I read an article this week dubbed “The Greatest Real Estate Deal in History”. Any clues to what that might be? Well, what was known as the Louisiana Territory (a whopping 828m square miles) was sold to America from its’ French owners in 1803 for a mere… $15m! That’s a few cents an acre! So why did they sell it so cheap?
Since around the 1780s, the Mississippi river and the port of New Orleans had become increasingly important to America in order to thrive as a country. Now at this time in France, Napoleon was in all his glory and naturally, the Americans were sceptical. France hadn’t paid any attention to their land here but Thomas Jefferson was quoted saying, “The day that France takes possession of New Orleans… we must marry ourselves to the British fleet and nation.” Yikes! They may want to lose weight before they try to fleet!
In January 1803, Jefferson sent James Monroe (the ex Minister to France) to Paris to negotiate for this huge vast piece of land. Monroe was sent with instructions to buy New Orleans and parts of Florida for no more than $10m. But when the negotiations started, Frances’ Foreign Minister stated they were willing to sell all of the territory for the bargain price of $15m.
So why sell land of that proportion so cheap? It would mean doubling the size of the United States. Well Napoleon’s army sent to Saint Domingue (what we now know as Haiti) had been struck with yellow fever. He was also expecting a new war with Britain in his quest to re-establish France in the New World.
He thought, if anyone tried to claim the Louisiana Territory, would he really want to defend it? Was it worth it? He deemed it not. So that’s why America got a cracking deal! Even then, $15m was too steep for America and they were forced to loan the money from two European banks.
The purchase of the Louisiana Territory was noted as one of President Jefferson’s greatest achievements. In 1812, 9 years after the Louisiana Purchase agreement was made, the US shaped their first state from the territory: Louisiana. This was the 18th state for the US and from there, America expanded westward into the new lands. The rest is history as they say.