Top 10 Facts About the Louisiana Purchase

10 Things Every American Should Know About The Louisiana Purchase

The Louisiana Purchase in 1803 must surely qualify as the most important and influential real estate deal of all time.  Before the treaty was signed the USA was a relatively weak country restricted in its expansionist aims by the Mississippi, the border with Louisiana, the lynchpin of France’s territorial aims in the New World.  With a poorly manned and equipped army decimated by Jeffersonian defense policy the prospect of war with the European powers was a potentially devastating threat.

American goods in their western territories had to either be transported across country to the east on a long and difficult journey or brought down the Mississippi and stored at New Orleans.  When the US rights to use New Orleans were suspended in 1802 the USA found not just its territorial but also its trade aims frustrated by French policy.   Realizing the strategic importance of the Mississippi and New Orleans Thomas Jefferson was willing to go to war to protect US interests but wanted to investigate potential peaceful solutions first.  When he sent envoys to speak with Napoleon he never expected to be offered a deal that would in effect double the territory he controlled.

The Louisiana Purchase effectively allowed the US to take its place as one of the leading nations of the world and is, as such, a key part of our history. Here, therefore, are 10 important facts that every American should know about the Louisiana Purchase.

10. The Louisiana Purchase Covered Much More Than Louisiana And Originally Included Part Of Canada

The U.S. almost owned Canada
The U.S. almost owned Canada

 

While the state of Louisiana was included in the original purchase it comprises only a relatively small portion of the area of land bought by Thomas Jefferson.  The Louisiana Purchase added over 828,000 square miles of land to the United States in territory covering the area between the Mississippi River and the Rocky Mountains.

In 1812, just nine years later Louisiana was the first state carved out of the territory to be formally admitted to the USA as the 18th State of the Union.  A total of 15 states were eventually created in whole or in part from the territories; this included, in addition to Louisiana, Arkansas, Iowa, Missouri, Kansas, Oklahoma, Nebraska, Minnesota, New Mexico, South Dakota, Texas, Wyoming, Montana and Colorado.  The area is so vast that it immediately doubled the size of the country.  Even today the land bought equals approximately 1/3 of the landmass of the United States.

The territory covered by the purchase also included parts of Alberta and Saskatchewan, this territory was ceded to the Britain in return for other land south of the 49th parallel when it was decided that a straight line border between the two countries would reduce survey disputes and make border management easier than it had been in the past.

9. Without the Louisiana Purchase, The USA Could Never Have Become as Preeminent On The World Stage

Napoleon had big plans for the Louisiana purchase
Napoleon had big plans for the Louisiana purchase

The Louisiana Purchase was important, not just because it increased the size of the young USA overnight but also because it helped to reduce the number of colonial interests the USA had to take into account in its domestic dealings.  Much of the land covered by the Louisiana Purchase was wild and controlled more by French and British fur trappers and traders than by the French or Spanish colonial administration.  There was always the danger that these traders would come into conflict with American settlers leading to tensions or even giving rise to the potential for war with the European powers.  America was, at this time, still a young and relatively vulnerable country, particularly given the failure of the Jefferson Administration to devote money to defense.

Napoleon of France had dreams of using the lands of Louisiana to provide crops to support his other Caribbean possessions and drive an empire in the new world.  Spain, a major though weak colonial power in the region, also had dreams of greatness.  Had the French empire been established it would have prevented American settlers from expanding westwards and, even if tensions did not escalate(as they did in years to come with the Mexican War), a French colony would have confined the USA to the states east of the Mississippi, a much smaller country and unlikely ever to be the world player that it subsequently became.

8. The French Had Only Just Obtained The Land From Spain When They Sold It On To The USA

The French Flipped the Louisiana Purchase
The French Flipped the Louisiana Purchase

France explored and settled the Mississippi River from the 1682 onwards and, for a time, controlled more land in what eventually became the continental United States than any other colonial power.  In 1762 France passed all of its American land west of the Mississippi to Spain, ceding the eastern domains to Britain.

As such, for many years the area covered by the Louisiana Purchase was claimed by Spain which was very much an absentee landlord.  Over much of the inland territory their ownership was never anything more than nominal and vast tracts were already being settled by American pioneer families giving rise to the potential for hostilities between America and a European colonial power.

During the Napoleonic Wars relations between France and Spain started to change.  In 1800 the Spanish signed the Treaty of Ildefonso in which they agreed to return the territories of Louisiana to France.  France wanted to become a key colonial player in the New World and saw control of Louisiana as a lynchpin in this concept.   The idea was that Louisiana would act as a breadbasket for France’s potentially profitable Caribbean colonies.  France took formal possession of Louisiana only in 1802 and made preparations to send French Troops to the New World, sending an army to the island of St. Domingue to put down a slave revolt and preparing another one to land in continental America.

