USA and Russia Sign Agreement to Sell Alaska

Table of Contents

• Background: Why Did Russia Sell Alaska?
• How Russia Got Alaska in the First Place
• Why Russia Said "Bye" to Alaska
• The $7.2 Million Deal of the Century
• The Big Transfer & America's Reaction
• Alaska’s Glow-Up: From Icebox to Gold Mine
• What If Russia Never Sold Alaska?

Background: Why Did Russia Sell Alaska?

Yep, Russia is massive... but it could’ve been even bigger! In 1867, the Russian Empire gave up a whopping 1.5 million square kilometers of land in North America. That land? ALASKA. And they didn’t even lose it in war—they sold it to the U.S. dirt cheap. Wild, right?

At the time, people thought it was a dumb deal. Now? It's seen as one of the smartest buys in American history and one of Russia's biggest oopsies.

How Russia Got Alaska in the First Place

Back in the 1700s, Russia was on an expansion roll. After conquering Siberia, they kept pushing east and ended up discovering Alaska. Thanks to explorers backed by Russian emperors (shoutout to Peter the Great), they mapped the area during the mega-expensive Great Northern Expeditions. Some years, these expeditions burned through 15% of Russia’s entire budget. Yikes!

But it paid off—Alaska was full of valuable sea otters, and their fur was worth a fortune. So in 1799, the Russian-American Company was born. It ran the fur trade, set up settlements, and acted like a mini government. Think Russian version of the East India Company. Sitka (then called New Archangel) became the main hub.

Local Indigenous groups like the Alutiiq and Aleuts were forced into hunting sea otters for the Russians. There were fights—like when the Tlingit destroyed trade posts in 1802—but the Russians fought back and won with help from some native allies.

Why Russia Said "Bye" to Alaska

So what happened? Why did Russia suddenly want out?

First reason: money. After losing the Crimean War (1853–1856), Russia was broke. Their army was weak, their economy struggling, and their tech was behind. They needed serious cash to rebuild, and Alaska wasn’t bringing in much anymore. Why? Because they overhunted the otters. No otters, no money.

Second reason: location, location, location. Alaska was over 6,500 km from Moscow, separated by the icy Bering Sea. Totally isolated and impossible to defend. Britain (which ruled Canada at the time) was seen as a big threat. If war broke out, Russia figured they’d lose Alaska anyway.

The $7.2 Million Deal of the Century

Russia had offered Alaska to the U.S. earlier, but the American Civil War got in the way. After the war ended in 1865, the talks restarted—this time with real interest. On March 30, 1867, a deal was struck: America would buy Alaska for just $7.2 million.

Sounds like a steal? Because it was! That’s less than 5 bucks per square kilometer. Adjusted for today’s money, it’s around $130 million—still insanely cheap. Alaska is almost 2.5 times bigger than Texas. Can you imagine?

The Big Transfer & America's Reaction

The transfer went down on October 18, 1867, in Sitka. Russia lowered its flag, America raised theirs. That day is still celebrated in Alaska as "Alaska Day."

At the time, many people mocked the deal. They called it “Seward’s Folly” and “Seward’s Icebox,” thinking it was a frozen wasteland. Some even thought it was a waste of taxpayers' money. But oh boy, they were in for a surprise...

Alaska’s Glow-Up: From Icebox to Gold Mine

It didn’t take long for the U.S. to start cashing in. First came the seal trade—profitable enough to cover the purchase by 1890. Then came the gold rush in 1896. Gold was literally in the beach sand near Nome! Suddenly, Alaska wasn't a joke anymore—it was a jackpot.

Later came oil, natural gas, and tons of other resources. Alaska became crucial for the military, too, especially during the Cold War because of its location near Russia.

On January 3, 1959, Alaska officially became the 49th U.S. state. Today, it’s home to about 730,000 people, has a $60 billion GDP, and leads in oil, seafood, and tourism. Not bad for a place people once thought was worthless!

What If Russia Never Sold Alaska?

Imagine this: Russia still owns Alaska. Would Canada have taken it in a war? Would it be part of Canada today? What if the USSR had nukes stationed there during the Cold War? How would World War II have played out in the Pacific?

So many what-ifs. But here’s the thing—at the time, Russia really didn’t have a better option. They couldn’t afford it. They couldn’t defend it. And they didn’t know what was hiding under all that snow and ice.

Still… ouch. Looking back, it’s one of history’s biggest real estate regrets—and one of America’s greatest deals ever.

Key Dates:

• March 30, 1867 – Treaty signed
• October 18, 1867 – Transfer day (Alaska Day)
• January 3, 1959 – Alaska becomes a state