Thursday, April 26, 2007

Jefferson and the Louisiana Purchase

There is also an interesting article about Jefferson and Louisiana. Jefferson wanted to explore Louisiana before the US owned it, but as this was claimed by several powers, he needed his explorations to be kept secret:
The President planned to ask Congress for the $2,500 in his budget message in early 1803, but his treasury secretary, Albert Gallatin, cautioned against it, recommending instead a confidential message, since the expedition would enter lands claimed by other countries and it would be unwise to needlessly antagonize foreign powers. In this case, that meant the British, who claimed land in what is now the Pacific Northwest, and the Spanish, who still controlled the Louisiana Territory since the French had not yet arrived to take possession.

You can see part of Jefferson’s confidential message to Congress here, but you can access the entire piece through NARA.

Jefferson’s message first talks about contact and trade with the Native Americans and the importance of mapping the area, but then outlines his real reason:
Jefferson then raised the real reason for his "confidential" message: "The appropriation of two thousand five hundred dollars 'for the purpose of extending the external commerce of the US,' while understood and considered by the Executive as giving the legislative sanction, would cover the undertaking from notice and prevent the obstructions which interested individuals might otherwise previously prepare in its way."

Now Jefferson didn’t know it at the time, but by the time that Lewis and Clark left for Louisiana, the US would already own it.

Another article in Prologue that looks at the collection of documents from this historic purchase.
Jefferson’s original purpose in approaching France was the purchase of New Orleans:
Jefferson's men were in Paris because he wanted to buy the port of New Orleans. To him, New Orleans was key: Whoever owned it would be America's natural enemy because that nation would control the channel through which produce from more than a third of the United States had to pass.

New Orleans had been back and forth between France and Spain. Jefferson wanted to get control of New Orleans. He sent James Monroe to New Orleans to join the Ambassador already in Paris (Robert Livingston) to negotiate this delicate deal.

But a surprise change came up – the French foreign minister, Talleyrand, offered the more than New Orleans – the entire Louisiana Territory. Monroe and Livingston signed the deal on April 30. Jefferson didn’t even know about it until July 3rd and didn’t see the paperwork until July 14th. Now we get the to crunch time - Jefferson was worried about the constitutionality of purchasing that much land and spending that much money (15 million remember was the purchase price of Louisiana) and thought he might need a constitutional amendment saying the President could buy land. BUT Napoleon was getting antsy and threathening to void the deal if the US didn’t make a move quickly. So Jefferson ignored the tinge about constitutionality and pushed for a quick ratification of the treaty to make Napoleon’s deadline. The Senate ratified the treaty 24 to 7 on October 20th and the next day the American and French envoys signed the treaty.

Now comes the hard part – the financing. French banks wouldn’t deal with the American stock (for fear of English retribution), so two private firms were approached to conduct the sale. The story of this is complex and interesting:
Now the real work of implementing the treaty and the two conventions began. Because of a possible war with England, French banks would neither buy nor market the American stock. So Livingston and Monroe suggested that two firms, Baring and Company of London and Hope and Company of Amsterdam, conduct the sale of the stock.

Hoping the suggestion would be viewed favorably, between May 3 and May 5, 1803, Alexander Baring of Baring and Company was given powers of attorney by both companies for entering into negotiations with France and the United States. On May 28, Barbé-Marbois and the American ministers exchanged correspondence relating to what was now called the American Fund. France approved the suggestion and signed a contract with Baring and Company and Hope and Company for the negotiation of the American Fund, witnessed by Livingston and Monroe, on June 6. On the same day, Barbé-Marbois wrote to Secretary of the Treasury Albert Gallatin that Baring would be arriving in America to begin the transfer of stock.

In the United States, Baring was granted more detailed powers of attorney by Hope and Company on July 20 and Baring and Company on August 12 as to the American Fund. He was now able to negotiate the number and amounts of certificates to be transferred, to whom the certificates would be made, and the place at which interest would be paid, among other points. The actual fiscal details fell into place, and the $11,250,000 became more than a figure.

The challenge, then, was getting the stock to Europe.

On December 1, Baring asked Gallatin for the stock to be issued, with receipts ($3,750,000 for Baring and $7,500,000 for Midshipman John B. Nicholson to be delivered to Lt. James Leonard for delivery to Livingston in Paris; Livingston would give a receipt to Leonard upon receiving the stock).

Gallatin wrote a note to Jefferson asking for the date possession was taken of New Orleans so that the register of the Treasury, Joseph Nourse, could fill in the date on the stocks from which interest was to be calculated. Jefferson replied on the bottom of the note that the date was December 20 and sent it back to Gallatin. Gallatin and Baring agreed that the funds would be paid yearly in four installments, and Jefferson approved. A warrant for the preparation of stock certificates for $11,250,000 at 6-percent interest was sent by Gallatin to Nourse, stating that the certificates were not to be issued without further orders from Gallatin.

On January 16, 1804, Jefferson sent a warrant to Gallatin to issue the certificates, and the same day Gallatin sent a warrant to Nourse to deliver certificates for $3,750,000 to Baring and another $7,500,000 in certificates to be delivered to Livingston in Paris. Also on the same day, Baring requested Nourse to transmit two-thirds of the stock (the $7,500,000) to Livingston. Somewhere along the line, plans changed as Gallatin then instructed Nourse to deliver the stock to be sent to Livingston into the hands of Jefferson's private secretary, Lewis Harvie, who would act as messenger and sail from Norfolk. Nourse drafted a letter to the French chargé d'affaires, L. A. Pichon, and Baring, requesting instructions as to the delivery of the stock to Livingston. Pichon wrote to Gallatin the same day agreeing to the transmission arrangements.

On February 7, however, Gallatin informed Nourse that they were back to the original plan: The stock was now to be delivered to Midshipman Nicholson to deliver to Lieutenant Leonard, who would sail from New York. The delivery was made and documented on February 13 by a receipt from Leonard to Nicholson. Livingston acknowledged the delivery of the stock to him in Paris by issuing a receipt to Leonard. On April 28, Barbé-Marbois issued a quitclaim to Hope and Company, relinquishing France's claim to the territory.

To complete the transaction, in a letter to Gallatin from Bordeaux, France, Leonard enclosed a duplicate original receipt from Livingston for the stock Leonard delivered to him. Nourse received a letter from Edward Jones, clerk for Gallatin, in which was enclosed the original receipt from Livingston for the stock delivered by Leonard to him in Paris.

The article also contains an interesting history of the documents themselves – their journey to the National Archives as well as their preservation story.

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