7. The USA Were Interested In The Purchase Because They Wanted To Control New Orleans

The U.S. knew New Orleans would be hot
The U.S. knew New Orleans would be hot

When the US Government heard of the Treaty of Ildefonso it gave rise to grave concerns.  American settlers relied on the Mississippi as a prime means of communication and to export trade goods safely and quickly.  Although moves were made to establish other ports New Orleans was the only one that connected the Mississippi with the sea.  From 1795 the US and Spain had, in the Pinckney Treaty, established the right for American farmers to use New Orleans without incurring export fees.  When the French took control of Louisiana and New Orleans in 1802 they revoked this ‘right of deposit’.

This revocation together with Napoleon’s stated aims for a New World colony threatened American expansion to the west far more than the nominal Spanish control ever had.  There was real concern that the situation would lead to war between the US and France, a situation exacerbated by American support for rebels in St Domingue and a refusal to advance credit to France despite prior support and a later formal declaration of neutrality.

Reluctant to go to war (Governors close to the Mississippi were arming their militias following the news that Napoleon was preparing to send troops to the Americas), President Thomas Jefferson sent envoys to Napoleon to negotiate the purchase of New Orleans together with a small amount of buffer territory for a sum of $10 million as a best case scenario or, in the worst case, to return the right to use New Orleans.  The envoys were somewhat surprised to be offered the entire territory of the purchase for the sum of $15 million and, despite the move exceeding their authority they agreed immediately in order that the offer could not be withdrawn.

6. The French Sold Their Land In The New World To Prop Up Napoleon At Home

Napoleon needed gold and needed it fast.  Hence the Louisiana Purchase
Napoleon needed gold and needed it fast. Hence the Louisiana Purchase

Napoleon was a man with dreams of grandeur.  Not only did he want to control Europe (going so far as to try to conquer Russia), he wanted to control a stake in the New World as well.  As such he negotiated the Treaty of Ildefonso with the Spanish to arrange for the return of Louisiana to French control.  Napoleon’s dreams for a new France never, however, truly managed to get very far.  His colony in St Domingue (now Haiti) was in the grip of a full scale rebellion, the soldiers sent to suppress the revolt came down with yellow fever in their droves, rendering the Caribbean army all but useless.  Napoleon started to gather more troops for dispatch to Louisiana but was also faced with the need to fight Britain in Europe.  Without the profitable Caribbean colonies France has little use for Louisiana and Napoleon did not have the funds or manpower to fight in Europe and in the Americas.

The American proposal for the purchase of New Orleans and adjacent land gave Napoleon new possibilities.  The sale of New France would raise a lot of money very fast, he could arrange for debts to the US to be forgiven and therefore relieve France of the responsibility of loan payments and he would free up the troops that he had gazetted for Louisiana, allowing them to join the fight against Britain.  Napoleon’s chief advisors, including his brother, were against the sale but Napoleon was convinced that it was the only way to finance war in Europe and that the territories would be lost to him in any event.  The decision led to an unedifying bath fight between Napoleon and his brother whom he splashed with dirty bathwater.  In the end, however, Napoleon got his way.  Better to get money for Louisiana upfront than have to pay to fight a war to protect it and lose it anyway.

5. The Louisiana Purchase Bankrupted James Munroe

Munroe was forced into bankruptcy
Munroe was forced into bankruptcy

James Munroe was a close friend of then President, Thomas Jefferson.  He also had an interest in opportunities for the west as he owned land in Kentucky.  Thomas Jefferson appointed him as his chief negotiator and minister in Paris, along with Thomas Livingstone, and authorized him to negotiate for the purchase of New Orleans on the best terms possible.  When the two men were offered the entire territory for only 150% of what they had been willing to pay for New Orleans alone they did not hesitate to exceed their authority and agree the Purchase.

At the time that James Munroe was sent to France his term as Governor of Virginia was drawing to a close.  He had exhausted almost all his assets and was hoping to spend some time practicing law in order to rebuild his bank balance.  Instead he was forced to represent his country abroad, a duty which came at great personal cost.  He had to sell his household belongings in order to be able to afford to travel to France.  He ended up in significant debt as a result of his diplomatic work which he never, even as President, managed to clear.  Towards the end of his life he had to sell his much loved Virginia Estate and live with his daughter and her family.

4. The Louisiana Purchase Led To the Lewis And Clarke Expedition

Lewis and Clark got their expedition thanks to the Louisiana Purchase
Lewis and Clark got their expedition thanks to the Louisiana Purchase

Following the purchase no-one really knew exactly how much territory was covered or where the boundaries were.  The movement of territory between France and Spain had never been properly surveyed, defined or documented.  Spain immediately lodged a protest with the United States, claiming that the purchase could only cover the land it had ceded to France which, they claimed, covered only the land on the west bank of the Mississippi river.  This was due to the Spanish administration of the area; Louisiana (ie the land along the Mississippi, had been governed from Cuba whereas the Spanish land to the west was under a separate jurisdiction.  The US, on the other hand, claimed all the land between the Mississippi and the Rockies.  The dispute with Spain was finally settled in 1818 when the Adams-Onis treaty ceded Florida to the US and settled the boundary between the US and New Spain (Mexico).

