WEBVTT 00:00:00.000 --> 00:00:02.180 Welcome to today's Dick Dive. I'm your host. 00:00:02.700 --> 00:00:05.280 And today we are digging into a stack of Wikipedia 00:00:05.280 --> 00:00:07.679 notes on one of the most famous real estate deals 00:00:07.679 --> 00:00:10.119 in human history. Hello, everyone. Glad to be 00:00:10.119 --> 00:00:13.080 here. So we're talking about the 1803 Louisiana 00:00:13.080 --> 00:00:15.019 Purchase. And if you're listening, you probably 00:00:15.019 --> 00:00:17.640 have this like mental image from grade school. 00:00:17.760 --> 00:00:20.660 Oh, absolutely. The whole Thomas Jefferson signs 00:00:20.660 --> 00:00:23.160 a neat little piece of paper, hands over a giant 00:00:23.160 --> 00:00:26.140 check and boom, the U .S. magically doubles in 00:00:26.140 --> 00:00:29.239 size. Exactly. But. The numbers we are looking 00:00:29.239 --> 00:00:32.700 at in these sources are just staggering. We are 00:00:32.700 --> 00:00:36.619 talking about 828 ,000 square miles of land, 00:00:36.820 --> 00:00:39.600 which is massive. Right. It's over 26 % of the 00:00:39.600 --> 00:00:42.560 present day contiguous United States. And they 00:00:42.560 --> 00:00:45.219 got it all from France for 15 million dollars. 00:00:45.240 --> 00:00:47.219 Yeah. Which averages out to what about three 00:00:47.219 --> 00:00:50.140 cents an acre? Yep. Three cents an acre or roughly 00:00:50.140 --> 00:00:54.000 380 million dollars in 2024 money. So our mission 00:00:54.000 --> 00:00:56.560 for this deep dive is to completely deconstruct 00:00:56.560 --> 00:00:59.140 the myth that this was just some simple clean 00:00:59.140 --> 00:01:01.420 land transaction. Because it really wasn't. When 00:01:01.420 --> 00:01:03.609 you actually bypass the standard textbook summary, 00:01:03.990 --> 00:01:06.090 that whole clean transaction narrative completely 00:01:06.090 --> 00:01:08.930 falls apart. Totally. Today we're going to uncover 00:01:08.930 --> 00:01:12.390 a story that is driven by global geopolitical 00:01:12.390 --> 00:01:15.750 chaos, some really shady financial maneuvers, 00:01:16.150 --> 00:01:19.530 and honestly the stark reality of what the U 00:01:19.530 --> 00:01:21.730 .S. actually bought. OK, let's unpack this because 00:01:21.730 --> 00:01:23.909 we need to jump straight into the global chessboard 00:01:23.909 --> 00:01:27.629 here. The catalyst wasn't some grand American 00:01:27.629 --> 00:01:31.290 vision for a continental empire. No, not at all. 00:01:31.349 --> 00:01:35.049 It was sheer unadulterated panic over shipping 00:01:35.049 --> 00:01:37.469 logistics. Right. The precarious situation of 00:01:37.469 --> 00:01:40.870 the young United States in the late 1700s. They 00:01:40.870 --> 00:01:43.069 desperately needed free transit down the Mississippi 00:01:43.069 --> 00:01:45.230 River. Because if you're a farmer in the western 00:01:45.230 --> 00:01:47.849 territories, you have to ship agricultural goods 00:01:47.849 --> 00:01:50.670 down to the port of New Orleans. Exactly. And 00:01:50.670 --> 00:01:53.650 the U .S. actually had a treaty with Spain, who 00:01:53.650 --> 00:01:55.750 controlled the territory at the time, that gave 00:01:55.750 --> 00:01:57.890 American merchants the right of deposit in New 00:01:57.890 --> 00:02:01.730 Orleans. But then, in 1798, Spain just suddenly 00:02:01.730 --> 00:02:03.810 revokes that right. Which is a total nightmare 00:02:03.810 --> 00:02:06.230 for the Americans. Total panic