Louisiana Purchase

• 1. Introduction

  ›

  The Louisiana Purchase was one of the largest land transactions in history. On the 30th of April 1803, at the Hotel Tubeuf in Paris, American diplomats Robert Livingston and James Monroe signed their names to a treaty that handed them far more than they had come to buy. They had arrived with instructions to purchase New Orleans. They left having agreed to acquire roughly 828,000 square miles of territory for fifteen million dollars. After the signing, Livingston declared, "We have lived long, but this is the noblest work of our whole lives... From this day the United States take their place among the powers of the first rank."

  But what exactly did the United States buy? France held direct control over only a small fraction of the land. Most of it was inhabited by Native Americans who had never ceded their territory to any colonial power. The price worked out to less than three cents per acre. And the man who sold it, Napoleon Bonaparte, was offering something that legal scholars and political rivals immediately questioned was his to sell at all. How a desperate French military campaign in the Caribbean led to this sweeping transaction, and what it truly cost, is a story that reaches far beyond any real estate deal.

• 2. Napoleon's Gamble

  ›

  France had lost Louisiana to Spain in 1762 via the secret Treaty of Fontainebleau, following defeat in the Seven Years' War. Napoleon, serving as First Consul of the French Republic, reversed that arrangement in 1800 through the equally secret Third Treaty of San Ildefonso, trading territories in Tuscany to Spain in exchange for the return of Louisiana. His ambition was to rebuild a French colonial empire in North America, with Saint-Domingue in the Caribbean serving as its economic engine.

  Saint-Domingue had once generated enormous wealth from the labor of enslaved people. Napoleon wanted those revenues restored. In December 1801, he dispatched General Charles Leclerc, his brother-in-law, to retake the island from Toussaint Louverture, who had consolidated power after a slave rebellion. Leclerc's forces captured Louverture, but fierce resistance and disease destroyed the expedition. By early 1803, France had lost the campaign.

  Without Saint-Domingue's revenues, Louisiana had no strategic value to Napoleon. War with Britain was looming again, and he knew that Louisiana would be an easy target for British or American forces. Out of frustration toward Spain, which had not yet completed the formal transfer of the territory to France, and recognizing a chance to profit from land he did not yet officially possess, Napoleon pivoted. On the 10th of April 1803, he informed Treasury Minister Francois Barbe-Marbois that he was considering selling the entire Louisiana Territory to the United States.

• 3. Jefferson's Long Pursuit

  ›

  Acquiring Louisiana was a long-standing goal of President Thomas Jefferson. New Orleans occupied the center of that ambition. The city controlled access to the Mississippi River's mouth, and it was already the essential shipping hub for agricultural goods flowing from the lands west of the Appalachian Mountains. Pinckney's Treaty, signed with Spain on the 27th of October 1795, had granted American merchants the right to store goods in New Orleans for export. When Spain revoked that right in 1798, the outrage was immediate.

  Jefferson sent Robert Livingston to Paris in 1801 with authorization to purchase New Orleans. When progress stalled, he sent James Monroe in 1803 as a reinforcement, with instructions that if French talks failed Monroe should proceed to London to negotiate an alliance with Britain instead. Jefferson also worked through back channels. Pierre Samuel du Pont de Nemours, a French nobleman living in the United States, used his close ties to both Jefferson and prominent French politicians to open a separate line of diplomacy with Napoleon, introducing the concept of a broader purchase as a way to resolve tensions between the two nations.

  Jefferson had authorized Livingston to pay up to ten million dollars for New Orleans and its surrounding area. When Barbe-Marbois offered the entire Louisiana Territory for fifteen million on the 11th of April 1803, just days before Monroe even arrived in Paris, Livingston and Monroe quickly agreed. They were certain Napoleon could withdraw the offer at any moment. Jefferson had not anticipated such an offer, but Livingston was confident the United States would accept.

• 4. Constitutionality and Opposition

  ›

  Jefferson was a strict constructionist who believed the federal government could exercise only those powers explicitly granted by the Constitution. Nothing in that document mentioned purchasing foreign territory. He seriously considered drafting a constitutional amendment to authorize the purchase. His cabinet talked him out of it. Secretary of State James Madison, widely known as the "Father of the Constitution," reassured Jefferson that the treaty-making powers granted to the president in Article II, Section 2, were sufficient. Treasury Secretary Albert Gallatin added that unless such a power was explicitly forbidden, it remained available to the president.

  The Federalist opposition attacked from multiple directions. Many argued that France did not legally own Louisiana and therefore had nothing to sell. They questioned the constitutionality of the purchase, criticized its fifteen-million-dollar cost, and warned that new western states would dilute the political power of the Atlantic seaboard. Senator Timothy Pickering of Massachusetts went so far as to explore forming a separate northern confederacy. There were also concerns in Congress about whether the French, Spanish, and free Black people living in New Orleans could properly be granted citizenship under the treaty's terms.

  The House of Representatives came close to blocking the deal. A vote to deny funding failed by only two votes, 59-57. The Senate ratified the treaty on October 20, with a vote of 24 to seven. The following day, the 21st of October 1803, the Senate authorized Jefferson to take possession of the territory and establish a temporary military government. Spain separately protested the transfer, arguing that France had promised not to sell Louisiana to a third party, and that France had not fulfilled the conditions of the San Ildefonso treaty. The French government dismissed both objections.