In order for the United States to truly understand the nature and extent of the land that they had purchased several exploratory surveys were commissioned.  The most famous of these was the Lewis and Clarke expedition.  The intrepid pair and their support team left St Louis in 1804 in order to explore the northern reaches of the Louisiana Purchase.  They travelled, initially, along the Missouri before turning west to find the Pacific.  The expedition, which lasted 2 years, enabled the US to fully understand the nature of the land it had bought and start to analyze its potential for exploration, settlement and development.  It also led to the discovery of the Oregon territory, an important step in the westward settlement of the USA.

3. Congress Almost Refused To Authorize The Purchase (Which Led, Indirectly, To the Civil War)

The Civil War caused in part by the conflict arising out of the Louisiana Purchase
The Civil War caused in part by the conflict arising out of the Louisiana Purchase

Once news of the agreement with France reached the USA, President Thomas Jefferson was in quandary.  He was, himself a strong proponent of states’ rights and believed in abiding by the letter of the constitution and there was no provision in the constitution that permitted him to agree to the Purchase.   There was, therefore, significant opposition to the Purchase by those who supported this same position in Congress.

Thomas Jefferson, however, realized that the Purchase would be hugely beneficial to the USA, both by securing territory for western expansion and removing the possibility of war with France.  He therefore put aside his scruples and, putting practical benefit before personal ideology, supported the expansion.  He himself claimed to have stretched the power of the office of the President ‘until it cracked in order to secure the land for the USA and the vote passed the Senate 24/7.  The decision and the political waves it set in motion had long term ramifications as it gave rise to the doctrine of implied federal powers within the constitution, a problem which would become one of the causes of the Civil War.

2. The Louisiana Purchase Was The Largest Single Land Acquisition By The USA

The Louisiana Purchase was the single largest land purchase in U.S. History
The Louisiana Purchase was the single largest land purchase in U.S. History

While the USA acquired much of its present day territories through natural expansion a surprising volume of the US was acquired by way of purchase.

In addition to the Louisiana Purchase the lands of the USA were expanded through the purchase of Florida from Spain in 1819. The USA did not make any payment of capital to Spain for this purchase but did indemnify Spain for damages perpetrated by American rebellions against Spanish rule – at a sum of about $5 million.

Purchases of land in the south west of what is now the United States extended the territory by a significant degree.  The 1848  Treaty of Guadalupe Hidalgo negotiated the cessation of hostilities in the Mexican War and allowed the USA to purchase 200,000 square miles covering  part of Colorado together with Arizona, Nevada, New Mexico, Texas, Utah and California for the sum of $18 million.  In 1853 the USA again extended its territory by way of land purchase with the so called Gadsden Purchase adding the territories of Southern Arizona and Southern New Mexico to the USA and paying a further $10,000 to Mexico.

The final major expansion of territory by way of purchase took place in 1867 when the 586,412 square miles that make up Alaska was purchased from the Russians $7.2million.

While all these purchases added large amounts of land to the territory of the continental United States none of them matched the Louisiana Purchase for size or value for money.

1. The USA Paid Less Than 3 Cents An Acre – An Amazing Real Estate Bargain

The Louisiana Purchase was a good deal, 3 cents an acre
The Louisiana Purchase was a good deal, 3 cents an acre

$15 million, particularly in 1803 dollars is a lot of money but given that the USA was willing to pay $10 million for New Orleans alone the Louisiana Purchase represents possibly the best real estate deal in history working out at about 3 cents an acre for some of the most productive grain producing land in the USA.  The USA did not even need to find all of the $15 million as almost $4 million was for the forgiveness of French debt rather than an actual transfer of funds.

Despite the purchase being a fantastic deal the USA had problems gathering the money together to pay France.  A down payment of $3 million in gold was made immediately and the US started to look for ways in which to raise the remainder of the funds.  The government worked with the financing houses of Barings of London and Hope & Co of Amsterdam to issue 6% Government Bonds which were paid to the French Government.  These bonds were subsequently purchased by the banking houses at a profit, for them, of $1.5 million.  This was the first ‘mega deal’ of its type and was a risky venture for both the countries and banking houses concerned.  Because of the interest paid on the bonds the final price was somewhat higher than the $15 million negotiated and came to a total of $23 million by the time the final payment was made in 1823.  The final price may have been somewhat higher than the original proposal but it still represented the most successful real estate deal of all time.

 

The Louisiana Purchase is unique in history.  Not only was it the first land purchase of its type but led to the first ever offer of US Government Bonds to the public and was the very first ‘mega deal’ of its type.  No country, no corporation had ever spent so much money in a single transaction at any previous point in history and no bank had ever underwritten such a large undertaking.

The territory was so vast that today it encompasses 15 of the states between the Mississippi and the Rocky Mountains and even a little bit of Canada.  The USA undertook no due diligence before the purchase and had to rely on the reports of expeditions such as the Lewis and Clarke Venture to report back on the value and usefulness of the land they had bought.  The purchase cost of $15 million in1803 is worth $283 today.  Given that Hurricane Katrina caused over $200 billion in damage to New Orleans alone it can be seen just what a fantastic bargain the Purchase was.