Financial History 143 Fall 2022 - Page 8


The Personal Finances of Presidents , Part 1 : Thomas Jefferson

By Brian Grinder and Dan Cooper
These sad words , written by Thomas Jefferson to his grandson , came after the apparent failure of a desperate last-ditch attempt to pay off Jefferson ’ s debts . The scheme called for a lottery to dispose of some of his property , but the lottery needed approval from the Virginia legislature . Unfortunately , Jefferson ’ s friends in that august body were dragging their feet . On February 3 , Jefferson ’ s grandson wrote to his grandfather from Richmond to report the disappointing news .
Although the legislature approved the lottery towards the end of February , it was not successful . Jefferson died on July 4 , 1826 , with debt outstanding of over $ 100,000 . This debt had accrued over the span of his adult life . Some of it was the result of Jefferson taking possession of an inheritance from his father-in-law John Wayles before Wayles ’ s debtors were paid , but a good portion of the debt was of Jefferson ’ s own making . The debt outstanding at his death included a portion incurred from pre-Revolutionary War days , as well as some from poor financial decisions made during Jefferson ’ s retirement .
Throughout his life , Jefferson remained optimistic that something would turn up to relieve him of his onerous debt . He longed for the debt ’ s extinguishment so that he could retire in peace and comfort to his beloved Monticello .
In Thomas Jefferson : A Personal Financial Biography , Steven Hochman concludes that “ Jefferson was not a good manager of his personal finances .” Although debt was a way of life for Virginia plantation owners , Hochman notes that those who managed their resources effectively and invested wisely prospered . The penury Jefferson suffered in his final years was not a foregone conclusion .
The first evidence of Jefferson ’ s propensity to live beyond his means comes from his college days at William and Mary . In a letter written in early 1790 , Jefferson
For myself , I should not regard a prostration of fortune . But I am overwhelmed at the prospect of the situation in which I may leave my family . My dear and beloved daughter , the cherished companion of my early life , and nurse of my age , and her children , rendered as dear to me as if my own , from having lived with me from their cradle , left in a comfortless situation , hold up to me nothing but future gloom . And I should not care were life to end with the line I am writing , were it not that I may yet be of some avail to the family .
admitted , “ During a part of the time that I was a student in Williamsburg my expences [ sic ] were greater than they ought to have been .” Throughout his life , Jefferson spared no expense for his two great weaknesses : books and wine . He assembled one of the largest personal libraries in the United States and probably had one of the best stocked wine cellars in the country .
The War of Independence laid waste to Jefferson ’ s finances . When he sold land during the war to pay off debts to British firms , he was forced to accept Virginia paper currency as payment . Wartime inflation so reduced the value of this currency that his creditors refused it . Jefferson lamented , “ I sold land for £ 4200 to pay these two debts . I did not receive the money till it was not worth oak leaves .” Moreover , in 1781 , the British army under Cornwallis occupied his Elk Hill properties for 10 days . In 1787 , Jefferson wrote a letter to William Jones , one of his longsuffering British creditors , describing the damage done by British troops at Elk Hill :
Again , Ld . Cornwallis encamped 10 days on an estate of mine at Elk- Island , having his headquarters in my house . He burned all the tobacco houses and barns on the farm , with the produce of the former year in them . He burnt all the enclosures and wasted the fields in which the crop of that year was growing ( it was the
— Thomas Jefferson to Thomas Jefferson Randolph , February 8 , 1826
month of June ). He killed or carried off every living animal , cutting the throats of those which were too young for service . Of the slaves he carried away thirty . The useless and barbarous injury he did me in that instance was more than would have paid your debt , principal and interest . 1
During the war , many Virginians hoped for permanent relief from their British debt , but the 1783 Peace Treaty of Paris reconfirmed those debts , much to their chagrin . 2
Jefferson ’ s public service forced him to divide his attention between affairs of state and plantation management . Years in France followed by a stint as Secretary of State , one term as Vice President and two as President took their toll on his finances . Jefferson ’ s absence from Monticello meant that he had to rely on plantation managers to grow and harvest crops . This met with mixed results over the years , as some managers performed admirably while others left much to be desired .
Jefferson was forced to spend his own money to maintain a residence in France . During his presidency , he was also responsible for paying his free servants at the White House . This , according to Jefferson expert Lucia Stanton , consumed almost 15 % of his presidential salary of $ 25,000 a year . 3
Jefferson ’ s financial predicament was not helped by his obsession with architecture and his constant need to build .
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