In the 1800s, the pristine wilderness of Alaska
was a valuable source of natural resources for its Russian settlers, and the territory
was a major center of world trade. And yet, at the height of the settlement’s
prosperity, the Russians would shock the world when they sold these lucrative lands to the
young and territory-hungry U.S. in 1867 relatively for a paltry sum. In the decades since, Alaska has earned the
U.S. back its purchase price hundreds of times over with the hundreds of billions of dollars
of revenue generated from the territory’s natural resources, including fish, furs, timber,
gold and other precious metals and, of course, petroleum. It just might have turned out to be one of
the worst real estate deals in history for the Russians, and it’s enough to make anyone
wonder why Russia had to sell Alaska to the USA in the first place. Russia’s journey to Alaska started back
in the 16th century. In 1581, eager to spread their Orthodox Christian
faith - and to get their hands on lucrative fur trading lands - Russian forces pushed
their way into the Siberian territory known as the Khanate of Sibir, then controlled by
a grandson of the legendary warrior Ghengis Khan. Russia now controlled the area’s vast natural
resources and gained control of a large new group of taxpayers, and within 60 years of
their first journey into Siberia, they had conquered the whole of Siberia and reached
the Pacific Ocean in the East. It would take more than 100 years for them
to start to look beyond their continent, though. In the early 18th century, Russia’s Peter
the Great formed the country’s first navy in order to explore the coast and determine
just how far east the landmass of Asia extended. It wouldn’t be long before Russia looked
to expand beyond Asia and across the ocean. In 1741, a Danish cartographer and explorer
named Vitus Bering was serving as an officer in the Russian Navy when he was tasked with
leading the first Russian trans-Pacific exploration. Bering and his crew set out from their staging
point in the Siberian city of Okhotsk and crossed the ocean via the straits that would
eventually come to bear his name. At their narrowest points, the distance between
Siberia and Alaska is just 51 miles, so it didn’t take long for Bering to catch his
first sight of Mount Saint Elias, near present-day Yakutat, Alaska. While his first journey had been a success
and led to the discovery of fertile new lands, Bering wasn’t so lucky on his second journey. He and his crew were caught in a fierce storm
and shipwrecked on the Aleutian Islands, a string of volcanic islands off the coast of
Alaska that separates the Bering Sea to the North from the Pacific Ocean to the South. While his crew worked to fix the ship, Bering
succumbed to scurvy and died in December of 1741. Nevertheless, his crew filled their newly
repaired ships with the furs of otters, foxes and seals they had captured and returned home
to share the news of the newly discovered land of riches. When they returned to Russia with their precious
cargo, they so impressed the seasoned Russian fur hunters with their haul that they prompted
something akin to the Klondike Gold rush that would follow a few decades later - Russian
settlers flocked to Alaska en masse in search of furs and fortune. At its peak, Russia’s Alaskan colony was
home to 800 intrepid settlers. The land may have been rich in resources,
but it wasn’t an easy place to live. Communication was a major problem, considering
that they were half a world away from St. Petersburg, and supplies were not quick to
arrive from the motherland. They were also too far north for agriculture
to successfully support a large number of settlers, so the Russians began exploring
further south looking for other settlements with which to trade for food. Eventually, the Russians sent ships as far
south as California, where they traded with the Spanish and even established their own
settlement at Fort Ross in 1812 in present-day Sonoma County. By the mid 19th century, Russian Alaska with
its copious resources was a center of world trade. And yet, Russian Tsar Alexander the 2nd would
shock the world when he made the largest - and perhaps the most foolish - real estate deal
in history. On March 30, 1867, Russian envoy Baron Edouard
de Stoeckl met with U.S. Secretary of State William H. Seward to broker a deal to sell
370 million acres of pristine Alaskan wilderness to the U.S. for the paltry sum of $7.2 million
dollars. The Alaskan territory was one third the size
of all of Europe, and the price tag in today’s dollars would have been just $113 million
dollars. In the years since this historic deal went
down, the U.S. has earned back their purchase price hundreds of times over thanks to Alaska’s
hundreds of billions of dollars worth of natural resources, including the furs, fish, walrus
ivory and timber that initially attracted the Russians, but also the copper, gold, platinum,
zinc, lead and, of course, petroleum that would be discovered years later. This has led to countless rumors about the
deal, with some speculating that Russia only agreed to lease Alaska to the U.S. and that
the U.S. refuses to give it back; others actually believe that the U.S. outright stole Alaska
from Russia. Despite these tales, historians from both
countries agree that the sale was valid - but why would Russia want to sell such valuable
land to the U.S. for such a small sum? Just 30 years after the first Russian settlers
landed in Alaska, the sea otter population, which was the Russian’s primary export,
had been nearly decimated by overhunting, and the colony was no longer profitable. On top of that, Alaska was also incredibly
difficult to support and to defend. All of these issues may have been surmountable,
but for one major problem. In the 1850s Russia was in the midst of the
Crimean War, a brutal, bloody conflict with British and French forces over Russia’s
threats to European interests in the middle east. Fighting a war required huge amounts of cash,
so Russia was eager to unload the struggling Alaskan territory in exchange for more money
to help their war efforts. Unfortunately, the proceeds of the sale did
little to help the Russian war effort - by the war’s end, Russia had lost the war along
with more than half a million troops, mostly to disease, malnutrition and exposure, and
the peace treaty crippled the Russian economy for decades to come, solidifying their fall
from the ranks of world leaders in trade and exploration. The relatively young country of the United
States, meanwhile, was undergoing a period of rapid and controversial expansion. The U.S. acquired Louisiana from France in
the 1803 Louisiana Purchase, and in 1819 they settled a longstanding land dispute with Spain
when the U.S. took control of modern-day Florida and the Gulf Coast lands in exchange for leaving
Texas alone. Of course, this wouldn’t last - after many
failed attempts to purchase Texas from the newly independent Mexican Republic throughout
the 1820s and 1830s, the U.S. annexed Texas in 1836 following years of bloody conflicts. With new lands to the south secured, the U.S.
