Why The Louisiana Purchase Was The Greatest Fourth Of July Sale Ever

The Fourth of July is not a shopping holiday, per se — not to say the U.S. will not spend a fair amount of money celebrating it. Not all Americans celebrate the Fourth of July by doing something special, but about 86 percent do, and will spend several billion dollars celebrating the nation’s 243rd birthday.

So, what will be we buying up?

According to the National Retail Federation (NRF), that would be food, mostly — Americans will spend about $6.7 billion on food to be consumed at BBQs nationwide. Alcohol will also have a banner day, with sales around $1 billion, the same approximate amount that Americans will spend on fireworks to launch from their backyards. Americans will also spend a fair amount on “incidental” patriotic items, according to the NRF, among which the American flag remains a perennial favorite.

Since we are already spending several billion dollars preparing for the Fourth of July, retailers nationwide want to make sure we don’t forget to throw a little spend their way. A quick Google search of the term “Fourth of July Sale” immediately brings up more than 48 million hits. A quick survey of the first page leads us to conclude that this weekend will be a good time to buy a new TV, skincare products, summer clothes or a new bathing suit — all at deep discounts. What exactly that says about Americans, we are not sure.

What we are sure of — to a near numerical certainty — is that, no matter how hard one searches this holiday weekend, no matter how thoroughly they comb the web or mall, and no matter what level of dedication a shopper brings, no one will be getting the best deal ever this Fourth of July. This is not an existential comment on the nature of shopping so much as it is a simple statement of fact.

No one can get the best possible deal on July 4 because that sale has already been made. Only it was July 4, 1803 — better known as the Independence Day that the Louisiana Purchase was announced.

A Brief History Of The Louisiana Purchase — And Its Associated Payments Problems 

Thomas Jefferson is famous for many things — his presidency, founding the University of Virginia, designing Monticello, inventing the swivel chair (which he didn’t actually do, but with which he is often credited) and writing the Declaration of Independence. He was a bit of a Renaissance Man — good news for him, as the possible downside of one’s list of accomplishments getting long enough is that some things start to get lost in the shuffle.

In Jefferson’s case, what has been lost in the shuffle is that he was the all-time winner of the best Fourth of July sale in the history of this nation. One might get a good value on a 4K TV this weekend, but it’s going to be almost impossible to beat picking up 13 new states and 812,000 square miles of new U.S. territory for $15 million.

That is a remarkable deal to be sure, but, in fairness, we should note that $15 million was much more money in 1803. Adjusted for inflation, the contemporary value of the Louisiana Purchase was around $340 million. However, considering that the contemporary land value for the 512 million acres that comprise the space is, by most estimates, $1.2 trillion, it is difficult to argue that Jefferson didn’t get an incredible deal.

That deal is made more incredible when one considers that the entire Louisiana Territory was not exactly what Jefferson hoped to buy. His original interest was in purchasing the City of New Orleans (and, more specifically, the valuable Port of New Orleans) to gain control of the mouth of the Mississippi.

France, then ruled by Napoleon Bonaparte, had somewhat different thoughts at the time. Though Napoleon initially wanted to build a North American colonial empire earlier in his rule, and had taken control of the Spanish holdings in North America in 1802 to that end, things had changed quite a bit by the following year. More than a decade of fighting a losing battle in Haiti against Toussaint Louverture, combined with renewed hostilities on the European continent with England, had persuaded Napoleon to abandon his colonial ambitions in North America, in favor of funding his war with England at home.

Jefferson sent Secretary of State James Monroe to Paris to negotiate the sale of New Orleans — for a price of no more than $10 million — in January of 1803. By the time Madison arrived in Paris in April of 1803, he was promptly informed by U.S. Ambassador to France Robert Livingston that the French were happy to make a deal. However, they didn’t just want to sell New Orleans; they wanted to sell the whole territory for $15 million.

Sometimes, slower payments work to one’s advantage.

Madison and Livingston, in what Jefferson later described as “seizing a fugitive occurrence,” agreed to the deal — despite the fact that it was $5 million more than they were given authorization to spend. We suspect that the term “seizing a fugitive occurrence” is how one said “it is better to ask forgiveness than permission” or “move fast and break things” in the year 1803.

The deal was officially announced to the American public on July 4, 1803. The treaty was ratified by October of the following year, after Jefferson and his cabinet decided they would not need a constitutional amendment to make this purchase. (Jefferson, earlier in his career, said that such purchases were the types of things the federal government should not be empowered to do. When it was his turn to make the deal, it seems he had rethought that issue). Three months later, the French flag came down over New Orleans, and the American flag went up.

If one is wondering why the changeover took three months from the treaty’s ratification (despite the fact that it was effective immediately), that’s because there was the issue of payment. The U.S. made a $3 million cash down payment on the land, and paid for the rest by issuing bonds (all of which were purchased by two European banks from Napoleon — one in England, one in the Netherlands).

Negotiating the settlement, and how exactly the payouts would happen, took some time — Napoleon wanted to use the funds to invade the U.K. (he never got around to it), and speed of having the full purchase price was a priority. However, even when the funds were agreed upon, physically moving those funds was a challenge. The U.S. had to ship $3 million in gold bars to France. Shipping in 1803 was dangerous — weather could easily sink the boat, and security threats were different than they are today.

In 2019, one’s biggest payment security concern is a hacker breaking into the digital stream of funds, and making off with some ill-gotten gains. In 1803, the biggest payment security concern (when it came to the Louisiana purchase) was the Barbary pirates intercepting them on the seas, stealing their gold and setting their ship on fire. As a result, that gold was shipped on many boats, with a great deal of secrecy.

That is something to keep in mind the next time someone complains about the miserable complexity of cross-border remittances, and the challenges of payment security. It could always be worse.

What A Louisiana Purchase Will Buy Today

It would be almost impossible to spend $15 million nearly as well as Thomas Jefferson did 216 years ago. As money goes, $15 million is just not what it used to be.

One could put it toward a prime single-family home — with $600,000 to spare. According to this Zillow listing, it is “the neighborhood’s crown jewel, boasting perfectly balanced proportions and a decidedly modern sensibility.” Alternatively, one could purchase this bargain basement $10 million home, which is not the crown jewel of its neighborhood, but does come with the option of scooping up a 40 foot by 60 foot lot on Hyde St. for a scant additional $3 million as part of the package. For those with more east coast sensibilities, one could own a 7,200-square-foot single-family townhouse with a Gramercy Park address in Manhattan.

While all these addresses are lovely, it is hard to say that a view of San Francisco Bay, or that the word “Gramercy” on one’s mailing address, is quite as good as roughly doubling the landmass of the United States. However, at least it wouldn’t require the movement of gold bars to consummate the deal.

Of course, the Louisiana Purchase is difficult to quantify in money alone. The United States would not exist in its modern form without it, and would be hard to put a dollar value on the worth of the modern nation.

So, today, while at that BBQ, take time to offer a second toast to Thomas Jefferson, who managed to make modern America possible — not once, but twice — on the Fourth of July. Then, toast him one more time, because he also scored the greatest holiday weekend discount in the history of the nation.

Happy Fourth of July.