Why did Washington initially envy white bay? Why does he no longer envy them?

I assume you mean "white boy", as there is no reference to a "white bay" in the novel. Washington envied the "white boy" for his ancestry. Over time, he no longer felt that envy because the "white boy" had to live up to his family's expectations or be considered a disgrace. Booker said that the "Negro boy" wasn't expected to succeed, thus, he could not fail.