The fourth of July is, of course, most famous for being the day on which America lights up the skies with fireworks to celebrate the declaration of independence from Britain in 1776.
But for Americans and oddly, Britons too the date is important for another reason. That's because on 4 July 1803, President Thomas Jefferson announced the signing of the Louisiana Purchase Treaty with France.
At that time, the Mississippi river was vital to American trade. But controlling the waters was the French city of New Orleans. In 1802, Jefferson dispatched Robert R Livingston and future president James Monroe to Paris to negotiate its purchase. But what happened next took the Americans by surprise.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Instead of being offered New Orleans, Napoleon Bonaparte offered the visiting delegation all French territorial claims on the North American mainland a huge chunk of the continent that stretched from the Gulf of Mexico to Canada all for 50 million francs, plus the cancellation of debts worth 18 million francs.
The deal was struck and with the signing of the treaty, the United States doubled in size overnight. Three million dollars' worth of gold was immediately paid over, and the rest was borrowed.
But the anniversary of the Louisiana Purchase has special importance for Britain as well. The US government chose London's Barings Bank to handle the transaction, and to issue a loan to fund the purchase. Barings was only too happy to oblige and promptly handed the money over to Napoleon who immediately used the windfall to equip an army to invade Britain.
That the invasion never took off was down to poor planning and the might of the Royal Navy. But had things worked out differently, the Louisiana Purchase perhaps could have brought about a new addition to the French Empire Grande Bretagne.