ensues. American 00:02:06.230 --> 00:02:08.370 goods would literally just rot on the docks without 00:02:08.370 --> 00:02:11.069 that port. And the panic only gets worse in 1800, 00:02:11.430 --> 00:02:13.990 right? Because there's a secret treaty. Yes. 00:02:14.330 --> 00:02:18.129 The Third Treaty of San Ildefonso. Spain secretly 00:02:18.129 --> 00:02:21.289 transfers the entire Louisiana territory back 00:02:21.289 --> 00:02:23.889 to Napoleon's France. So Jefferson is looking 00:02:23.889 --> 00:02:26.750 at this and he's terrified. He sends James Monroe 00:02:26.750 --> 00:02:30.349 and Robert Livingston to Paris with up to 10 00:02:30.349 --> 00:02:32.590 million dollars, right? Yep, 10 million. And 00:02:32.590 --> 00:02:35.689 their only job, just their singular mission, 00:02:36.289 --> 00:02:38.969 is to buy the city of New Orleans, just the city. 00:02:39.050 --> 00:02:41.810 Just secure the port, that's it. But then Napoleon 00:02:41.810 --> 00:02:43.990 suddenly offers them a piece of land the size 00:02:43.990 --> 00:02:46.310 of Western Europe. I mean, it's like going to 00:02:46.310 --> 00:02:48.789 the store for a gallon of milk and the manager 00:02:48.789 --> 00:02:50.990 offers to sell you the entire supermarket for 00:02:50.990 --> 00:02:53.289 an extra five bucks. That is a great way to put 00:02:53.289 --> 00:02:55.629 it. So why? Like, why did Napoleon just give 00:02:55.629 --> 00:02:57.770 up on North America? Well, what's fascinating 00:02:57.770 --> 00:02:59.990 here is that the answer has almost nothing to 00:02:59.990 --> 00:03:02.289 do with Thomas Jefferson or the United States. 00:03:02.409 --> 00:03:05.110 Wait, really? Yeah. The fate of the Louisiana 00:03:05.110 --> 00:03:08.229 territory was actually decided thousands of miles 00:03:08.229 --> 00:03:11.419 away down to the Caribbean. by the Haitian Revolution. 00:03:11.919 --> 00:03:14.680 Oh, wow. OK. See, Napoleon originally wanted 00:03:14.680 --> 00:03:17.560 this massive, highly lucrative North American 00:03:17.560 --> 00:03:20.180 empire. He wanted to use the colony of Saint 00:03:20.180 --> 00:03:24.000 -Domingue, which is present day Haiti as this 00:03:24.000 --> 00:03:26.620 economic engine producing immense sugar wealth. 00:03:26.960 --> 00:03:29.560 Fueled by enslaved labor, of course. Exactly. 00:03:29.819 --> 00:03:32.439 And Louisiana. Louisiana was just supposed to 00:03:32.439 --> 00:03:35.080 be the agricultural breadbasket to feed that 00:03:35.080 --> 00:03:37.780 Caribbean colony. But the enslaved population 00:03:37.780 --> 00:03:40.300 of Saint -Domingue had already launched a massive 00:03:40.300 --> 00:03:43.460 rebellion, right? The one initially led by Choussaint 00:03:43.460 --> 00:03:45.400 Louverture. Correct. And Napoleon was absolutely 00:03:45.400 --> 00:03:47.960 determined to crush it. So he sends a massive 00:03:47.960 --> 00:03:50.860 military force commanded by his brother -in -law, 00:03:51.139 --> 00:03:53.419 General Charles Leclerc. To restore slavery. 