In 1867 the United States completed one of its most consequential land deals, acquiring the massive expanse of Russian America—today’s Alaska—for $7.2 million (about 2 cents per acre). While the purchase was initially mocked as “Seward’s Folly,” the acquisition reshaped America’s geography, economy, and global standing. This post explores the exact price, the political backdrop, and the legacy that still influences the U.S. today.
The Negotiated Price: $7.2 Million
The treaty signed on March 30, 1867, set the purchase price at $7.2 million, equivalent to roughly $140 million in 2024 dollars when adjusted for inflation. The amount broke down as follows:
| Component | Amount (1867) | Modern Equivalent* |
|---|---|---|
| Purchase price | $7,200,000 | $140,000,000 |
| Per‑acre cost | $0.02 | $0.39 |
| Total acreage | 586,412 sq mi (≈ 375 million acres) | — |
\*Based on the U.S. Bureau of Labor Statistics CPI calculator (2024).
The price was deliberately low to entice the United States, which Russia hoped would create a buffer against British Canada and prevent a possible future conflict.
Why Russia Sold
- Financial Strain – The Crimean War (1853‑1856) left Russia financially exhausted. Maintaining distant colonies like Alaska became a costly burden.
- Strategic Concerns – With Britain expanding its influence in the Pacific, Russia feared losing Alaska without compensation in a future war.
- Economic Shift – The fur trade, Alaska’s primary revenue source, was in decline due to over‑hunting and competition from American traders.
These factors pushed Russian Foreign Minister Alexander Gorchakov to accept the modest offer, even though many in St. Petersburg viewed the sale as a humiliation.
American Opposition: “Seward’s Folly”
Secretary of State William H. Seward championed the purchase, arguing it would secure natural resources and expand American influence. Yet, many Americans—especially in the East—ridiculed the deal:
- Political cartoons depicted the United States as a child buying a “frozen wasteland.”
- Congressional debates highlighted concerns about the cost, distance, and the perceived lack of immediate value.
Despite the backlash, the Senate ratified the treaty on April 9, 1867, with a 37‑2 vote, reflecting strong political support for expansionist policies.
Immediate Impact: From Transfer to Territory
The formal transfer ceremony took place on October 18, 1867, in Sitka, Alaska’s capital at the time. The event, now celebrated as Alaska Day, featured:
- The lowering of the Russian flag and the raising of the American flag.
- A ceremonial payment of $4,000 in gold coins to the Russian consul.
Following the transfer, Alaska remained a military district until 1884, when it became the District of Alaska, and later the Territory of Alaska in 1912. Statehood arrived on January 3, 1959.
Long‑Term Benefits: Resources, Strategic Value, and Identity
Natural Resources
- Oil & Gas – The 1968 discovery of the Prudhoe Bay field turned Alaska into a major energy supplier, generating billions in revenue.
- Minerals – Gold, copper, and rare earth elements have fueled mining booms, especially in the 20th century.
Strategic Position
- Military – During World War II and the Cold War, Alaska’s proximity to Russia made it a critical defense outpost, hosting bases like Elmendorf and Eielson.
- Maritime Routes – The Arctic Northwest Passage, increasingly navigable due to climate change, positions Alaska as a future trade hub.
Cultural Identity
Alaska’s unique wildlife, indigenous cultures, and rugged landscapes have become iconic symbols of American adventure, tourism, and environmental stewardship.
Frequently Asked Questions
Q: How does the $7.2 million price compare to other U.S. land acquisitions?
A: The Louisiana Purchase (1803) cost $15 million for 828,000 sq mi, while the Gadsden Purchase (1854) was $10 million for 29,670 sq mi. Alaska’s per‑acre cost remains the lowest of any major U.S. acquisition.
Q: Did the U.S. ever regret the purchase?
A: Early critics called it a folly, but the discovery of abundant resources and strategic advantages has erased most regrets.
Q: What would the purchase be worth today?
A: Adjusted for inflation, roughly $140 million; however, considering the value of extracted oil, gas, and minerals, estimates exceed $1 trillion.
The 1867 Alaska purchase, priced at $7.2 million, was a modest transaction that unlocked a treasure trove of resources, strategic depth, and cultural richness for the United States. From the initial skepticism of “Seward’s Folly” to the modern reality of a state that fuels energy markets and protects national security, the deal illustrates how a seemingly small price can yield monumental returns.