The Louisiana Purchase

[Freddy_the_Pig]

The British acquiescence to Barings is discussed in The First Rapprochement: England and the United States, 1795-1805 by Bradford Perkins. Perkins writes:

Before going to the United States to receive delivery of the first portion of the (bonds), Alexander Baring stopped in London. He sounded out the Addington ministry, for the government’s concurrence was vital if gold were to be shipped out of the country. The Cabinet agreed to allow the deal to go through, although it obviously violated the usual rules of mercantilism as well as British regulations governing trade with the enemy in time of war. Why did they do so? Doubtless two chief reasons were the desire to make doubly sure that Bonaparte got no foothold in North America and to end the troublesome possibility that France might sell the (bonds) in America and establish a fund for military purchases. In addition, the house of Baring was already pre-eminent in London finance, and its desires carried great weight . . . Finally, the bankers were in effect buying (bonds) at 78.5, thus depriving Bonaparte of almost 1/4 of the principle and all of the interest that the US had contracted to pay him. . . .(I)t would be dangerous to say that the permission extended to the Barings was basically an act of good will towards the US. Nevertheless, relations with America were doubtless considered.

Even with all that said, the decision seems a little whacko. Britain and France spent the next decade waging economic war on each other via blockades and embargoes. Why spot the enemy millions of dollars in gold?

Perhaps that is why Addington sent his personal protest, cited above, even though his Cabinet had approved the deal.

[md2000]

…
(I)t would be dangerous to say that the permission extended to the Barings was basically an act of good will towards the US. Nevertheless, relations with America were doubtless considered.

Considering in less than 10 years the British went to war with the USA (over British arrogance, mainly) it seems this was a rare show of generosity then.

[dolphinboy]

Fascinating discussion… I see a Masters thesis in History, and/or a best selling book for someone. I wish I could go back to college and change my degree…

[Captain_Amazing]

@md2000

Considering in less than 10 years the British went to war with the USA (over British arrogance, mainly) it seems this was a rare show of generosity then.

The US declared war on Britain, not the other way around.

[Kobal2]

On paper, yes.
But the British had been acting in hostile fashion for a while before that happened, as I understand it. Notably by press ganging American citizens into the Royal Navy and arming Native American tribes hostile to the US. You can’t really pull that sort of shenanigans and not expect an impolite response.

[UDS]

@Tom_Tildrum

Did the American government continue paying on the bonds to the restored Bourbon regime after the fall of Napoleon? Or had the advance covered all that, such that the US was simply paying Barings?

A change of government in France would absolutely not be a reason for the US to stop paying interest on bonds it had issued, and which were held at the time by France. The damage done to the credit of the United States (and therefore to its ability to issue further bonds) would be considerable.

[md2000]

@Kobal2

On paper, yes.
But the British had been acting in hostile fashion for a while before that happened, as I understand it. Notably by press ganging American citizens into the Royal Navy and arming Native American tribes hostile to the US. You can’t really pull that sort of shenanigans and not expect an impolite response.

As I understand it, the British would even stop American ships on the high seas looking for British deserters; in the days before everyone carried ID, proving you were NOT an English deserter was fairly difficult, when some lower class people did not know where they were born or how old they were. The British navy was not terribly concerned, and erred on the side of helping themselves to anyone who might be a deserter or British citizen.

[MikeS]

@Kobal2

But the British had been acting in hostile fashion for a while before that happened, as I understand it. Notably by press ganging American citizens into the Royal Navy and arming Native American tribes hostile to the US. You can’t really pull that sort of shenanigans and not expect an impolite response.

From GFactor’s staff report on the War of 1812 (now sadly missing from the main site):

The part about exerting a malicious influence over the Indians wasn’t true, although Madison probably believed it was. The British in Canada had long supported the Indians, but far from urging them to assault Americans were trying to persuade them not to do so. The Indians were angry at American expansionist policies – the Americans had attacked them more than once. The British feared (correctly) that they would be blamed for Indian belligerence. Truth is, the last thing the British wanted was a war with America. They had their hands full with Napoleon.

The press-ganging part was definitely accurate, though. The Royal Navy needed plenty of manpower to fight—wait for it—Napoleon, and for some reason a lot of British sailors were deserting, the enticements of rum, sodomy, and the lash evidently being minimal.

[Hari_Seldon]

@Deeg

I would assume that the Crown would eventually be informed. Was any action at all taken against Barings?

Yes, the Brits started a breeding program that eventually resulted in the birth of Nick Leeson.