00:03:53.560 --> 00:03:56.800 Yes. But it was a catastrophic failure. The French 00:03:56.800 --> 00:03:59.599 military met fierce resistance. And on top of 00:03:59.599 --> 00:04:01.900 that, a devastating outbreak of yellow fever 00:04:01.900 --> 00:04:03.960 sweeps through the French camps. I read that 00:04:03.960 --> 00:04:06.400 it absolutely decimated their ranks. It did. 00:04:06.759 --> 00:04:08.780 Over two thirds of Napoleon's troops died in 00:04:08.780 --> 00:04:10.659 the Caribbean. So Napoleon's sitting there in 00:04:10.659 --> 00:04:13.080 Europe looking at the board. His Caribbean sugar 00:04:13.080 --> 00:04:16.360 engine is gone. His military is crushed. And 00:04:16.360 --> 00:04:18.899 without Santa Ming, Louisiana is just, well, 00:04:18.899 --> 00:04:21.600 it's useless to him. Exactly. It went from a 00:04:21.600 --> 00:04:24.360 strategic asset to an indefensible liability 00:04:24.360 --> 00:04:27.779 almost overnight. Plus, war with Britain was 00:04:27.779 --> 00:04:30.579 imminent. Right. The piece of Amiens was collapsing. 00:04:30.860 --> 00:04:33.620 And Napoleon knows the British Navy is far superior. 00:04:33.920 --> 00:04:36.019 They could just sail into the Gulf of Mexico 00:04:36.019 --> 00:04:38.240 and seize New Orleans whenever they wanted. France 00:04:38.240 --> 00:04:40.319 couldn't defend it. And he desperately needs 00:04:40.319 --> 00:04:43.459 cash for his European war. Exactly. So he just 00:04:43.459 --> 00:04:45.829 decides to liquidate the whole thing. Which brings 00:04:45.829 --> 00:04:49.730 us to April 11, 1803. Monroe and Livingston are 00:04:49.730 --> 00:04:51.990 sitting there in Paris, hoping to get one city, 00:04:52.149 --> 00:04:55.069 and suddenly the whole territory is on the table. 00:04:55.250 --> 00:04:57.490 They scored the deal of a lifetime. They signed 00:04:57.490 --> 00:05:00.670 the treaty on April 30th, but they have a major 00:05:00.670 --> 00:05:03.110 problem. A huge problem. Right. Signing a piece 00:05:03.110 --> 00:05:05.889 of paper is the easy part. But the fledgling 00:05:05.889 --> 00:05:08.449 U .S. government doesn't actually have $15 million 00:05:08.449 --> 00:05:11.589 in cash lying around. Not even close. So how 00:05:11.589 --> 00:05:14.160 do they pay for it? Well... They have to scrabble 00:05:14.160 --> 00:05:17.480 to finance it. They assumed about $3 .75 million 00:05:17.480 --> 00:05:20.500 of French debts that were already owed to U .S. 00:05:20.560 --> 00:05:24.240 citizens. OK. Which leaves $11 .25 million to 00:05:24.240 --> 00:05:27.300 be financed through 6 % government bonds. But 00:05:27.300 --> 00:05:30.420 here's where it gets really interesting. To actually 00:05:30.420 --> 00:05:33.800 facilitate this deal, the U .S. used European 00:05:33.800 --> 00:05:36.959 banks. Specifically, British and Dutch banks, 00:05:37.600 --> 00:05:40.360 Francis Bering & Company in London, and Hope 00:05:40.360 --> 00:05:42.920 & Co. in Amsterdam. Yes, sovereign financing 00:05:42.920 --> 00:05:46.100 at its finest. But think about the irony here. 00:05:46.759 --> 00:05:50.939 British banks bought U .S. bonds to give millions 00:05:50.939 --> 00:05:55.430 in cold hard cash to Napoleon. The exact guy 00:05:55.430 --> 00:05:58.509 who is literally massing fleets on the coast 00:05:58.509 --> 00:06:01.170 to invade Great Britain. It sounds absurd to 00:06:01.170 --> 00:06:03.410 us today. It sounds like treason. I mean, how 00:06:03.410 --> 00:06:05.689 did the British government allow a British bank 00:06:05.689 --> 00:06:07.670 to fund their worst enemy? Well, the British 00:06:07.670 --> 00:06:09.129 government actually allowed it because they were 00:06:09.129 --> 00:06:10.829 looking at the big picture. Okay, explain that. 00:06:10.959 --> 00:06:13.819 It was ruthless pragmatism. The British decided 00:06:13.819 --> 00:06:16.220 it was vastly preferable for the neutral Americans 00:06:16.220 --> 00:06:18.519 to hold the territory rather than their hostile 00:06:18.519 --> 00:06:20.639 French enemies. Because if France kept it, they'd 00:06:20.639 --> 00:06:22.839 have a permanent foothold in North America. Exactly. 