The Story of Thomas Jefferson’s Personal Debt

[Dateline: 23 October 2008]

To read the previous essay in this series, Click Here: Visiting Thomas Jefferson's Monticello (Part 2)

I’ve been writing a series of essays about my recent vacation to several historical sites in Virginia, one of which was Monticello, the home of Thomas Jefferson. In this essay I’m going to tell you about the great problem of personal debt that Jefferson and his family faced near the end of his life. There are lessons that we can learn from this real-life example.

It so happens that Jefferson was plagued with financial problems for many years. Several reasons are given for this. First, it is reported that Jefferson inherited debt from his father-in-law, John Wayles who died in 1773. Thomas Jefferson was 30 years old at that time and had been married one year to Martha Wayles. I have never heard of inheriting debt, but that is noted in the historical record.

A second reason for Thomas Jefferson’s financial problems was his expensive tastes. French wines, so many books, and many fine furnishings contributed to his problems. In other words, he lived beyond his means.

But, in his later years there were two events that conspired to ruin Thomas Jefferson. One was that he cosigned a sizable loan for a friend. The man died a year later and Jefferson was stuck with the debt.

Then there was the matter of the Panic of 1819 and the severe recession that ensued. From what I understand, this national economic calamity came about as a result of expanding credit and real estate speculation which led to a bubble market and eventual crash. Banks failed, real estate values plummeted, and loans were called in. Unemployment in the cities was as high as 75%. It was a bad time for the nation as a whole and many families of means were devastated, including Thomas Jefferson’s.

Near the end of his life, Jefferson faced the probability that he and his family would have to leave their beloved home at Monticello for Poplar Forest, Jefferson’s smaller plantation further south in Bedford County, Virginia.

Thomas Jefferson’s grown grandson, Thomas Jefferson Randolph, known in the family as “Jefferson,” played a prominent role in trying to ameliorate the dire consequences of his grandfather’s financial troubles. In a letter written by Thomas Jefferson’s daughter, Martha (“Jefferson’s” mother), she tells the story of their plight at that difficult time. By the way, Martha’s husband was, I’m quite certain, also financially ruined in the crash of 1819.
”...the arrangement made by him and fully acquiesced by me, was that we should go to Bedford, retaining only the necessary furniture for that house, and a small but effective household of servants and sell the whole property here and as many negroes as would pay the debts—it was a most bitter sacrifice to us all, but nothing to the anguish of seeing my dear father turned out of his house and deprived in his old age of the few pleasures he was capable of enjoying, and to know his few remaining years would be embittered and shortened by it made us recoil from the cruel task of proposing it to him; but the crisis was at hand, things could no longer go on in the train they were, the consequences of a delay would have been complete ruin a few years later, when we should no longer have possessed a home to shelter us. It was paying too much for the privilege of living a few years longer at Monticello. I never saw Jefferson so much agitated as he was, and the situation of the rest of the family even down to the little children was really as if a recent death had taken place. To my father the shock was as we foresaw dreadful. He said that he had lived too long, that his death would be an advantage to his family. But Jefferson easily convinced him that under existing circumstances it would, independent of our love for him, be a calamity of frightful magnitude. That his life was as necessary to the interests of the grandchildren and my self, as it was precious to our hearts. The first shock over, he became reconciled and we were trying to look forward to plans of future comfort and improvement.”

It is reported elsewhere that the ruddy-faced Thomas Jefferson turned white when confronted with the scheme to sell his Monticello and escape to Poplar Forest. But then he came up with a scheme of his own, and Martha explains it in her letter...

”...lying awake one night from painful thoughts, the idea of the lottery came like an inspiration from the realms of bliss to my father. The moment it was light he got up and sent for Jefferson who immediately saw in all its bearings the immense advantage of the scheme. Property enough sold at a fair value to pay his debts, a maintenance for the family, the means of educating the boys, and a home for myself and children that might be unprovided for, and last tho not least, the undisturbed possession of Monticello during his precious life. All that will be ensured. And to make the crops adequate to our necessary expenses we must look to that being to whom under heaven we are indebted for every comfort we enjoy, and to the lengthened life of my dearest dearest father who but for that precious gift of heaven (Jefferson) would have had his heart broken by his difficulties and ourselves reduced to abject want.”

The lottery idea faced obstacles but it was pursued. I don’t totally understand how it was to work. But it never did work and was eventually abandoned. The lottery idea did, however, evidently, buy precious time. Thomas Jefferson died at Monticello on the 4th of July, 1826, fifty years to the day after he signed the Declaration of Independence.

Shortly thereafter, the contents of Monticello were auctioned, as were the slaves. Then Monticello itself was sold. It was a sad ending to the story of a great American.

In my next essay I will continue this dialogue about Thomas Jefferson and debt by telling you the story of Jefferson’s attitude towards national debt. This subject is, of course, very timely as 175+ years later, our nation faces a growing mountain of debt beyond anything our third President would have ever imagined. Thomas Jefferson's insights into the subject are very wise, and very sobering.
To read the next essay in this series, Click Here: Thomas Jefferson on Government Debt (Then & Now)


Anonymous said...


This is a part of Jefferson's story I never knew. Thank you for sharing it. I look forward to learning about his insights on national debt.


Unknown said...

I thought of you when I read a nonsensical article in our local paper about how our economy NEEDS "credit" (ie, debt) to survive. I posted it to my blog with my thoughts, if you're interested.


Anonymous said...

I think I found the story of the lottery!

Larry M. Aden said...

I will defend Jefferson until my dying breath, in all but his employment of slavery.
You left out several facts about how Jefferson got into his economic crunch, which obviously did not happen overnight from his "high living". It is an historical fact that throughout his life he had been cheated time and time again, by a long string of merchants, whenever he ordered something from Europe, hence, his utter hatred of the merchant class.
And, just like Washington, he never took a salary for performance of any of his many political offices in service to his Nation or his State.
Anyone who maligns Thomas Jefferson for his personal debts is a cretin and an ingrate.

Anonymous said...

I liked this article on his debt.
It sounds like he did take his annual salary from being president Larry. Might want to stop throwing around the terms cretin and ingrate unless you want to be called a d bag.

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