Exhibition: The Louisiana Purchase

6: Conclusion

The precise outcome of the transaction for the bankers is not known but they seem to have fared well. All the bonds allocated to the markets were disposed of without difficulty and, it seems, at or above par.

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. - Robert Livingston, 2 May 1803

As they would have been purchased from France at about 86.5% of face value, excluding the subsequent discount, and as the expenses of the issue would have been comparatively modest, much of the FF8 million (US$1.5 million) discount would have pocketed by Barings and Hopes. On the basis of the cost of US real estate at the time, the purchasing power of US$1.5 million would have enabled the acquisition of an area equivalent to the State of Nebraska!

For the USA the whole transaction was immensely successful. The country was now the unquestioned power in North America and any European threat to its sovereignty had been removed. No blood had been spilled. US credit in the international markets had been firmly established and was confirmed by the service of the Louisiana bonds with impeccable regularity and by their repayment as scheduled. This was largely out of customs revenue, much of which was collected in the port of New York and processed at the site of Federal Hall.

And while Amsterdam and London bankers had made handsome profits – although their risk had been high – the cost to America had been a mere US$15 per square mile of territory. The last words should be those of General Horatio Gates. ‘Let the land rejoice,’ he told President Jefferson in 1803, ‘for you have bought Louisiana for a song.' It was surely the real estate transaction of all time.

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