00:06:23.120 --> 00:06:25.639 So handing Napoleon some temporary cash was seen 00:06:25.639 --> 00:06:28.959 as the lesser of two evils. Wow. And the U .S. 00:06:28.959 --> 00:06:31.480 is just left holding these bonds right and paying 00:06:31.480 --> 00:06:34.240 interest. I saw in the notes that the final cost 00:06:34.240 --> 00:06:38.279 to the U .S. with interest by 1823 ended up being 00:06:38.279 --> 00:06:43.220 over $23 .3 million. Yes. Still a bargain, but 00:06:43.220 --> 00:06:46.620 definitely not the clean 15 million cash handoff 00:06:46.620 --> 00:06:49.600 people picture. But securing the funding overseas 00:06:49.600 --> 00:06:52.399 was only half the battle. Oh, yeah. Bringing 00:06:52.399 --> 00:06:55.319 the treaty home to Washington sparked an ideological 00:06:55.319 --> 00:06:58.360 civil war. It really did. Because President Thomas 00:06:58.360 --> 00:07:00.980 Jefferson was a strict constructionist. I mean, 00:07:01.139 --> 00:07:03.240 his whole political brand was about a small, 00:07:03.519 --> 00:07:05.740 strictly limited federal government. Exactly. 00:07:05.879 --> 00:07:08.500 He knew the Constitution didn't explicitly grant 00:07:08.500 --> 00:07:11.079 the president the power to just buy foreign land. 00:07:11.139 --> 00:07:13.220 So how does he justify buying half a continent? 00:07:13.420 --> 00:07:15.139 Well, Jefferson was actually really tortured 00:07:15.139 --> 00:07:17.279 by this. He knew it wasn't strictly legal. He 00:07:17.279 --> 00:07:19.560 rationalized it using a guardian analogy. Right, 00:07:19.579 --> 00:07:21.319 like he's doing something illegal but necessary 00:07:21.319 --> 00:07:23.319 for the good of his ward in the country. But, 00:07:23.339 --> 00:07:25.279 I mean, wasn't that just intellectual gymnastics? 00:07:25.540 --> 00:07:28.319 Pretty much. Because Alexander Hamilton and the 00:07:28.319 --> 00:07:32.199 Federalists were absolutely furious. They opposed 00:07:32.199 --> 00:07:34.579 the purchase, saying it was too expensive and 00:07:34.579 --> 00:07:37.060 completely unconstitutional. But if we connect 00:07:37.060 --> 00:07:40.199 this to the bigger picture, their true motives... 00:07:40.269 --> 00:07:42.689 were deeply political, not just constitutional. 00:07:43.170 --> 00:07:46.430 The Federalists were mostly the mercantile elite 00:07:46.430 --> 00:07:49.550 based in New England. OK. And they were terrified, 00:07:49.790 --> 00:07:52.290 just absolutely terrified, that adding all these 00:07:52.290 --> 00:07:54.569 new Western states would completely dilute their 00:07:54.569 --> 00:07:56.990 political power. Ah, because the new states would 00:07:56.990 --> 00:07:58.870 be filled with agrarian farmers who would vote 00:07:58.870 --> 00:08:01.290 for Jefferson's party. Exactly. They'd lose their 00:08:01.290 --> 00:08:03.209 banking influence and their grip on Congress. 