IN DECEMBER 1791, Esteban Miró sailed for home, handing over the governorship of Louisiana to Baron Hector de Carondelet. Like Miró, Carondelet had been a soldier before joining the colonial service, but, Flemish-born and something of an outsider, he lacked his long-serving predecessor’s confident judgment. Small, portly, and fussy, he compensated by paying close attention to administrative detail— his modernization of the municipal government of New Orleans, and the introduction of street lighting and waste collection, left it a better- run and cleaner place. It was also more expensive for, as an anonymous official in Madrid sharply noted, “He has always shown a great predilection for new projects . . . without ever thinking of the funds or expenditures that such Projects naturally will cost.” During his administration the expense of running Louisiana rose to over $800,000 a year, while its revenues never amounted to more than $75,000, a disparity that would eventually force Madrid to look for cheaper ways of defending its silver-cored empire.
The flair in Carondelet’s administration came from the governor of Natchez district, Manuel Gayoso de Lemos. Miró, who was rarely deceived about character, judged that Gayoso “distinguished himself through his talent, knowledge of various languages and excellent conduct.” He was also artistic, emotional, and devoted to his family. Educated in England and twice married to American women, he had a cosmopolitan background that helped in the government of a fast-growing, volatile population of American, British, French, and Spanish settlers. Although most were concentrated around Natchez, others were scattered across much of modern Alabama and Mississippi, and Gayoso’s responsibilities included command of all the forts that stretched north along the Mississippi.
On July 5, 1792, he provided Carondelet with a report on the province he now governed, entitled “Political Conditions of the Province of Louisiana.” Ranging widely over the challenges presented by American settlers, British imperialists, and French revolutionaries, Gayoso picked out one unjustly neglected asset: “In Kentucky we have had Don Jaime Wilkinson well affected to our side. He is a person of great talent and influence, who has twice come down to this province and presented several memorials. In his own country he has performed several important services to this province. Yet although he was recommended by Don Esteban Miró for a pension and other help, the resolution was so long delayed because of the distance that separates us from the court [in Madrid] that in the meanwhile he lost his credit in Kentucky for lack of means to maintain it.” To retrieve his fortunes, Gayoso explained, Wilkinson had joined the U.S. army, but since his enlistment he had “suspended his correspondence with the governor at New Orleans and with me.”
Like many colonial reports, Gayoso’s was designed for reading back in Madrid as well as in New Orleans. In fact, as he knew well, Wilkinson was one of Carondelet’s top priorities. In February 1792, the new governor of Louisiana had sent the American a message informing him that the pension of two thousand dollars a year suggested by Miró had at last received royal approval, and that it was to be backdated to January 1, 1789. Should Wilkinson wish to resume his connection with New Orleans, Carondelet could promise that the sum of four thousand dollars was immediately available. Gayoso was still drawing up his report when, as he noted, a messenger, Michael La Cassagne, passed through Natchez on his way to New Orleans with a sealed letter from Don Jaime. Although he had not read its contents, Gayoso expressed his confidence that by the time his report was delivered, the governor of Louisiana would know whether Miró’s spy had been reactivated.
OF ALL THE CREDITORS pressing Wilkinson for money, La Cassagne was the most insistent. Having converted Wilkinson’s original loan to one involving his partner Peyton Short, the Frenchman had begun to squeeze both for payment. As La Cassagne’s vise closed, Short’s pleas for help from his partner became ever more desperate.
In December 1791, just before leaving for Fort Washington, Wilkinson put up his most valuable asset for sale, the town of Frankfort, with its strategic location, fine house, and ferry. His haggling over the price offered by Andrew Holmes, another Lexington storekeeper, brought a cry of pure anguish from Short. “To save me in this hour of extreme distress,” he wrote, “I now call upon you by every principle that ever warmed an honest heart. Both God and man can witness that you now have it in your power. I beg, entreat, and conjure you to avail yourself of the happy occasion— embrace the offer made you by Mr. Holmes.” To his relief, Wilkinson finally accepted Holmes’s price, three hundred thousand pounds of tobacco, in January 1792. Less than twelve months later, Kentucky’s legislature chose Frankfort as the site of the newly independent state’s capital. Land values quickly rose, and the fortune that Wilkinson always dreamed of passed instead to Holmes, and soon afterward to his creditors.
Still outstanding were a further fourteen hundred dollars due to La Cassagne and other debts amounting to more than fifteen thousand dollars, about twelve times his military salary. In the first four months of his career in the army, he sent his friend and legal adviser in Lexington, Judge Harry Innes, $180 from his meager pay of $104 a month to satisfy the most urgent demands and asked him to stave off the rest. “I pray you, my friend, to say that I have left (if you think as I do) sufficient property to discharge my debts and that I am determined to do this at any sacrifice,” Wilkinson told Innes. “There is much confusion in my books and papers, but yet under such an explanation as I can give, justice may be done.”
He had a few remaining assets— the house in Louisville, and a partial interest in up to seventy-five thousand acres elsewhere in Kentucky, although their real ownership was in dispute. These doubts about property titles were the legacy of Virginia’s confused and corrupt land- sales policy. To establish ownership entailed complex legal battles pitting wealthy outsiders against homegrown occupiers, and that destroyed the market for land in Kentucky.
In April 1792, Wilkinson wrote again to Innes, offering to transfer all his assets and give him “uncontrolled power over my whole property in your own language.” He wanted above all else to “remove the shackles [of debt] which oppress my spirit and sit heavy on my soul.” The heaviest shackle on his soul was the penal interest on what he owed La Cassagne— within two years the charges increased an original loan of one thousand dollars by almost half. In this desperate state, Carondelet’s offer of four thousand dollars must have appeared as a lifeline. Yet Wilkinson took five months to respond. So long as he had a chance of being made commander of the Legion, he appears to have resisted the lure.
The decision to send La Cassagne to pick up Wilkinson’s back pay as a Spanish agent demonstrated not only that he had made an irrevocable, life-changing decision but, more mundanely, that his credit had finally run out.
The Frenchman spent three months in New Orleans developing contacts in the city— he later settled there and made another fortune as a slave dealer—but when he arrived back in Louisville in November, he passed on only twenty- six hundred dollars to Wilkinson. The rest was retained to pay off the loan. In December 1792, Wilkinson sent Carondelet the first report for which he had been paid as a spy.
IN HIS OTHER LIFE, he was the energetic, extrovert officer praised by Washington and Knox. No hint appeared of the inner struggle caused by the temptation of treachery and the threat of bankruptcy. With the warmer weather in 1792, he sent out construction, foraging, and haymaking parties to each of the new forts. And at Fort Washington, he also demonstrated a gift, learned perhaps from his mentor Horatio Gates, for raising the morale of defeated troops.