When it comes to real estate deals, Thomas Jefferson set a high bar

The Louisana Purchase, which changed America’s history, was a bold arbitrage play.

Soon after the American Revolution, President Thomas Jefferson was afforded the opportunity to buy most of the land west of the Mississippi to the Rocky Mountains from the French emperor, Napoleon.

Unfortunately, he inherited a sizable debt owed to the Netherlands, Spain and France for helping finance the war effort — and an economy too small to pay down the debt. In what would be later called The Louisiana Purchase, Jefferson saw a way to change the course of American history through a real estate arbitrage play.

It was a simple if not genius plan: If the Unnited States government could buy from Napoleon on the cheap, he would then turn round and re-sell smaller parcels to its citizens at an affordable $1 per acre, earning the government a handsome profit with which to pay off war debts, populate the new land and eventually grow the country’s tax base.

It was a good idea on paper, but had a huge flaw. Native American tribes were not party to it, so they viewed settlers as invaders into their territories the way anyone might. Their resistance was fierce and soon the flow of Jefferson’s citizen-buyers dried up before the market got real momentum.

Needing to rebuild confidence in his buyer pool quickly, Jefferson sent the U.S. Army out to impose order and funded an expedition led by Meriwether Lewis and William Clark even further west to prove that the entirety of the rugged West could be safely traversed.

It worked. Feeling confident again, a new wave of Americans soon followed, buying land and ultimately overwhelming the resistance through force of numbers and the unintentional but devastating introduction of diseases for which people of European and African descent had immunities to but indigenous people did not. Eventually, those who remained either assimilated or were moved to reserved lands.

The Louisiana Purchase pulled the country out of near bankruptcy and kicked off one of the largest migrations in human history. Behind it was one of the greatest real estate deals ever, marking Jefferson in his place in history and changing the course of American history.

Talk to us

More in Herald Business Journal

FILE- In this Sept. 30, 202, file photo, a Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, prepares to land at Boeing Field following a test flight in Seattle.  (AP Photo/Elaine Thompson, File)
European aviation agency: 737 Max to be cleared next week

The review of the aircraft “began with the MCAS but went far beyond.”

Garry Clark
Economic Alliance Snohomish County names new CEO

After nationwide search, Garry Clark, a Nebraska business advocate, will take the helm in February.

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Canada OKs return of Boeing 737 Max aircraft

The planes will be permitted to fly as long as they meet specific safety conditions.

Snohomish Delivers concierge Sarah Dylan Jensen picks up tea from Everything Tea on Tuesday, Jan. 5, 2020 in Snohomish, Wa. (Olivia Vanni / The Herald)
A Snohomish service brings goods from the store to your door

Developed by the city, Snohomish Delivers encourages online shoppers to look local. And it’s free.

Arthur Sepulveda, 32, has been looking for his first home since July. He put in bids for four houses and finally found one last month in Lynnwood directly from the builder. (Kevin Clark / The Herald)
Low mortgage rates fuel a frenzied, revved-up housing market

Home prices are soaring and bidding wars are back, and Snohomish County “Zoom towns” are hot locations.

Adam Ling works securing rebar reinforcement for a set of stairs on Tuesday, Jan. 5, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
With lots of people working at home, a rush for renovations

Homeowners with remodeling plans are keeping local contractors busy. Winter hasn’t slowed them down.

FILE - In this Wednesday, Nov. 18, 2020 file photo, workers stand near a Boeing 737 Max airplane parked at Renton Municipal Airport next to the Boeing assembly facility in Renton, Wash., where 737 Max airplanes are made. On Tuesday, Jan. 12, 2021, the company reported final 2020 numbers for airplane orders and deliveries, and they are down from 2019 even though the 737 Max is flying again. (AP Photo/Ted S. Warren)
Boeing deliveries drop despite 737 Max’s return to flight

The company has borrowed billions and cut thousands of jobs to reduce costs.

Kim Williams, CEO of Providence Regional Medical Center Everett and Providence Northwest, will retire July 1. (Olivia Vanni / The Herald)
Kim Williams, the local Providence CEO, will retire July 1

She was born at Providence in Everett and leads the health care provider’s northwest Washington group.

FILE - In this Wednesday, Dec. 11, 2019 file photo, a United Airlines Boeing 737 Max airplane takes off in the rain at Renton Municipal Airport in Renton, Wash. Boeing improperly influenced a test designed to see how quickly pilots could respond to malfunctions on the Boeing 737 Max, and Federal Aviation Administration officials may have obstructed a review of two deadly crashes involving the plane, Senate investigators say. In a report released Friday, Dec. 18, 2020 the Senate Commerce Committee also said the FAA continues to retaliate against whistleblowers.(AP Photo/Ted S. Warren, File)
Boeing to pay $2.5B to settle criminal charge over 737 Max

The settlement includes money for crash victims’ families, airline customers and airlines, and a fine.

Britt Morgan, left, who manages the Scriber Creek Apartments and twin sister Rachel Morgan, who manages the Madison Way Apartments on Wednesday, Dec. 30, 2020 in Lynnwood, Wa. (Olivia Vanni / The Herald)
Twin bridges in the challenging landlord-tenant relationship

When the rent is unpaid, property owners and lessors look to Rachel and Britt Morgan for help.

FILE - In this June 12, 2017, file photo, a Boeing 787 airplane being built for Norwegian Air Shuttle is shown at Boeing Co.'s assembly facility, in Everett, Wash. Boeing is dealing with a new production problem involving its 787 jet, in which inspections have found flaws in the way that sections of the rear of the plane were joined together. Boeing said Tuesday, Sept. 8, 2020, it's not an immediate safety risk but could cause the planes to age prematurely. (AP Photo/Ted S. Warren, File)
Boeing Dreamliner’s defects spur $7.5 billion cash drain

The company intends to repair 787 planes at its factory in Everett

The Rucker Renewal Project is complete but the COVID closures still hamper businesses along the thoroughfare in Everett.  (Kevin Clark / The Herald)
Bad soil, concrete and COVID added to Rucker project costs

Change orders for the project added nearly $2 million to the project’s original $9.5 million budget.