The now graded grass lawn hill and park, was originally a jagged cliffs and bluffs of red clay which was mined in the 18th and 19th centuries after being first sighted and described by Captain John Smith of England on his voyages of exploration of the Chesapeake Bay from the first English colony at Jamestown, Virginia, in 1608.

The parade featured a 15-foot scale model of a fully rigged sailing ship named the Federalist led by then young naval hero Joshua Barney that was to be installed atop John Smith's Hill.

Revelers were having so much fun that they opted to slide the Federalist down the hill and launch it from "The Basin" (today"s Inner Harbor) to be sailed later down the Chesapeake Bay to the state capital at Annapolis, following then up the Potomac River to be presented to retired Continental Army General George Washington at his riverfront Mount Vernon estate plantation.

[3] Federal Hill's views were first put to commercial use in 1795 when, in cooperation with the Maritime Exchange, Captain David Porter established a "marine observatory" and signal tower on the site.

[4] A military battery was built on Federal Hill in anticipation of an attack by sea from the British who had occupied, raided and terrorized the Chesapeake Bay region during 1813–1814, under notorious Rear Admiral George Cockburn.

Two statues in memory of two of the three major battle commanders (General Smith and Maj. George Armistead) commemorate this important victory adorn the north side slope of Federal Hill Park today.

[9] The rebuilding of the Inner Harbor area in the late 70s and early 80s greatly increased interest in Federal Hill as an enclave of intimate residential streets within minutes of the city's business and entertainment heart.

[citation needed] Monuments commemorating history enhance the Park, cannons that once manned at Fort Federal Hill during the Civil War are featured, as well, embellishing the promenade that overlooks the downtown cityscape.

[2] At the foot of Federal Hill Park lie recreational features such as a basketball court (recently renovated by Baltimore-based Under Armour sportswear) and Rash Field, containing a variety of events and activities including beach volleyball and a gated kids playground area.