From Albert Gallatin
New York 31st Aug. 1803
Your favour of the 23d and its enclosures were received day before yesterday. A bill shall be prepared for the purpose of carrying the treaty &a. into effect: but neither can you expect that the house will take up the subject before ratification or decide without much debate & opposition; nor is it possible to have the certificates of stock prepared until Baring shall arrive & the form mutually agreed on. I write to Philada. in order to have the proper paper, copper plate engraving & other devices necessary to prevent counterfeits immediately prepared; but the printing cannot be executed until the form shall have been prepared: this must express the nature of the stock, the law by virtue of which issued, and what cannot be done without Baring’s consent, the mode of transferring the stock,1 the place where the interest is payable, the mode of paying it, & the rate of exchange; all which is left indeterminate in the convention, the rate of exchange with Paris only excepted. The moment he or his agent shall arrive, we will agree on a form & have the printing part executed & the blanks filled; but we cannot proceed to signing till after the law shall have passed. For the sake of making the stock negotiable, it must be in certificates of a moderate sum, not certainly more than one thousand dollars each on an average. This will produce 11,250 Certificates to be signed by one person & that person (the register) an officer who has other papers daily to compare & attest. The Certificates must afterwards & before they issue be compared, checked &a: it will be extraordinary dispatch if they can be prepared for delivery within 20 days after the passing of the law. You may, however, rely on my exertions & that every means which may accelerate the completion of the stock shall be adopted.
But, whilst it is proper to be ready to act on the ground you have suggested, there is a strong objection to our sending the stock; it is not merely because the Executive will thereby assume a responsibility not contemplated by the convention, the delivery of the stock being, by that instrument, made an act subsequent to the possession of Louisiana; but because we ought to insist that the delivery of the stock here within the three months to the person duly authorized is a good fulfilment of the convention. there is no doubt of its being such both by the letter & the spirit of the instrument; and if we assent to a contrary construction, we become responsible for the delivery in Europe within the three months, render ourselves liable for the accidents of transmission & for those very delays which, if France seeks for a pretence of breaking the contract, may be used by her for that purpose. The condition that the stock shall be transmitted by us to our Minister at Paris is not a part of our agreement, but of the contract between the French Government & Baring to which we are not parties, & was inserted in this for the benefit & security of that Government who did not wish to trust the Baring & Hopes with the whole of the stock at once. We must, as I mentioned before, make every previous preparation in order to be able to adopt in October that mode which, upon due consideration, will appear the safest; but the transmission by us & at our risk does not, in my present view of the subject, appear an eligible measure.
I feel not, however, any apprehension that France intends seriously to raise objections to the execution of the treaty: unless intoxicated by the hope of laying England prostrate, or allured by some offer from Spain to give a better price for Louisiana than we have done, it is impossible that Bonaparte should not consider his bargain as so much obtained for nothing; for, however valuable to us, it must be evident to him that, pending the war, he could not occupy Louisiana, & that the war would place it very soon in other hands. A temporary uneasiness may indeed have existed from various causes: the communication of the substance of the treaty to England & the manner in which it was received may have frustrated the hopes of the first Consul of a misunderstanding or coolness between us & that country; he may have been disappointed on finding that instead of sixty, he would receive only forty five millions for Louisiana; for although I have no doubt of the negotiation with Baring having been part of our own, I am confident that Mr Monroe was not privy to it, & it is very probable that that part of the transaction was not unfolded to Bonaparte till after the signature of the treaty: and it is not impossible that the French Government wants only to guard against the danger of our taking possession immediately after the exchange of ratifications, & of Congress afterwards refusing to comply with our part of the agreement.
I think it, however, more probable that the uneasiness which the letters of our ministers are calculated to create have their origin with Baring or Livingston, or perhaps with both. The anxiety of the first that a convention by which he & his associates will gain near three millions of dollars should not fail in its execution, and the wish of the other that no modifications should be made by Congress in the mode of settling & paying the american claims, as well as a natural desire to persuade us that he has made a most excellent bargain, would lead both to represent every trifling occurrence as a proof that, if we did not hasten the completion of every part of the transaction, we might lose the object.
