On March 30, 1867, 155 years ago, Russia sold Alaska to the United States for a mere $7.2 million (about 2 cents per acre). Fifty years later, the gold rush in Alaska brought over $1 billion in wealth to the United States. In addition to gold, the region boasted abundant resources like timber, salmon, and oil. Moreover, with the advent of the Cold War, Alaska became a vital strategic asset for the U.S. military. Clearly, the United States gained the upper hand in this transaction.
The Purchase of Alaska
The purchase of Alaska was orchestrated by U.S. Secretary of State William Seward, whose name was given to Seward, Alaska. In 1867, he reached an agreement with Russia to buy the territory for $7.2 million.
Why Did Russia Sell This Rich Land? And Why to the U.S. and Not Canada?
To understand why Russia sold Alaska, and why they chose the United States over Canada, we need to go back to the 19th century—a time that set the stage for the early formation of the Cold War, a period historians call the “Great Game.” Like in Game of Thrones, the stakes involved more than just a few thrones. 
Russia’s Control of Alaska
Between 1829 and 1907, Russia and the British Empire had a hostile relationship. Both sought to expand their influence in Central Asia and the Pacific, leading to intense competition. This competition resulted in several military conflicts, the most famous being the Crimean War (1853-1856). In that war, Russia faced an alliance of Britain, France, Sardinia, and the Ottoman Empire. Ultimately, Russia was defeated, with an estimated 800,000 casualties in the Russian Empire.
Although the conflict was primarily in Europe and Asia, it had significant repercussions in the Pacific. After decades of exploration, Russia claimed Alaska in 1741 and later established its first settlement in North America on August 3, 1784. This settlement was created by the Shelikhov-Golikov Company, one of the fur trading organizations that represented the Empire in the region. In 1799, Tsar Paul I merged several of these companies to form the Russian-American Company (RAC). As a powerful corporate entity, the RAC held a trade monopoly on the region’s resources, as well as the responsibility of establishing new settlements and expanding Russia’s presence in the New World.
The Rise and Fall of Russian Settlements
To establish a foothold in North America, RAC manager Alexander Baranov sent his men all the way to Northern California, where they founded a frontier outpost called Ross Fort on February 2, 1812. The company’s grand vision was to use Ross Fort as an agricultural hub to supply food to both the fort and settlements in northern Alaska. With a steady food supply, colonists could harvest the most lucrative commodity of the Pacific: sea otter pelts. These pelts were even more valuable than those of beavers and seals and became the lifeblood of the Russian-American economy.
However, Ross Fort’s agricultural output was insufficient, and worse still, Russian hunters over-hunted the sea otter, almost driving the species to extinction in the North Pacific. As a result, Russia abandoned Ross Fort and sold it to an American settler in 1844.
The Crimean War and the Burden of Alaska
During the Crimean War, Alaska became a burden for Russia. If Britain had invaded the territory, the exhausted Russian army would have struggled to defend it. Fortunately, the British did not venture into Alaska during the war, but the loss in Crimea made many in the Russian government question the wisdom of holding on to such a remote and sparsely populated colony, especially as its primary source of income, the sea otter fur trade, was disappearing. Additionally, American and British whaling ships frequently entered waters controlled by the RAC, further complicating the situation.
By the late 1850s, Russia considered selling Alaska. Canada, which shared a 1,538-mile (2,475 km) border with Alaska, could have been an ideal buyer. However, at the time, Canada was not yet self-governing and was still under British control. Selling Alaska to the Canadians would have strengthened British influence during the Great Game, which Russia wanted to avoid.
The Unexpected American Ally
In a surprising turn of events, Russia found an unexpected ally during the Crimean War: the United States. American newspapers overwhelmingly supported Russia’s position, and even though the U.S. government officially remained neutral, American states sent weapons and supplies to the Russian army.
The Threat of British Imperialism
Both Russia and the United States saw British imperialism as a threat. In light of this, in 1854, Russia’s ambassador to the U.S., Baron Edward de Stoeckl, proposed selling Alaska to the United States. Although the deal did not go through, it wasn’t until after the U.S. Civil War that the matter was seriously revisited.
Secretary of State William Seward, an exceptional diplomat, had been advocating for the purchase of Alaska for years. In 1867, Seward reached an agreement with Stoeckl to purchase the territory for $7.2 million (equivalent to more than $138 million today). On April 9, 1867, the U.S. Senate approved the deal, although Congress did not allocate the funds until 1868.
The Formal Transfer of Alaska
On October 18, 1867, Alaska officially became a U.S. territory. Since 1911, the residents of this far-northern land have celebrated the anniversary of this event as “Alaska Day.”
