THE NATION'S capital, a.k.a. Babylon on the Potomac, Hollywood on the Potomac and the home of Potomac Fever, didn't have to be built on the Potomac at all, and nearly wasn't. Two hundred years ago this month, the decision was made to build the capital city here. But the people who made that decision had other options. Boy, did they have options.

Nearly two dozen cities and towns wanted the infant nation's permanent capital for their own. There were schemes and counter-schemes, bargains made and broken; indeed, the battle that resulted in the establishment of Washington, D.C., raged for years. Appropriately enough, it was settled in true capital fashion, as part of a budget compromise. But we're getting ahead of ourselves . . . .

Our opening volley came in Philadelphia. It's June of 1783. You're the Continental Congress, and there are soldiers outside Independence Hall pointing muskets at the windows and shouting. They're your own soldiers (the Revolutionary War ended just months ago), and they want their back pay. You ask the Pennsylvania authorities for help. Not right now, they say. Maybe later. So you hightail it out of town, to Princeton.

That wasn't the first time the Congress had had to move, mind you. They'd started out in Philadelphia in 1774, then moved to Baltimore, then back to Philadelphia, then to Lancaster and York (keeping ahead of British soldiers), then back to Philadelphia again in 1778. After Princeton, they'd go to Annapolis, Trenton and New York. Congress needed a place of its own.

It had had that idea before.

Four years earlier, in 1779, some members of the Continental Congress had discussed buying land near Princeton, and in January of 1783, the town of Kingston, N.Y. offered Congress one square mile all its own. In May, Annapolis made a similar offer. New Jersey offered a Delaware River site near Trenton. Virginia offered Williamsburg, or some undetermined location along the Potomac, if Maryland would do likewise on the opposite shore. Congress agreed to consider the question in October. After the soldiers arrived demanding back pay, the matter took on some urgency.

The question was: "Where?" The bonds holding the 13 states together were weak enough, with rivalries already forming -- between commercial and agricultural states, creditors and debtor states. Between, especially, the North and the South.

Each side saw advantages to capturing the new capital -- financial and logistical -- and each side had a favorite location. The North wanted the falls of the Delaware; the South, the falls of the Potomac. On Oct. 7, 1783, Congress voted, and the Delaware River site won.

But 10 days later -- with the Pennsylvania, Delaware and New Jersey delegations absent -- Congress voted again, this time to build a second capital, on the Potomac near Georgetown. And meanwhile, two temporary capitals, too -- one in Trenton, one in Annapolis. One wag suggested they build a single capital on a platform and wheel it from place to place. In any event, by the close of 1784 Congress had declared the twin-capital plan "inexpedient."

In the meantime, George Washington, retired from war, was touring the Western territories for his new Potomac Navigation Company. He became more convinced than ever that the Potomac was the gateway to the West -- Pittsburgh and the Ohio River being the West -- and vital to the nation's future, not to mention Virginia's.

He wasn't alone. Earlier that year, fellow Virginian Thomas Jefferson had written Washington: "All the world is becoming commercial . . . . Nature then has declared in favor of the Potomac and thro' that channel offers to pour into our laps the whole commerce of the Western world. . . . It behooves us that we open our doors to it."

Replied Washington, "My opinion coincides perfectly with yours." It didn't hurt that Washington's family owned land along the Potomac, "the value of which," he conceded, "would be enhanced" by increased business in the region.

But both 1785 and 1786 passed without further action. The nation was then trying to operate -- with minimal success -- under the Articles of Confederation, with its nearly powerless central government. By 1787, the country, torn by factionalism, seemed ready to dissolve.

To the rescue came the Constitutional Convention. The resulting document empowered the new federal Congress with exclusive jurisdiction over "such district (not exceeding ten miles square) as may. . . become the seat of government of the United States."

That's right: "as may become." With contenders for the place of honor now including Germantown, Pa., and Harrisburg and Wright's Ferry (now Columbia), Pa. (on the Susquehanna River); not to mention Yorktown and Reading, Pa., and Wilmington, Del., the Constitutional Convention decided to punt. They left the choice to the new federal Congress, which would meet in New York.

There were other, more urgent issues for that Congress to deal with in 1789, among them millions of dollars of state war debts left over from the Revolution. This was yet another issue splitting the country. Treasury Secretary Alexander Hamilton, a New Yorker, urged that the federal government assume the debts (good for the credit rating, and for Northern speculators), while most of the South was dead set against giving the feds any more power.