turned its attention to the west, starting with the Oregon territory. By the early 1800s, Oregon was home to settlers
from Spain, Britain, the U.S. and even Russia, but by 1845, the territory was firmly under
U.S. control. Finally, they looked to the fertile lands
of the south-west coast, and, following a brutal 2-year war, Mexico ceded nearly 1,000,000
square miles of land to the U.S. and the state of California was born. U.S. Secretary of State William H. Seward
would sum up the United States’ prevailing expansionist mindset in 1848 when he wrote
that “Our population is destined to roll resistless waves to the ice barriers of the
north, and to encounter oriental civilization on the shores of the Pacific.” Given this sentiment, it’s hardly surprising
that the U.S. turned its attention to Alaska next. Americans saw the potential in Alaska’s
resources, namely gold, fur and fish at the time, as well as the strategic position of
the territory to facilitate trade with China and Japan. The U.S. was also concerned that Britain,
their mortal enemies at the time, would try to establish a presence in the territory,
and they felt that acquiring Alaska would help the U.S. become a major power in the
Pacific. Not everyone agreed with Seward’s position
on Alaska - the deal was sometimes referred to as “Seward’s Folly”, and Alaska earned
the nickname of “Seward’s Icebox” - but history would side with Seward, and Alaska
would go on to be one of the richest states in the U.S. Today, Alaska’s abundance of natural resources
has allowed the U.S. to earn back the cost of the purchase hundreds of times over, and
the hundreds of billions of dollars earned on the state’s resources allows Alaska to
be one of few states with no state-level or sales taxes. In fact, every inhabitant of the state actually
receives an annual stipend from the state’s massive resource income. Alaska is also the U.S.’s gateway to the
Arctic and a key part of its defence system, with military bases located in Anchorage and
Fairbanks. When the U.S. purchased Alaska from Russia,
relations between the two nations were cordial and the U.S.’s biggest enemy was Britain,
but today the situation is quite different, and Alaska functions as the U.S.’s window
on Russia and allows them to keep tabs on their adversary across the Pacific. Additionally, with melting glaciers opening
more of the Arctic to resource exploration, Alaska gives the U.S. access to these potentially
valuable lands and a seat at the table for these important ecological discussions. No conversation about Alaska would be complete
without taking a look at the impact on the indigenous peoples who inhabited these lands
long before Russian or U.S. settlers arrived. When Bering first crossed the strait and arrived
in Alaska, there were already more than 100,000 people living there, including Inuit, Athabascan,
Yupik, Unangan and Tlingit peoples. There were 17,000 people living on the Aleutian
Islands alone when Bering was shipwrecked there. The presence of these people did little to
dissuade the Russians and, later, the Americans. Early Russian settlers ruled over the native
peoples with an iron fist, taking the children of leaders as hostages to ensure cooperation,
destroying the homes and hunting equipment of tribes to make them dependent on settlers,
and selecting Christianized leaders to control the native populations. The Russians also brought new weapons like
guns and cannons which were foreign to the indigenous populations, making it easier to
subdue any possible uprisings. By the time Russia ceded Alaska to the U.S.,
there were only 50,000 indigenous people remaining in the territory - less than half of the original
population. When the U.S. took control of Alaska they
were in the midst of the Indian Wars in the continental states, and they took a similar
position on the native peoples of Alaska, treating them as potential adversaries. In the 1860s the Bureau of Indian Affairs
undertook a campaign to eradicate indigenous Alaskan culture, outlawing their languages,
religions, art, music and ceremonies. Native Alaskans were denied U.S. citizenship
until 1924, and they could not vote, own property of file mining claims. Even once citizenship was granted, it wasn’t
until 1945 that outright discrimination was banned - it was still common at that time
to see Alaskan businesses with signs prominently stating “No dogs or natives allowed”. In later decades, some attempts at reparations
were made - in 1971 President Nixon ceded 44 million acres of land and 1 billion dollars
to Alaska’s native populations. Many indigenous people don’t believe this
is nearly enough, though. They argue that the U.S. never had the right
to buy Alaska from Russia in the first place, and that the 1867 treaty was merely the transfer
of the right to negotiate with native peoples from Russia to the U.S. Today, more than 740,000 people live in Alaska,
120,000 of whom are native peoples. Russia’s decision to sell its Alaskan territory
to the U.S. in 1867 may have made good financial sense at the time for a nation deep in the
midst of an expensive war, but it would go down in history as one of the worst real estate
deals of all time. If you thought this video was interesting,
be sure and check out our other videos, like this video called “The Real Reason Russia
Wants to Expand”, or perhaps you’ll like this other video.