00:08:03.470 --> 00:08:07.189 The raw panic was so intense that some New Englanders, 00:08:07.509 --> 00:08:10.470 like Senator Timothy Pickering, actually explored 00:08:10.470 --> 00:08:13.009 forming a separate Northern Confederacy. Wait, 00:08:13.050 --> 00:08:16.170 really? They wanted to secede? Yes, over a real 00:08:16.170 --> 00:08:18.769 estate deal. That is wild. And obviously we have 00:08:18.769 --> 00:08:21.230 to talk about the other major source of domestic 00:08:21.230 --> 00:08:24.149 backlash, the debate over slavery. Right? It 00:08:24.149 --> 00:08:26.829 was fierce. Southern planters wanted to extend 00:08:26.829 --> 00:08:28.930 slavery into the new Western territories. But 00:08:28.930 --> 00:08:31.930 at the same time, weren't those same southern 00:08:31.930 --> 00:08:34.909 planters incredibly anxious about it? Very much 00:08:34.909 --> 00:08:37.009 so. Because remember, they had just watched the 00:08:37.009 --> 00:08:39.690 Haitian Revolution unfold. They were terrified 00:08:39.690 --> 00:08:42.230 that bringing existing enslaved populations into 00:08:42.230 --> 00:08:45.149 the U .S. from Louisiana might spark Haitian 00:08:45.149 --> 00:08:47.669 -style revolts on American soil. So it's this 00:08:47.669 --> 00:08:51.960 incredibly volatile mix of greed and fear. which 00:08:51.960 --> 00:08:54.720 honestly just foreshadows the Missouri Compromise 00:08:54.720 --> 00:08:58.179 and the American Civil War. Absolutely. The Louisiana 00:08:58.179 --> 00:09:00.860 Purchase basically set the stage for the rest 00:09:00.860 --> 00:09:03.840 of the 19th century. So what does this all mean? 00:09:03.960 --> 00:09:05.799 I mean, they bought it. They got British banks 00:09:05.799 --> 00:09:08.980 to fund it. Jefferson legally justified it. But 00:09:08.980 --> 00:09:11.460 what exactly did they buy? That is the million 00:09:11.460 --> 00:09:13.399 dollar question. Because the borders were completely 00:09:13.399 --> 00:09:16.200 undefined. Completely phantom borders. The treaty 00:09:16.200 --> 00:09:19.159 language was incredibly vague. The U .S. claimed 00:09:19.159 --> 00:09:21.080 everything up to the Rocky Mountains and down 00:09:21.080 --> 00:09:24.200 to the Rio Grande. But Spain argued no. The U 00:09:24.200 --> 00:09:26.320 .S. only bought the Western Bank of the Mississippi. 00:09:26.659 --> 00:09:29.039 Right. This ambiguity triggered an immediate 00:09:29.039 --> 00:09:31.980 scramble. The U .S. had to send out mapping missions 00:09:31.980 --> 00:09:34.179 just to figure out what they supposedly owned. 00:09:34.559 --> 00:09:36.759 Like the Lewis and Clark expedition. Exactly. 00:09:36.909 --> 00:09:39.850 and the Red River Expedition and Pike's Expedition. 00:09:40.289 --> 00:09:42.409 They were out there actively trying to assert 00:09:42.409 --> 00:09:44.909 claims. The borders weren't actually settled 00:09:44.909 --> 00:09:48.710 until the Adams -Onus Treaty of 1819. Wow, 16 00:09:48.710 --> 00:09:50.970 years later. You know, there's an analogy in 00:09:50.970 --> 00:09:53.129 our sources that I think really drives this home 00:09:53.129 --> 00:09:55.529 for you listening. We say the U .S. bought the 00:09:55.529 --> 00:09:58.769 land, but France actually controlled only a tiny 00:09:58.769 --> 00:10:02.509 fraction of those 828 ,000 square miles. Mostly 00:10:02.509 --> 00:10:05.700 just New Orleans. Right. So... It's more like 00:10:05.700 --> 00:10:08.340 they bought an exclusive hunting license. They 00:10:08.340 --> 00:10:10.639 didn't really purchase the land itself. They 00:10:10.639 --> 00:10:13.360 purchased the preemptive right to obtain the 00:10:13.360 --> 00:10:16.120 land from Native Americans. By treaty or by conquest. 