Louisiana Purchase - Financing

Financing

The American government used $3 million in gold as a down payment, and issued bonds for the balance to pay France for the purchase. Earlier that year, Francis Baring and Company of London had become the U.S. government's official banking agent in London. Because of this favored position, the US asked the Baring firm to handle the transaction. Francis Baring's son Alexander was in Paris at the time and helped in the negotiations. Another Baring advantage was a close relationship with Hope and Company of Amsterdam. The two banking houses worked together to facilitate and underwrite the Purchase. Because Napoleon wanted to receive his money as quickly as possible, the two firms received the American bonds and paid cash to France.

(The original sales document of the Louisiana Purchase was exhibited in the entrance hall of the Barings London offices until the bank's collapse in 1995. It is now held by ING Group, which purchased Barings. The original handwritten proclamation signed by President Thomas Jefferson and Secretary of State James Madison, that informed the American public of the landmark deal of the Louisiana Purchase, was acquired in 1996 by Walter Scott Jr. of Omaha, Nebraska, who holds it in his private collection.)