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Why the U.S. Did Not Owe France Post-American Revolutionary War Debts

April 12, 2025Culture2608
Why the U.S. Did Not Owe France Post-American Revolutionary War Debts

Why the U.S. Did Not Owe France Post-American Revolutionary War Debts

Sometimes, history offers great opportunities to debunk myths and clarify misunderstandings. The claim that the United States did not pay France all the debts incurred during the American Revolutionary War is one such example. This article aims to clear up this notion by presenting historical facts and key documents.

Settlement of U.S. Debt with France in 1795

The U.S. did, in fact, settle its debts with France in 1795, a settlement that involved the involvement of James Swan, an American banker. Swan played a crucial role in this process by privately assuming French debts at slightly higher interest rates. He then resold these debts on the domestic U.S. market at a profit. Through this strategy, the U.S. was able to clear its obligations to the French Government without a direct payment, ensuring financial closure and ongoing economic stability.

The key move here was that by leveraging the financial markets, Swan effectively redirected the payment to individual investors rather than the French government, thus avoiding any direct governmental debt redemption.

Historical Context: 1784-1800

Between 1784 and 1800, the U.S. government took significant steps to address its Revolutionary War debts. One major milestone was the settlement reached in 1795, which marked the end of all direct government-to-government debt. The U.S. then focused on clearing debts owed to private investors, both within the United States and in Europe. This focus shifted the burden from public finances to private sector transactions, thereby safeguarding public coffers from unnecessary expenditure.

Debate on the Nature of Debts in the 1780s and 1790s

Some critics, like those who argue that the U.S. obligations to France were to Robespierre or the French Republic during its revolutionary period, miss a critical point. The debts were to the King of France, not the revolutionary government that came to power much later. Similar arguments can be made about Iran's nuclear deal and the Obama administration, where the claims that the U.S. owes money are often based on outdated or misinterpreted historical facts.

The assumption that the U.S. must pay debts regardless of the governmental regime in power, as suggested, is a flawed one. It equates the actions of one regime with that of another, which is a dangerous oversimplification. For example, thinking that one must give money to Hitler after he took over France would be absurd and anachronistic.

Post-WWI and WWII Allegations

Another argument brought up is that after World War I and World War II, the U.S. is "probably all good" in terms of debt settlement. While these wars did involve significant financial and human costs, the U.S. had already addressed its revolutionary debt long before these global conflicts. The wars with the Axis powers and the establishment of the Allied force did not retroactively validate any pre-existing debts to France from the late 18th century.

The key point is that the U.S. had handled its Revolutionary War debts in a systematic and legally sound manner, without deferring to a later regime or conflating historical contexts.

Reasons for the Lack of Obligation to the French Revolutionary Government

There were several reasons why the U.S. did not owe debts to the French Revolutionary Government:

The original creditor (the King of France) was the one who incurred the debt, not the revolutionary government.

The French Revolution was a radical change in the regime, and the new government could argue that they were not indebted to the old.

The U.S. government was not committed to paying debts incurred by other regimes.

The U.S. focused on securing its own financial independence and stability.

These reasons underscore the importance of clarity in governmental obligations and the changing nature of political power in history.