t subject to all the limits, and President-elect Donald Trump has said he will simply put his hotels and other businesses in a blind trust to be run by his children. But the businesses are so public and so inextricably linked with him, and his children so involved in his political life, that it seems impossible for the trust to be truly blind.
Trump also has lots of overseas investments and loans that may run afoul of the constitutional ban on presents or emoluments from foreign states. They also make it awfully hard to argue, as the political entrepreneurs of the early republic often could, that his business interests coincide with the national interest. The potential conflicts are really endless for Trump unless he sells off his businesses. Selling them off will be problematic given how — as already noted — inextricably linked they are with his person, but the alternative seems to be a presidency from which there is endless “tarnish to be mined.”
So no, Donald Trump is not George Washington. But you probably knew that already.