How much did the Louisiana Purchase cost?

The Louisiana Purchase cost the United States 15 million dollars in 1803, an average of less than three cents per acre for about 828,000 square miles of territory, making it one of the greatest real estate bargains in history. The breakdown of the price was specific: 11.25 million dollars for the land itself paid to France, plus 3.75 million dollars in assumed claims that American citizens held against France for losses suffered during the Quasi-War of 1798 to 1800 and earlier French interference with American shipping. Total: 15 million dollars exactly.

The United States lacked the cash to pay outright. The Treasury arranged loans from British and Dutch banking houses Baring Brothers in London and Hope and Company in Amsterdam, ironically since Britain was about to be at war with France again. France received the funds in bonds bearing six percent interest payable over fifteen years; the bonds were then sold by Napoleon's ministers to finance his European wars. The total cost to the United States including interest was approximately 23 million dollars by the time the bonds were redeemed in 1818. Even at that fully loaded cost, the price worked out to roughly 4 cents per acre.

The economic reasoning behind the price was complicated. President Thomas Jefferson had originally authorized special envoy James Monroe to spend up to 10 million dollars for New Orleans and the Floridas alone, expecting that France would not part with the rest of Louisiana. When French foreign minister Charles Maurice de Talleyrand offered the entire territory in April 1803, Robert Livingston and Monroe quickly accepted at 15 million. The price was a fraction of the territory's true value, but it represented an enormous fiscal commitment for an American government whose annual federal budget was only about 10 million dollars in 1803.

Critics in Congress called the deal both unconstitutional and ruinous. New England Federalists particularly objected because the new territory would shift political power westward and southward, weakening their region. Senator Timothy Pickering of Massachusetts denounced the purchase, and some Federalists toyed with secession during the crisis. Still, the Senate ratified the treaty 24 to 7 on October 20, 1803, and the House appropriated the funds in November.

Spain formally transferred Louisiana to France on November 30, 1803 in New Orleans, and France formally transferred it to the United States on December 20, 1803 at the same ceremony. The cash, bonds, and interest flowed over the next fifteen years, but the territorial transfer was complete and permanent.