The Purchase of the Louisiana Territory by Lee Ann Potter, Karen Needles, and Marisa Wilairat

Teaching with Documents

THE LOUISIANA PURCHASE TREATY transferred ownership of nearly 828,000 square miles of land from France to the United States for $15 million—not quite four cents per acre. Even in 1803, this transaction, which nearly doubled the size of the United States, was a great deal. (Eventually, thirteen states, or parts of states, were created from this territory). But at the time the treaty was ratified, the U.S. national debt was almost $81 million, and the Treasury Department was in no position financially to simply write a check for the amount. So French Treasury Minister Marquis François de Barbe Marbois and U.S. representatives Robert Livingston and James Monroe negotiated a creative payment plan in April 1803 as part of the Louisiana Purchase Treaty. The treaty itself comprised three documents—the treaty of cession and two conventions. The two conventions detailed how the United States would pay. The first stated that sixty million francs ($11,250,000) would be paid by stocks with an interest rate of 6 percent and not redeemable for fifteen years. These became known as the Louisiana 6 percent stocks. The second convention outlined the assumption of claims made by U.S. citizens against France. In other words, it specified how U.S. citizens who were owed money by France were to be paid. The debts, amounting to $3,750,000, would be paid with 6 percent interest, and payment would commence sixty days after the exchange of ratifications. Immediately following the treaty’s ratification on October 20, 1803, President Thomas Jefferson asked Congress to pass the necessary laws to carry out the provisions of the treaty and Portrait of Secretary of the Treasury Albert Gallatin the conventions. Debates in both houses focused on the consti- tutionality of the purchase, the price, the commercial privileges Baring, the attorney for the two European banking institutions given to both France and Spain (which had retained shipping that had agreed to finance the purchase, Hope and Company of rights along the Mississippi River after transferring Louisiana Amsterdam and Baring and Company of London. Nourse was to France in 1800), and the admission of foreign people into further instructed to send $7,500,000 in stocks to the “Minister the United States. Within two weeks, both the Senate and the Plenipotentiary of the United States to the French Republic.” The House had passed bills authorizing the president to take pos- warrant detailing these instructions is included in this article. session of and govern Louisiana and authorizing the creation The stocks were then sold to international companies, of stock for the purchase. banks, and individual investors, and Napoleon Bonaparte, who The stocks were created, and on January 16, 1804, Secretary was then emperor of France, was paid cash by the two banking of the Treasury Albert Gallatin instructed Register of the Trea- institutions from the sale of the stock. sury Joseph Nourse to send $3,750,000 of stocks to Alexander

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Transcription of the Document To Joseph Nourse, Register of the Treasury: By virtue of the power to me given by the foregoing warrant, and in conformity to the Agreement between the French Republic and the Houses of Francis Bar- ing and Company and Hope and Compa- ny, concerning the stock to be created in pursuance of the Convention of the 30th of April 1803 between the United States of America and the French Republic—I, Albert Gallatin, Secretary of the Treasury of the United States, do hereby authorize and require you, Joseph Nourse, Register of the Treasury to deliver to Alexander Baring, Attorney for Francis Baring and Company and Hope and Company, Cer- tificates of the stock which has accord- ingly been created, to the amount of three millions seven hundred and fifty thousand dollars, being one third part of the whole of said stock;—and to transmit the remaining two thirds of said Certificates, amounting to seven millions five hundred thousand dollars, to the Minister Plenipo- tentiary of the United States to the French Republic.—And I do further authorize and instruct you, to cause to be entered on the books of the Treasury credits to the Proprietors of said stock in like manner as for the present domestic funded debt, and in conformity to the provisions contained in the Act of Congress passed on the tenth day of November, 1803. And for so doing this shall be your sufficient warrant. In testimony whereof, I have here- unto subscribed my hand and affixed the seal of the Treasury this Sixteenth day of January, one thousand eight hundred and four. Albert Gallatin Secretary of the Treasury

