William Seward bought Alaska for about two cents an acre and got mocked

Let me offer you a deal. For one dollar, I will sell you fifty-two acres of land. Not fifty-two square feet. Fifty-two acres, which is roughly thirty-nine football fields, end zones included (a field with end zones is about 1.32 acres, and 52 divided by 1.32 is a little under 40). Most people would say there must be a catch, and in the spring of 1867 a good many Americans said exactly that about the largest bargain Washington ever signed. The catch, they said, was that the land was a frozen waste where nothing grew and nobody wanted to live.

They had a nickname for the man who made the deal. They called him a fool, and they called the land his icebox. The man was William Henry Seward, Secretary of State, Republican, and in his own mind the architect of an American future that stretched from ocean to ocean and north to the Arctic. Let me tell you how the folly became a fortune, because the numbers do not lie and the critics do not come out of it well.

The man and the moment

Seward was one of the most prominent Republicans in the country. He had been governor of New York and a United States senator, and in 1860 he arrived at the Republican convention in Chicago as the favorite for the presidential nomination. He lost it to Abraham Lincoln on the third ballot, a story we tell in Three Ballots in the Wigwam and How Lincoln Beat the Favorite in 1860. Lincoln then did something that tells you a lot about Lincoln: he named his chief rival Secretary of State, and Seward served him loyally through the war.

On the night of April 14, 1865, the same night John Wilkes Booth shot Lincoln, a conspirator named Lewis Powell forced his way into Seward's house in Washington and attacked him in his bed. Seward was already laid up, recovering from a carriage accident that had injured his jaw and arm. He was stabbed repeatedly, and several members of his household were wounded trying to protect him. He survived. Hold that in your mind for a moment. A man who nearly died in a bed in Washington in 1865 was back at his desk, negotiating one of the great real estate transactions in the world, two years later.

Lincoln was dead, and Andrew Johnson, a Democrat who had run on the wartime National Union ticket, was now President. Johnson was at war with the Republican Congress, which impeached him in 1868 (the story is in Johnson's Vetoes, the Overrides and the Impeachment That Fell One Vote Short). Seward stayed in the cabinet anyway, and in that poisonous atmosphere he got a treaty through the Senate. That is not nothing. It tells you something about how persuasive the argument was and how steady the man was.

Why Russia wanted to sell

Russian America, as the territory was known, had been run by a chartered trading company built around the fur trade, especially sea otter pelts. By the 1850s the fur business was in decline. The settlements were thin and far from St. Petersburg. And Russia had come out of the Crimean War of the 1850s with a sober sense that it could not defend a distant colony against the British Navy, whose Canadian possessions bordered the territory. If war came, Britain could take Alaska for nothing. Better to sell it to a friendly power than to lose it.

Russia's minister in Washington, Eduard de Stoeckl, carried the negotiations on the Russian side. The Americans had a friendly relationship with Russia that dated back to the Civil War years, when the Russian government had shown goodwill toward the Union. Seward and Stoeckl reached agreement in a late-night session, and the treaty was signed in the early hours of March 30, 1867.

The price and the arithmetic

The purchase price was $7.2 million. The territory covered about 586,412 square miles. A square mile contains 640 acres, so here is the arithmetic, line by line:

1. 586,412 square miles times 640 acres per square mile is 375,303,680 acres.
2. $7,200,000 divided by 375,303,680 acres is about $0.0192 per acre.
3. That is about 1.9 cents an acre, which rounds up to the "two cents" of the legend.
4. Turn it around: one dollar buys 1 divided by 0.0192, or roughly 52 acres.

Now compare it with the other great bargain in the national story. The Louisiana Purchase of 1803 cost $15 million for roughly 828,000 square miles. Multiply 828,000 by 640 and you get about 529,920,000 acres. Divide $15 million by that and you get about 2.8 cents an acre. So Alaska was cheaper per acre than the Louisiana Purchase, and Jefferson is remembered as a genius for his deal. (The Louisiana figures are the standard ones; check a good reference for the exact square mileage, since the boundaries of that territory were not settled in 1803 and estimates vary slightly.)

The total was a lot of money in 1867, but it was not a staggering sum for a national government that had just finished spending its way through a four-year civil war. The cost of the Alaska purchase was a rounding error beside the war debt.

The Senate and the critics

The Senate took up the treaty quickly, and it approved it on April 9, 1867, by a vote of 37 to 2. That tells you the opposition was louder in the newspapers than in the chamber. The leading advocate in the Senate was Charles Sumner of Massachusetts, a Republican, chairman of the Foreign Relations Committee, who gave a long speech laying out the geography, the resources and the strategic logic of the place. Sumner was not a man who gave away his praise; when he was for something, he made the case thoroughly.

