10. The War of 1812 and the Financiers of the Louisiana Purchase

After returning to Europe to share in the profits from the Mexican silver scheme, Vincent Nolte and David Parish, the agents that Labouchere had sent abroad originally, ignored his offers of employment in Europe to return to the U.S.—Nolte to New Orleans to set up as a cotton factor for the emerging trade with Europe and Parish to Philadelphia to develop land in northern New York state. They arrived in time for the start of the War of 1812, which disrupted their optimistic plans, but which enabled both to engage in large-scale smuggling activities. While these undercut Gallatin’s collection of revenues, they did enable continued payment of interest on the Louisiana bonds. Nolte’s cotton bales, set up for illegal export in late 1814, were seized by Andrew Jackson to stabilize the cannons he set up on the levee south of New Orleans, a critical element in Jackson’s victory. Parish’s trade on the St. Lawrence was kept out of military action thanks to his role in underwriting the largest war-time loan to the United States, jointly with Stephen Girard and John Jacob Astor. All three financiers had active accounts with both Baring and Hope, but Barings’ role was limited to covering shortfalls in U.S. payments of interest on the Louisiana bonds, while charging the U.S. account annual interest at 5%.