During the last month of the session, however, Southern members insisted that Congress resolve the issue of the capital, and the debate was on.

Everyone agreed that the permanent capital should be on a navigable river, and far enough inland to be safe from hostile attacks. And everyone but too-far-north New York agreed that it should be centrally located.

The question of siting the capital centrally amid the population was touchier. The North had the numbers; the South argued that a Potomac capital would soon balance things out. Accessibility to the Western territories also split the Congress; North and South read their maps differently.

Some argued further that the capital should be in a large city, because small towns would subject the lawmakers to influence; others thought large cities would be too distracting. Some thought it should be far enough south so the South wouldn't secede; others feared that if the South did secede, a southern capital would be exposed.

The debate sometimes turned nasty. The Potomac was called an "unhealthy wilderness"; the Susquehanna got called even worse. New Englanders would forego election rather than travel to the Potomac. If the North insisted on the Susquehanna, it would "blow the coals of sedition and endanger the Union." If the Potomac was the choice, "the whole of New England would consider the Union destroyed."

With such bitterness still rampant, why did the South insist on a vote? Simple -- they thought they had a deal with the Pennsylvania delegation: Philadelphia as temporary capital for 15 years, and then the permanent capital on the Potomac.

There was only one problem: The North had offered Pennsylvania an even better deal: New York as temporary capital, and then the Susquehanna/Wright's Ferry site as permanent. By the time the South found out, it was too late.

In the House, the vote was New York as temporary capital, and Wright's Ferry as the permanent site. In the Senate, it was also New York as temporary. And for permanent? Germantown.

Germantown, and a $100,000 guarantee from Pennsylvania Sen. Robert Morris, perhaps the country's richest man. Germantown came within a hair of becoming the capital. It survived Southern opposition in Congress, and only a last-minute parliamentary maneuver by Virginian James Madison necessitated yet another vote on the matter in Congress's next session.

May and June, 1790: "One of the longest and the most acrimonious" debates resumes.

Meanwhile, Treasury Secretary Hamilton is still pushing federal assumption of the states' war debts. At last count, he's one vote short in the Senate, five in the House. The South has been instrumental in defeating assumption, while northern speculators face debtor's prisons if it doesn't pass.

And then here comes Thomas Jefferson, back from France to become secretary of state. Jefferson runs into Hamilton, and they commiserate about the fate of the Union. Jefferson offers to host a small dinner party.

It's Jefferson, Hamilton and an influential southern congressman or two. They meet, they eat, they cut a deal: The South will hand over sufficient votes to pass assumption, a "peculiarly bitter" pill. And "to sweeten it a little"? The North will agree to put the permanent capital, after a 10-year stay in Philadelphia (to satisfy Morris), on the Potomac.

Hamilton delivers: On July 1, the Senate votes 14-12 for Philadelphia and Potomac. On July 9, it's the House's turn: 32-29. Squeakers, but good enough.

"About noon," writes President Washington in his diary for July 12, "had two bills presented to me by the joint committee of Congress. The one, an act for establishing the temporary and permanent seat of the Government of the United States . . . ."

Finally -- a district to be established on the Potomac someplace between the mouths of the Eastern Branch (now the Anacostia) and the Connococheague, some 80 miles north. Congress left it to the president to decide just where the 10-mile square would be positioned, and then to ready things for occupancy by Dec. 1, 1800. Not a penny was appropriated for purchasing land or anything else; the president was authorized "to accept grants and gifts."

On July 16, 1790, Washington signed the "Act of Residence" into law. Within 10 days, Congress had passed Hamilton's assumption plan.

Washington and his surveyors considered the various Potomac possibilities. Then, in January of 1791, he announced his choice: a Maryland/Virginia square -- a diamond, really -- that extended further south than Congress had directed, to include Washington's hometown of Alexandria -- if Congress approved. Congress approved.

In 1800, and despite rumors that it wouldn't, the federal government left Philadelphia for the "City of Washington, in the Territory of Columbia." The new arrivals found swamp and pastureland, a President's House and a Capitol still being completed, and 372 other houses.

The total number of executive branch arrivals moving into town was 126.

Rick Horowitz is a syndicated columnist.