Exhibition: The Louisiana Purchase
1: The Greatest Real Estate Transaction in History
In the history of the United States the Louisiana Purchase is a hugely important event which doubled the size of the country. Less well-known is the way the Purchase was financed, which was through the issue of US government bonds in Amsterdam and London.
It was an event of the utmost importance in the development of international finance, involving for the first time on a significant scale the co-operation of the major European capital markets in financing the requirements of the New World. This was to become the hallmark of international finance in the nineteenth century.
The Territory of Louisiana formed the western boundary of the United States. It was a vast and unmapped area extending, it was thought, to over one million square miles. It stretched across the entire Mississippi Valley, to the Rockies in the west, to Canada in the north and southwards to the Gulf of Mexico. Thirteen states were to be carved from it, either in whole or in part.
In 1801 Spain secretly ceded the Territory of Louisiana to France, but this only became publicly known in 1802 following the temporary outbreak of peace between Britain and France. The strategic implications of the transfer alarmed the US government, which feared French territorial ambitions over its own territory. President Jefferson dispatched an emissary to France. He was well received by Napoleon, who had already concluded that Louisiana would be a liability in any future war with Britain. So when the US government offered to buy Louisiana, France was a willing seller. It is a rare example in international history of land transfer through voluntary negotiation rather than by military action.
Next: How did the US Government fund such a large transaction? »
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