What’s the craziest thing you’ve seen being sold?
A ghost in a jar?
Britney Spears’ bubble gum?
Ad space on a forehead?
Today we’ll talk about the sale of Alaska and what caused Russia to sell it for barely 2 cents an acre.
Alaska in the 19th century was a good place to be in. Even though there were unfavourable climate conditions, trade was booming. Merchants traded in Chinese fabrics, ice, otter fur, ivory and even ice. What’s more, people even knew about the numerous gold deposits in the area.
All this trading was done and managed by the Russian-American Company popularly known as the RAC. When Alexander Baranov the much-loved leader of the RAC and a skilled merchant who gave the company a 1000% profit retired, the decline of RAC and of Alaska began.
The officers who came after Baranov were corrupt and selfish. They kept astronomically high salaries for themselves and exploited the local populace. For example, they bought fur from the people at half the price and sold it at huge margins. So, the general public who initially killed, say five otters to sustain now had to kill 10. Over the next twenty years, people killed almost all the sea otters, depriving Alaska of its most profitable trade.
Apart from the economic problems, there was political upheaval as well. The natives who were suffering at the hands of the RAC constantly staged protests and uprisings which were often ruthlessly crushed by firing on villages by the Russians.
Then in October 1853, the Crimean war broke out and all went to hell.
Quick side note, the Crimean war took place because Russia was expanding into the Danube region, present-day Romania which was under Turkish control. Then Britain and France got involved because they feared that Russia would continue this expansionist agenda and soon take over profitable British colonies like India. Apart from this, there were religious agendas as well. Russia made an issue of the fact that the holiest sites in Christianity – Jerusalem, Bethlehem etc. – were under Turkish (A Muslim state) control.
So Turkey, Britain and France stood against Russia. And Russia had nothing to defend Alaska with because the sea routes were controlled by the enemy’s ships. There was a fear that the British might block Alaska, and then Russia would be left with nothing.
During this period Russian-American relations were stronger than ever. Both sides saw an advantage in Alaska. Russia would get rid of a troubled piece of land and America would get a bite out of the resource-rich nation. So negotiations began.
But the general public was going crazy. Each side thought that what the government is doing is complete madness.
“How can we give away land that we have put so much effort and time into developing, the land where the telegraph has arrived and where gold mines have been found?” the Russian newspapers wrote.
But the American press was of a different view –
“Why does America need this ‘icebox’ and 50,000 wild Eskimos who drink fish oil for breakfast?”
But even after all this, the sale was finalized for about $7.2 million or about 2 cents an acre. Even unproductive land in Siberia was approximately 1400 times more expensive. But Russia could risk nothing in the middle of a war and every single penny mattered.
A short time passed, and gold started flowing from the “icebox”: The Klondike gold rush started in Alaska, bringing the States hundreds of millions of dollars. Of course, it was insulting. But it is impossible to know how relations between the world’s largest powers would have developed if Russia had not escaped in time from the problematic and unprofitable region.
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