Why did Russia sell Alaska to the US at a cheap price?

In 1867, Russia sold the territory of Alaska to the United States for $7.2 million at a time when it was famous for its gold and mineral deposits. Within the next 50 years, the Americans had recovered from this land 100 times more. But why did the Tsar have to sell his land rich in resources at such a cheap price?

A petition petitioning Russia to annex Alaska posted on the White House website garnered over 35,000 signatures before it was removed. Many people have long thought that the US stole Alaska from the Russians or rented it and didn't pay it back. But in fact, the Alaska sale and purchase agreement was officially and legally signed by both parties.

 The Alaska sale and purchase agreement has been officially and legally signed by the US and Russia.

Alaskan 'specialty': Gold and otter skin

In the 19th century, Russian Alaska was one of the centers of international trade. In the capital Novoarkhangelsk (present-day Sitka), merchants bought and sold many goods such as cloth, tea from China, and even sold ice and snow to southern America, because there were no refrigerators at that time. Shipyards are busy building, mining mines are also busy. A large number of gold mines are known in the region and selling this resource-rich land is insane.

Russian merchants came to Alaska to hunt for tusk tusks (as expensive as ivory in those days) and sea otter skins – valuable commodities supplied by Alaska Natives. The trade was facilitated by the Russian-American Company (RAC), which controlled all of the mining fields in Alaska and enjoyed exclusive privileges from the Imperial Russian government. The royal family not only collects huge taxes from the company, but also owns a large share of the shares of RAC.

The administrative power in Alaska was the talented merchant Alexander Baranov. He built schools and factories, taught the natives to grow potatoes and rubataga, built shipyards and fortresses, and expanded the sea otters trade. Under Baranov, RAC did extremely well, with annual profits growing by more than 1,000%.

But when Baranov retired, his replacement, Captain Hagemeister, replaced a number of staff members, bringing in many new shareholders from the military world. The new team quickly took over RAC's facilities, but their actions ruined the company. Leaders of RAC cut the purchase price of sea otters by half. As a result, over the next 20 years, the native Eskimos and Aleutians killed nearly all of the sea otters, draining Alaska's most profitable source of income. The natives raised an uprising, after which the Russians opened fire from warships to destroy their coastal villages.

The RAC began to look for other sources of profit, such as the tea and ice trade, but business became increasingly difficult even as the government subsidized 200,000 rubles a year.

Difficult situation

When the Crimean War broke out, Britain, France, and Turkey simultaneously turned against Russia. Moscow could not continue to subsidize or protect Alaska, leaving the sea lanes through it gradually controlled by allied ships. Even Alaska's famous gold mining industry went downhill and there was concern that the British might blockade Alaska and force the Russians to leave this place empty-handed.

Tensions between Moscow and London increased, while relations with American authorities were warmer than ever. Both sides thought about the idea of ​​buying and selling Alaska almost at the same time. Therefore, on behalf of the Tsar, Russian envoy to Washington Baron Eduard de Stoeckl opened talks with US Secretary of State William Seward about this deal.

While the authorities are negotiating, public opinion in both countries opposes such an agreement. 'How can we give away the land that we have poured so much time and energy into, the land where the telegraph was delivered, where the gold was discovered?', the newspapers Russia asked the question. "Why do Americans need this 'ice box' along with 50,000 wild Eskimos, having breakfast with fish oil?", the American press also raised the issue. Even the US Congress did not approve the sale.

However, on March 30, 1867, in Washington DC, the two sides signed an agreement that Russia would sell the US 1.5 million hectares of land in Alaska for $7.2 million, which is only 2 cents/acre (ie 4 cents/acre). .74 USD/km2).

The official handover ceremony took place in the capital Novoarkhangelsk. Russian and American soldiers lined up under the flagpole, after which the Russian flag began to be lowered in a barrage of cannons. However, a strange situation happened when the flag got stuck on the top of the pole, causing a sailor to climb up to remove and throw it down. The flag flew down and hit the bayonets of the soldiers. That is a bad omen!

After that, the Americans began to confiscate all the buildings in the city of Novoarkhangelsk and renamed the Alaskan capital Sitka. Hundreds of Russians who refused to acquire American citizenship had to leave on merchant ships.

Just a short time later, gold began to flow out of the Alaskan 'ice box', bringing the United States hundreds of millions of dollars.