We Officially Bought Alaska 159 Years Ago

It's Saturday, June twentieth. On this day in 1867, President Andrew Johnson announced that the United States had purchased Alaska from Russia for $7.2 million. That's about two cents an acre. And the country absolutely roasted him for it. Newspapers called it "Seward's Folly" after Secretary of State William Seward, the guy who negotiated the deal. They called it "Seward's Icebox." They called it "Walrussia." They called it "Johnson's Polar Bear Garden." Congress almost refused to approve the payment. The general consensus was that America had just blown millions of dollars on a frozen wasteland that would never be worth anything. That frozen wasteland turned out to contain one of the largest oil fields in North America, billions of dollars in gold, the most productive fisheries in the world, and some of the most strategically important military real estate on the planet. The worst deal in American history became arguably the best one, and the story of how that happened says something about how terrible humans are at recognizing value when it doesn't look like what they expect. Russia didn't sell Alaska because they thought it was worthless. They sold it because they couldn't afford to keep it.

By the 1860s, the Russian Empire was financially strained after losing the Crimean War and struggling to manage territories that were thousands of miles from Moscow. Alaska was expensive to maintain, difficult to defend, and increasingly vulnerable to British expansion from neighboring Canada. Russia's ambassador to the US, Eduard de Stoeckl (duh SHTEH-kul), was authorized to approach Secretary of State William Seward about a sale. Seward, who was a relentless expansionist who believed America's future depended on controlling as much of the Pacific coast as possible, jumped at the opportunity.

The two men negotiated through the night on March 30, 1867. The treaty was signed at 4 AM. The price: $7.2 million in gold for 586,000 square miles of territory. In today's dollars, that's roughly $158 million, which is less than the cost of a single F-35 fighter jet. The Senate ratified the treaty two weeks later with a vote of 37 to 2, largely because of a three-hour speech by Senator Charles Sumner arguing for Alaska's strategic and resource potential. But the House, which had to approve the funding, dragged its feet for over a year before finally releasing the money. The formal transfer ceremony happened in October 1867 in Sitka, where Russian and American flags were exchanged and the indigenous Tlingit (KLINK-it) population watched a foreign power sell their homeland to another foreign power without anyone asking their opinion.

The public reaction was savage. Horace Greeley's New York Tribune called Alaska "an inhospitable, wretched, God-forsaken region" worth "nothing but to breed seals and Eskimos." Other papers ran cartoons showing Seward dragging home a giant block of ice. For the next thirty years, Alaska sat mostly ignored, governed loosely by the military and then by a skeletal civil administration. Most Americans forgot about it entirely. And then they found gold.

The Klondike Gold Rush of 1896 to 1899 sent tens of thousands of prospectors flooding through Alaskan ports on their way to the Yukon. The rush itself was mostly in neighboring Canadian territory, but Alaska was the gateway, and the economic activity it generated transformed the territory from a punchline into a destination. Towns sprang up overnight. Shipping routes were established. For the first time, Americans started paying attention to what was actually up there.

But gold was just the start. In 1968, oil was discovered at Prudhoe Bay on Alaska's North Slope, one of the largest oil fields ever found in North America. The Trans-Alaska Pipeline, an 800-mile engineering marvel built through permafrost, mountains, and earthquake zones, began pumping crude in 1977. Since then, Prudhoe Bay alone has produced over seventeen billion barrels of oil, generating hundreds of billions of dollars in revenue. Alaska currently accounts for roughly ten to fifteen percent of total US oil production.

The state used that oil money to create something that most Americans don't know about: the Alaska Permanent Fund. Established in 1976, the fund invests a portion of oil royalties and has grown to roughly eighty billion dollars. Every year, every Alaska resident receives a dividend check from the fund, typically around a thousand to two thousand dollars. It's essentially a state-level universal basic income funded by oil. The frozen wasteland that nobody wanted is writing checks to its residents from money generated by resources that were sitting under the ice the entire time Horace Greeley was calling it God-forsaken.

