The Residence Act of 1790 included which compromise regarding the location of the national capital?

• A. The capital would be placed in the North in exchange for funding by the South
• B. The capital would be placed in the South in exchange for the North funding debts
• C. The capital would be placed in Philadelphia
• D. The capital would be placed in New York

Answer: (B)

The Estates Act tied where the capital would sit to a political bargain over debt. It authorized establishing a national capital along the Potomac River and gave the President authority to choose a site within a specified area, effectively creating a new seat of government in a southern-adjacent location. This location was part of a compromise to win Southern support for the federal assumption of state debts, which Northern creditors and policymakers favored as part of a national financial plan. So the essence is: the capital would be placed in the South in exchange for the North backing the federal assumption of state debts. The ideas of placing the capital in Philadelphia or New York aren’t what the Residence Act enacted, and the phrasing about North funding debts captures the debt-assumption bargain that accompanied the capital location.