00:10:16.460 --> 00:10:18.519 Right, effectively blocking out other European 00:10:18.519 --> 00:10:21.059 powers. That is a crucial point. There's a really 00:10:21.059 --> 00:10:23.740 powerful quote from Felix S. Cohen, who was a 00:10:23.740 --> 00:10:26.179 lawyer for the Interior Department. He noted 00:10:26.179 --> 00:10:28.299 that practically all this real estate was purchased 00:10:28.299 --> 00:10:31.340 from its original Indian owners, not from Napoleon. 00:10:31.610 --> 00:10:33.389 Because the Native Americans actually lived there 00:10:33.389 --> 00:10:35.669 and controlled it. Exactly. And the true cost 00:10:35.669 --> 00:10:39.710 of that land reflects that reality. By 2012, 00:10:40.090 --> 00:10:42.850 the total cost to the U .S. government for subsequent 00:10:42.850 --> 00:10:44.889 treaties and financial settlements with Native 00:10:44.889 --> 00:10:48.269 American tribes for this specific land was estimated 00:10:48.269 --> 00:10:53.250 at $2 .6 billion. $2 .6 billion. Yes. Which is 00:10:53.250 --> 00:10:56.370 about $11 .4 billion in 2024 dollars. So that 00:10:56.370 --> 00:10:58.889 original $15 million. paid to France. It was 00:10:58.889 --> 00:11:01.250 only about 3 .5 percent of the total cost of 00:11:01.250 --> 00:11:05.240 land. That is just incredible. Summarizing this 00:11:05.240 --> 00:11:07.419 incredible journey for everyone listening, it 00:11:07.419 --> 00:11:09.720 starts with a revoked shipping treaty in New 00:11:09.720 --> 00:11:13.019 Orleans. And it spirals into this global banking 00:11:13.019 --> 00:11:15.220 maneuver that doubles the size of the country, 00:11:15.679 --> 00:11:18.600 sparks a massive constitutional crisis, and basically 00:11:18.600 --> 00:11:20.940 sets the stage for centuries of conflict and 00:11:20.940 --> 00:11:22.899 westward expansion. It's messy. It is deeply 00:11:22.899 --> 00:11:25.200 messy. History is rarely a clean transaction. 00:11:25.559 --> 00:11:27.759 It's interconnected. And honestly, it's often 00:11:27.759 --> 00:11:29.659 built on the suffering of others. Which brings 00:11:29.659 --> 00:11:32.019 up a final thought from our sources. This raises 00:11:32.019 --> 00:11:33.620 an important question, something you listening 00:11:33.620 --> 00:11:35.879 should really mull over. There's a really dark 00:11:35.879 --> 00:11:38.860 irony here. Thomas Jefferson used the Louisiana 00:11:38.860 --> 00:11:42.279 Purchase to vastly expand what he called the 00:11:42.279 --> 00:11:46.100 American Empire of Liberty. Right. But in 1804, 00:11:46.440 --> 00:11:49.299 he and Congress were so terrified of slave revolts 00:11:49.299 --> 00:11:52.139 at home that they flat out refused to recognize 00:11:52.139 --> 00:11:54.519 the newly independent Republic of Haiti. The 00:11:54.519 --> 00:11:57.220 very nation whose bloody revolution literally 00:11:57.220 --> 00:12:00.200 made the Louisiana Purchase possible. Exactly. 00:12:00.379 --> 00:12:03.019 Instead of recognizing them, the U .S. slapped 00:12:03.019 --> 00:12:05.779 Haiti with a devastating trade embargo. Wow. 00:12:06.139 --> 00:12:08.139 So the birth of America's continental empire 00:12:08.139 --> 00:12:10.799 was fundamentally tied to the economic strangulation 00:12:10.799 --> 00:12:13.320 of the hemisphere's second free republic. That 00:12:13.320 --> 00:12:16.200 is, man, that is a heavy thought to end on. But 00:12:16.200 --> 00:12:18.320 it completely changes how you view the map of 00:12:18.320 --> 00:12:20.220 the United States. Thanks for joining us for 00:12:20.220 --> 00:12:21.740 this deep dive. We'll catch you next time.