Final answer:
The decision to place the capital on the Potomac River was part of the Compromise of 1790 reflected in the Residence Bill, influenced heavily by negotiations between Jefferson, Madison, and Hamilton, with George Washington supporting the establishment.
Step-by-step explanation:
The decision to place the national capital city on the Potomac River was a result of the Compromise of 1790, a negotiation between Thomas Jefferson, James Madison, and Alexander Hamilton. This compromise included the passing of the Residence Bill, which designated the capital would temporarily move to Philadelphia while the permanent site on the Potomac River was being prepared. It also entailed the Assumption Bill, where the federal government agreed to assume state debts. Indeed, President George Washington played a significant role in the establishment of the capital through his advocacy and the support he provided during the selection process.