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Past and Present

How To Close One Of The Biggest Real Estate Deals In History

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The United States Congress ratified the Louisiana Purchase Treaty on October 20th, 1803, officially transferring 826,000 square miles of land from French to American ownership for $15 million.

It’s considered one of the greatest real estate deals in history. But at the time, purchasing the land between the Mississippi River and the Rocky Mountains presented constitutional and political questions for the United States.

Constitutionally, President Jefferson’s political opponents, the Federalists, questioned whether he had the authority to purchase the land directly from France without consulting Congress, because the Constitution did not contain explicit directions for acquiring territory.

Politically, Federalists opposed the purchase because they favored a closer partnership with Great Britain rather than an alliance with France and a potential war with Spain. In addition, legislators from Atlantic seaboard states feared new Western citizens, whose economic and political priorities would differ from their own and potentially weaken their hold over Congress, while Northerners feared the addition of more slave-holding states, a shift that would disrupt the balance of power in the House of Representatives.

Even some of Jefferson’s supporters, who were adherents to a small federal government, questioned the long-term effects that a constitutionally unsanctioned land acquisition might have on their political careers.

Jefferson also recognized that he was in a constitutionally gray area. While the federal constitution made no reference to land acquisition, it did grant the president the power to negotiate treaties. As an agreement between nations, Jefferson and his Secretary of State, James Madison, assured Congress that the Louisiana Purchase was, in fact, a treaty.

After nearly a year of negotiations, the Senate authorized Jefferson to take possession of the territory and establish a temporary government. While the Louisiana Purchase highlighted pre-existing economic and political divides within the United States, it also established the power of the president to acquire land.