What persuades me of the desire of France that the treaty should be carried into effect is what they have already done towards it. The treaty is signed as of the 30th April; the powers of Sir Francis Baring are dated London 3d May; the official proposition of Alexr. Baring to the French Government is dated Paris 2d May. These propositions were communicated to our Ministers by Mr Marbois on the 4th of May. On the 10th of the same month Mr Marbois wrote to them the letter in which he states that any extraordinary delay in making the payments stipulated beyond the three months fixed by the Convention would place the contracting parties in the same situation in which they were before treating—Observe here that by Baring’s proposition & contract the dates of the payments he is to make to France are determined by that of the delivery & transmission of the stock; the first payment by him at Paris being within thirty days after advice being received there of the delivery of one third part of the stock to his agent in America, & of the transmission of the remainder to our Minister at Paris—On the 22d May Bonaparte ratified the Convention—On the 28th do. our Ministers answered Mr Marbois’s letter of the 4th stating that they saw no objection to the contract—On the 2d June they answered his letter of the 10th May—On what day Bonaparte ratified the contract with Baring does not appear. The attestation of Taillerand & that of our ministers that the signature of Maret (the Secy. of State), which as well as that of Marbois & of Bonaparte, is affixed to the instrument, is his own & that the act must be considered as that of the French Governt. bears date the 6th June. The letter of our ministers, to which Mr Livingston adds that it has been agreed to withdraw the letters of 10th May & 2d June is dated 7th June. A comparison of those dates shows that the ratification of the convention & that of the contract were deliberate acts, both done several days after writing that letter of the 10th May which had given the alarm, & followed by the act of withdrawing that very letter. The period which elapsed between the two letters of Marbois of 4th & 10th May & their being answered, is indeed an evidence of a state of some uncertainty arising most probably from the negotiation with Baring not being liked by the Consul; but it is extraordinary that the letters written during that interval by Mr Monroe on the 18th & 23d May show no anxiety on the subject; nay that silence was kept respecting that point by the Ministers in their letter of the 13th which accompanied the treaty; & that Mr Monroe evinces no uneasiness till his short letter of the 2d June. Was he not kept in the dark all the time that any real ground of uneasiness might exist, and informed of it, & his anxiety as well as ours excited, only when there was no longer any2 reason of alarm?
I write to you as if you had Baring’s contract, because the Ministers say it is enclosed in their letter. I have received it from Baring himself accompanied by a letter of the 7th June, brought by Mr Jay, but which went round to Washington, in which he says that he will sail within a month for the United States for the purpose of agreeing on the preliminary arrangements. I am transcribing the contract & some letters relative to it, & will transmit it to you officially, as I think it my duty to leave on record in the office proofs3 that the low price at which that stock has been sold (78½ per cent) is not ascribable to the state of public credit nor to any act of your administration & particularly of the Treasury department.
I agree with you that we have a right to claim that part of West Florida which was part of Louisiana: I was of a different opinion; but am now convinced.
With great respect and sincere attachment Your obed. Servt.
P.S. On reading again Mr Livingston’s postcriptum, I see that by the instructions to Mr Pichon, the French Govt. agrees that provided that the Stock shall be created within the three months it will be a fair execution of the Treaty. By that instrument it was agreed that the delivery of New Orleans should immediately follow the exchange of ratifications, without any provision being made for the concurrence of Congress which is necessary for the creation of the stock. There can be no objection to agreeing on our part with Mr Pichon that he shall not deliver the order for taking possession of New Orleans, until Congress shall, by law, have created the Stock; but it seems to me that we ought to insist on not delivering the Stock until the place is in our possession. With expresses & provided that every previous step has been taken to take possession on a day’s warning, this will not cause a delay of more than six weeks.
For fear that Baring’s contract has not reached you I add its substance.
1. The French Govt. to deliver to the agent of the houses of Hope & Baring an act authorizing the American Govt. to transfer to the sd. houses or to their representatives the 11,250,000 Dollars american stock.
2. The American Govt. may deliver directement to the attorney of the sd. houses one third of the sd. stock amounting to 3,750,000 dollars, & shall send the remaining 7,500,000 dollars to their Minister at Paris to be kept by him as a deposit pursuant to the following conditions.