• 5. Financing the Deal

  ›

  The United States Treasury did not hold fifteen million dollars in cash. The country borrowed the sum, largely from British and Dutch banks, at an annual interest rate of six percent. The transaction was handled by two banking houses working in partnership: Francis Baring and Company of London and Hope and Company of Amsterdam. Francis Baring had recently become the official banking agent of the U.S. government in London. Alexander Baring, the son of Francis, traveled to Paris in April 1803 alongside Pierre Labouchere from Hope and Company to help finalize terms.

  The final structure split the payment in two parts. The U.S. assumed up to twenty million francs worth of French debts owed to American citizens, equivalent to about three and three-quarter million dollars. The remaining sixty million francs, roughly eleven and a quarter million dollars, were covered through U.S. government bonds carrying six percent interest, redeemable between 1819 and 1822. Barings and Hopes purchased those bonds at a discount. Because Napoleon wanted cash quickly, the banks agreed to an initial payment of six million francs upon issuance of the bonds, followed by twenty-three monthly payments of two million francs each.

  The banks had already advanced France ten million francs in July 1803, months before the first bonds were formally issued on the 16th of January 1804. In April 1804, they transferred an additional forty point three five million francs to fully discharge their obligations. Despite France and Britain being at war during this period, the British government initially allowed the transaction to proceed, preferring neutral American ownership of Louisiana to French control. In December 1803, the British directed Barings to halt further payments to France. The last of the Louisiana Purchase bonds were paid off by the U.S. Treasury in 1823. With interest, the total cost of the bonds came to exactly $23,313,567.73.

• 6. Transfers and Formal Ceremony

  ›

  The legal chain of ownership moved through three governments in just weeks. Spanish officials formally handed Louisiana's colonial administration to France in a New Orleans ceremony on the 30th of November 1803. Three weeks later, on the 20th of December 1803, France transferred New Orleans to American officials in a flag-raising ceremony at the Cabildo, in the Plaza de Armas, the plaza now known as Jackson Square.

  Upper Louisiana required a separate ceremony. On March 9 and 10, 1804, in St. Louis, a ceremony now commemorated as Three Flags Day transferred ownership first from Spain to France, and then from France to the United States. From March 10 through the 30th of September 1804, Upper Louisiana was administered as a military district under Amos Stoddard, appointed by the War Department as its first civil commandant.

  Beginning the 1st of October 1804, the purchased land was divided into two administrative units. The Territory of Orleans covered most of what would become the state of Louisiana, with New Orleans as its capital. The District of Louisiana, which was temporarily governed by the Indiana Territory's existing administration, was renamed the Territory of Louisiana the following year, with St. Louis as its capital.

• 7. Slavery and the Territory

  ›

  At the time of the purchase, Louisiana's non-native population numbered around sixty thousand people, roughly half of whom were enslaved Africans. The territory's European inhabitants were primarily of French, Spanish, and Mexican descent and largely Catholic. South Louisiana had also recently absorbed a large influx of French-speaking refugees from Saint-Domingue, many of them planters who had brought enslaved people with them when fleeing the Haitian Revolution.

  Slaveholders across the South feared the purchase might inspire enslaved Americans to follow the example of Saint-Domingue. They pressed for laws explicitly permitting slavery in the new territory. The territories formed from the Louisiana Purchase did pass slavery laws, though these incorporated elements from prior French and Spanish rule. Spain had prohibited the enslavement of Native Americans in 1769, but some people of mixed African and Native American descent were still being held as slaves in St. Louis when the U.S. took over. A freedom suit that traveled from Missouri to the U.S. Supreme Court finally ended the enslavement of Native Americans in 1836.

  As states were carved from the territory, each new state's status on slavery became a point of fierce political conflict. Southern states pushed to extend slavery westward; northern states resisted. The Missouri Compromise of 1820 provided a temporary resolution. The institutionalization of slavery within Louisiana Territory's legal framework contributed to tensions that built toward the Civil War a half century later.

• 8. What Was Actually Purchased

  ›

  France did not own most of what it sold. The Louisiana Purchase treaty transferred to the United States what legal scholars later called the preemptive right to obtain Indian lands, to the exclusion of other colonial powers. The actual inhabitants of the vast majority of the territory were Native American tribes who had never ceded their land to France, Spain, or anyone else. The transaction was negotiated entirely without consulting them.

  The four decades following the purchase brought a series of court decisions and federal policies that displaced many tribes from lands east of the Mississippi into the newly acquired territory. That process culminated in the Trail of Tears. The legal disputes this generated persisted into the mid-twentieth century. Tribal suits during the 1930s seeking historical damages led Congress to pass the Indian Claims Commission Act in 1946. Felix S. Cohen, the Interior Department lawyer who helped pass that legislation, observed that "practically all of the real estate acquired by the United States since 1776 was purchased not from Napoleon or any other emperor or czar but from its original Indian owners."

  A 2017 estimate placed the total cost to the U.S. government of all subsequent treaties and financial settlements up through 2012 for the Louisiana Purchase lands at around 2.6 billion dollars. Converted to 1803 values, that figure is approximately 418 million dollars, meaning the fifteen million paid to France represented roughly 3.5 percent of what the United States ultimately paid for the same land when accounting for what was paid to Native nations as well.