And then there's the military value, which Seward saw but couldn't fully articulate in 1867. Alaska sits at the top of the Pacific, closer to Russia, China, and North Korea than any other US state. During World War II, Japan actually invaded the Aleutian Islands (ah-LOO-shun), making Alaska the only US state where ground combat against a foreign army took place during the war. During the Cold War, Alaska became the first line of missile detection and air defense against the Soviet Union. Today, Fort Greely in Alaska houses the Ground-Based Midcourse Defense system, America's primary defense against intercontinental ballistic missiles. Two cents an acre bought a nuclear shield. Alaska wasn't even the best deal America ever made. It's the second best.

The Louisiana Purchase in 1803 is still the gold standard. Thomas Jefferson bought 827,000 square miles from Napoleon for $15 million, roughly four cents an acre. The purchase doubled the size of the United States overnight and included all or part of fifteen current states, from Louisiana to Montana. Napoleon sold it because he needed cash to fund his wars in Europe and had just lost control of Haiti, which made his plans for a North American empire pointless. Jefferson's critics said he was a hypocrite for stretching executive power to make the deal, since the Constitution didn't explicitly give the president the authority to buy foreign territory. Jefferson agreed with the criticism and did it anyway.

The US also bought the Virgin Islands from Denmark in 1917 for $25 million during World War I, primarily to prevent Germany from using them as a submarine base. And in 1898, the US effectively acquired Puerto Rico, Guam, and the Philippines from Spain after winning the Spanish-American War, paying $20 million for the Philippines alone.

The pattern across all of these acquisitions is consistent: every single one was controversial at the time, and every single one looks like a bargain in retrospect. The people making the deals saw value that the public couldn't, because the public was evaluating the land based on what it looked like right now rather than what it might become.

Which brings us to Greenland. Trump has been pushing to acquire it since 2019, and his interest intensified in 2025 and 2026. Greenland is estimated to hold the world's second-largest reserve of rare earth minerals after China, and with China controlling sixty nine percent of global rare earth production, an alternative source would be strategically valuable. The island also sits along critical Arctic shipping lanes that are opening up as ice melts. White House estimates put the cost of acquiring Greenland at around $700 billion, which makes Seward's $7.2 million look quaint.

But economists and Arctic specialists have pushed back hard. The minerals exist but are prohibitively expensive to extract in Greenland's terrain and climate. The infrastructure doesn't exist. The population of 56,000, mostly indigenous Inuit, has no interest in becoming American. And the US already has military access through the Thule Air Base, which has been operating in Greenland since 1951. One analyst at the Center for Strategic and International Studies said bluntly: "The business case is non-existent."

Maybe he's right. Or maybe he's Horace Greeley calling Alaska a God-forsaken wasteland in 1867. The uncomfortable truth about territorial acquisitions is that the people who evaluate them at the time are almost always wrong, because they're pricing current value, not future potential. That's true for land, for stocks, and for anything else where the payoff takes decades to materialize. The best deals in history looked terrible on the day they were signed. The worst deals often looked great. And nobody knows which category Greenland falls into until long after the people arguing about it are gone. So if this comes up in conversation, here's how to think about it. On this day in 1867, the US bought Alaska from Russia for $7.2 million, about two cents an acre. The country called it Seward's Folly, Seward's Icebox, and Walrussia. Congress almost didn't pay for it. The frozen wasteland they mocked turned out to contain one of the largest oil fields in North America, billions in gold, the world's most productive fisheries, and the US military's primary missile defense installation. The state now has an eighty-billion-dollar fund that pays every resident a dividend check from oil money. The Louisiana Purchase was even cheaper at four cents an acre and doubled the size of the country. Every major US territorial acquisition was controversial when it happened and looks like a steal in retrospect. Trump wants to buy Greenland for an estimated $700 billion. Experts say the business case doesn't work. They said the same thing about a frozen territory in 1867 that's now writing checks to its residents from oil money nobody knew was there. The best deals in history always looked terrible on the day they were signed.

Stay informed, stay curious, and we'll see you Monday.