3. Hope & Baring shall pay to the Treasury of France in full for the said Stock, & reserving to themselves the interests & profits accruing from sd. stock, the sum of 52 millions of francs; vizt. six millions within the 30 days following the reception at Paris of an official notice that one third of the Stock has been delivered to the agent of sd. houses, & that the other4 two thirds have been sent to France; & two millions monthly during each succeeding month untill the payment of the 52 millions shall have been completed.
4. Bills of exchange to the amount of 52 millions of francs drawn by Baring on Hope, accepted by Hope & endorsed by Alexr. Baring, but leaving the dates of payment in blank shall without delay be deposited in the hands of the American minister at Paris, who shall, in concert with the French Minister of finance, fill the blanks in conformity to the preceding article.
5. On receipt of the official notice mentioned in 3d Article, the american minister at Paris shall deliver to the French Govt. seventeen millions, five hundred thousand livres of the said bills & shall keep as a deposit the remainder of said bills & the 7,500,000 dollars5 american stock sent to him by the American Govt.—Thirty days before the completion of the payment by Hope of the first bills thus delivered to the French Govt., the American Minister shall deliver to the French Govt. 17 millions more of Baring & Hope’s bills, and to the agent of Baring & Hope one half of the american stock in his hands vizt. 3,750,000 dollars. The remainder of the bills & stock shall be likewise delivered by him to the parties respectively one month before the completion of the payment of the second set of bills by Hope.
As during the same two years which is fixed for the completion of the payment of 52 millions to France by Hope & Baring, these houses will receive from the United States 7,200,000 francs6 for interest, they will have to pay in fact no more than 45 millions for the sixty millions stock; which after making the allowance for interest & discount amounts to 78½ per cent for the real price they give for that Stock. At that period our old worthless six per cent stock which is nothing more than a short annuity was in America at 97 & in England at 91; our three was in England at 58; our Dutch 5 % was at Amsterdam at 99 & our Antwerp 4½ % redeemable at will was at this last place at 99½—Add to this that the Barings were bidders for Mr Addington’s ten millions St. loan, which they did not get, but for which they offered to take the English three per cent at the then market price with a premium of only 3 per cent; and our threes were in England worth one per cent more at market than the English.
RC (DLC); above postscript: “The President of the United States”; endorsed by TJ as received from the Treasury Department on 7 Sep. and “creation of stock” and so recorded in SJL.
until baring shall arrive: Alexander Baring acted as agent with full powers of attorney for Francis Baring & Company of London and Hope & Company of Amsterdam in drawing up the contract to finance the purchase of Louisiana (J. E. Winston and R. W. Colomb, “How the Louisiana Purchase was Financed,” Louisiana Historical Quarterly, 12 , 218).
The convention set the rate of exchange with paris at 5.333 francs or 5.8 livres to the U.S. dollar (Miller, Treaties description begins Hunter Miller, ed., Treaties and Other International Acts of the United States of America, Washington, D.C., 1931-48, 8 vols. description ends , 2:514).
contract between the french government & baring: for a printed copy in English of the 12 Floréal (2 May) document signed by Alexander Baring and Barbé de Marbois, the French minister of finance, see Winston and Colomb, “How the Lousiana Purchase was Financed,” 215-18.
uneasiness which the letters of our ministers are calculated to create: see Robert R. Livingston to TJ, 2 June, and note. letters written during that interval: see Monroe to Madison, 18 and 23 May, in Madison, Papers, Sec. of State Ser., 5:12-13, 24-5. For Livingston and Monroe’s letter of 13 May that accompanied the treaty, see same, 4:601-6. Monroe’s short letter to Madison, in which he urged that it is “highly important” that Congress be called immediately into session to carry the “treaty & conventions” into effect without delay, was dated 3 June (same, 5:55).
Peter Augustus jay arrived in New York with the treaty and dispatches on 18 Aug. (same, 5:47n).
1. Preceding six words and comma interlined.
2. Preceding two words interlined in place of “further ground.”
3. Word interlined.
4. Preceding three words interlined.
5. Preceding figures and word interlined in place of “two thirds of the.”
6. Word inserted in margin in place of “dollars.”