The claims of U.S. citizens against France were paid over a In 1818, using funds that had been gathered from duties on thirty-year period. The final cost was $3,000,738, leaving a small merchandise and tonnage, direct taxes, postage, letter patents, surplus of $11,731. In 1868, this was transferred into a surplus land patents, sales of public lands, fines, penalties, forfeitures, fund within the U.S. Treasury. and interest, the United States began annual installments to When stockholders began redeeming their certificates of repay the principal debt. stock, funds to pay the debt came from three sources: the banking The United States made the last payment on October institutions of Hope and Company and Baring and Company, 21, 1820, and the interest on the Louisiana stock ceased. and from the U.S. Treasury. As the stocks were submitted for The final cost for the Louisiana Purchase was approximately redemption, the value and interest were paid, and the stocks $23,221,320. were returned to the Department of the Treasury. Ledgers noted Note: The documents featured in this article come from the date, stock number, purchaser, and amount paid. Two pages General Records of the Department of the Treasury, Record from one of these ledgers are also included in this article. Group 56 and are located in the National Archives at College Park, Maryland.

Social Education 102 M a r c h 2 0 0 3 103 Teaching Activities 5. Ask students to select one of the main characters involved in 1. Lead a brainstorming session with students about basic con- the Louisiana Purchase and research his or her involvement. sumer economics. Begin by asking students how they pay for Instruct students to write a one-page opinion paper about the items that they wish to purchase (cash, check, charge), and purchase as though the student were that individual. write their answers on the board. Ask them what options are a. Thomas Jefferson available when they do not have enough money to make a b. James Monroe purchase (loans from parents, banks, etc.), and record these c. Robert R. Livingston answers on the board. Finally, ask them how they think d. Napoleon corporations and nations pay for items; record these answers e. Barbe-Marbois as well. f. Albert Gallatin g. President of Baring and Company 2. Divide students into three small groups. Provide the first group h. President of Hope and Company with a copy of the Louisiana Treaty, the second group with i. King of England a copy of Convention #1, and the third group with a copy j. King and Queen of Spain of Convention #2. (These are available online at www.yale. Invite a stockbroker or financial adviser to visit your class edu/lawweb/avalon/diplomacy/france/fr1803m.htm). Instruct and talk with students about stocks, bonds, and investment student groups to read their assigned document and discuss opportunities available today. its meaning. Ask a representative from each group to explain how the purchase of Louisiana was to take place based on Resources the information contained in their document. Ask students Blumberg, Rhoda. What’s the Deal? Jefferson, Napoleon, and the whether any of the methods they described in Activity #1 Louisiana Purchase. Washington, D.C.: National Geographic, were used. Washington, 1998.

3. Provide students with copies of the two featured documents. Internet Resources Beginning with the following questions, lead a class discussion To locate additional primary sources related to the Louisiana about the documents and how the United States actually Purchase, go to the Archival Research Catalog (ARC) located purchased the Louisiana territory: at www.archives.gov/research_room/arc/index.html. • What types of document are these? Do keyword searches using the following identifiers: 306668, • What are the dates of the documents? 306698, 300354, 300353, 300352, 306702, 306461, 306460, and • Who created the documents? 306458. • Who received the documents? To view a digital version of the Louisiana Purchase • What was the purpose of the documents? Treaty, go to the National Archives Exhibit Hall at www.archives. • What questions do the documents raise? gov/exhibit_hall/american_originals/loupurch.html. To view transcriptions of the primary documents involved 4. Provide students with information on the relationship that in the Louisiana Purchase, go to Yale’s Avalon Project at www. the United States had with Great Britain, France, and Spain yale.edu/lawweb/avalon/diplomacy/france/fr1803m.htm. from 1794 to 1803. Based on the information provided, ask To read more about the Louisiana Purchase, go to the State students to select one of the following scenarios and write a of Louisiana website, located at www.sec.state.la.us/purchase/ one-page paper predicting what could have happened if: purchase-index.htm. a. France had retained the Louisiana territory; To learn more about the history of the Department of the b. Britain had won the Louisiana territory in the Napoleonic Treasury, go to the department’s website at www.ustreas.gov/ Wars; education/history/index.html. c. Spain had reclaimed the Louisiana territory; and d. European banking institutions had not been willing to Lee Ann Potter is the head of Education and Volunteer Programs finance the purchase. at the National Archives and Records Administration, Washington, D.C. Potter serves as the editor for “Teaching With Documents,” Invite student volunteers to share their scenarios. a regular department of Social Education. Karen Needles was a National Archives education specialist, and Marisa Wilairat was an intern at the National Archives during the summer of 2002. You may reproduce the documents shown here in any quantity.

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