The Forgotten Financiers of the Louisiana Purchase

“The Louisiana Purchase is mostly remembered for the political acumen of Thomas Jefferson and Napoleon’s pragmatism. This book shows that the grand bargain to double the size of the US depended on the financial engineering of two European merchant bankers. The bankers initiated a deal that avoided confrontation between the US and France and circumvented Britain’s opposition. Perhaps this is why Jefferson stated that banks “are more dangerous than standing armies.” – Rui Esteves, Professor, Geneva Graduate Institute “When Napoleon in 1803 offered to sell France’s territorial claims in North America, the young United States did not have the money to buy. But it had something equally important: credit in the world of international finance. Neal’s splendid contribution to financial history reveals how two enterprising European bankers used U.S. creditworthiness to structure the deal and arrange the financing that allowed the United States to double its territory and become a rising global power.” – Richard Sylla, New York University “A complete reversal of what we thought we knew about the Louisiana purchase. As Professor Neal shows in this tour de maître, the financiers who masterminded the purchase did not ‘arrange it’. They were really the puppeteers of the whole act." – Marc Flandreau, Howard S. Marks Professor of Economic History at University of Pennsylvania This book provides a comprehensive account of how the Louisiana Purchase of 1803 was financed. Where existing research has focused predominantly on the political and diplomatic significance of the Purchase, this book focuses on the ‘forgotten financiers’ of the Purchase – individuals from the US, France and the UK including Alexander Baring, Albert Gallatin, Pierre Cesar Labouchere and François Barbè-Marbois. Larry Neal is Emeritus Professor of Economics at the University of Illinois at Urbana-Champaign, Research Associate of the National Bureau of Economic Research, and Fellow of the Cliometrics Society.