On the retirement of Lord George Germain from office, Thompson was sent out to New York in the year 1781, with the royal commission of major, afterwards changed to that of lieutenant-colonel, charged with the task of organizing an efficient regiment of dragoons out of the broken and disjointed native cavalry regiments which had been fighting on the royalist side. This regiment was, however, of no avail; peace was concluded between Great Britain and the United States, and Colonel Thompson on his return to England obtained leave of absence to travel on the Continent. In crossing from England to France, it happened that he had as a fellow-traveller the celebrated historian Gibbon, who, in some subsequent correspondence, spoke of him as "the soldier, philosopher, statesman--Thompson." While on his way to Vienna, Thompson attended a review of the garrison of Strasbourg, and, attracting general attention by his superb English horse and uniform of colonel of dragoons, became introduced to the notice of Prince Maximilian, nephew and presumptive heir of the Elector of Bavaria. This prince was agreeably impressed by the manners and address of Thompson, and furnished him with letters of introduction to his uncle, the Bavarian Elector. When Thompson arrived at Munich (so great seems to have been his power of conciliating favour), he was offered, on his first interview with the elector, an important situation at court, if he would take up his residence there. After a little delay, Thompson accepted this offer, conditional upon receiving permission from his Britannic Majesty. Proceeding to London to obtain the required consent, he was very favourably received by George III., who conferred on him the honour of knighthood, and allowed him to retain his title of lieutenant-colonel, together with the half-pay attached to it. Towards the close of the year 1784, Sir Benjamin Thompson, at the age of thirty-one, took up his residence at Munich, and filled the posts of aide-de-camp and chamberlain to the Elector; being thus connected both with the military and civil service of the Bavarian dominions. Into these twin branches of government he soon introduced many important and salutary reforms; he reorganized the Bavarian army, and introduced many improvements into the art of agriculture as practised in that part of Europe; he also took wise and effectual measures for the suppression of mendicancy, and for the ameliorization of the condition of the poor at Munich, introducing among them some excellent plans for the economization of food and fuel.