Outside the Senate, the newspapers had a field day. Critics coined the names that have lasted: "Seward's Folly," "Seward's Icebox," and "Johnson's Polar Bear Garden." The charge was that the government had paid millions of dollars for a wilderness of ice, seals and walruses, and that the Treasury had been fleeced. Some of the criticism was partisan, aimed at President Johnson, who was already unpopular with Republicans. Some of it was the ordinary skepticism of people who had never seen the place. Some of it was a perfectly reasonable question about whether a country with a Reconstruction to run, a postwar economy to manage and the former Confederacy to bring back should be buying land in the Arctic.

Let me give that last objection its full weight, because it is the strongest one. The objection was this: the nation had pressing business at home. Four million freed people needed their rights protected. The South was in ruins. The currency was unsettled. Why spend the Treasury's attention, and $7.2 million of its money, on an icebox?

Here is the answer, in plain points.

1. The price was small beside the nation's budget and enormous beside the land. At under two cents an acre, almost any use of the land would repay the cost.
2. The land was not going to get cheaper. Russia was willing to sell now. If the United States passed, Britain might be offered the chance, and an unfriendly power on the northwest flank of the continent would have been a permanent problem.
3. Opportunities of this kind are rare, and they do not wait for a convenient moment. The country that waits until its desk is clear never buys anything.
4. Seward's reasoning was strategic, not sentimental. He wanted American influence across the Pacific, and a coastline stretching toward Asia was part of that plan.

Notice also that the Treaty was only half of the process. The Senate consented to the treaty, but the money still had to be appropriated, and that required the House. The House did not act until 1868, after a debate that included accusations that lobbyists had greased the wheels. Congress, in other words, took the matter seriously, and the funding vote was not a rubber stamp. That is how the Constitution is supposed to work: the Senate for treaties, both chambers for money.

October 18, 1867: the flag comes down

The formal transfer took place at Sitka on October 18, 1867. Russian and American soldiers stood on the parade ground. The Russian flag came down, the Stars and Stripes went up, and the territory belonged to the United States. The date is still observed in Alaska as Alaska Day.

Then the territory sat there for a while. Washington did not know what to do with it. For years it was run by the Army and then the Treasury and then the Navy, in a loose and neglected way. A real civil government did not arrive for decades. Alaska became a district in 1884, a territory in 1912, and a state on January 3, 1959, the 49th. That is a long time in limbo for a place that turned out to be rich.

What was in the ground

The critics were wrong about what the land held, and the proof arrived within a generation.

• Fish and furs. The salmon fisheries of Alaska became an industry of national importance, and the seal and sea otter trade continued for a time.
• Gold. Gold was found near Juneau in 1880. The great Klondike rush of the late 1890s was across the border in Canada's Yukon, but many of the prospectors came through Alaskan ports, and the strikes at Nome around 1899 brought a new rush on American soil.
• Oil. In 1968 a huge oil field was found at Prudhoe Bay on the North Slope. The Trans-Alaska Pipeline, completed in 1977, began carrying that oil to the ice-free port of Valdez.
• Defense. In World War II the Japanese occupied two of the Aleutian Islands, Attu and Kiska, in 1942, and the United States fought to retake them. Alaska was no icebox. It was the front yard of the Pacific. Later, in the Cold War, Alaska sat on the shortest air route between the Soviet Union and North America.

No honest person can say that a purchase which delivered all of that, for 1.9 cents an acre, was a folly. But I want to add a fair warning, because I do not want to turn Seward into a saint or the lesson into a cliché. The arithmetic of an acre is not the arithmetic of a return on investment. The land was bought in 1867, and the big payoffs arrived in the 1880s, the 1890s, the 1940s, the 1960s and the 1970s. A purchase can be a good one for a country that thinks in generations and a bad one for a politician who thinks in election cycles. Which brings us to the real lesson.

Seward's other ideas, and the question of Greenland

Seward did not stop at Alaska. His State Department looked at buying the Danish West Indies, and it explored the idea of acquiring Greenland and Iceland, commissioning a study of the matter in 1868. Neither idea went through. The Senate did not ratify the Danish West Indies treaty of that era, and the United States did eventually buy those islands, now the Virgin Islands, from Denmark in 1917.

I mention this because the question of whether and how America should secure its northern and southern approaches keeps coming back, in every generation. Our Greenland and Panama coverage on this site takes up that long argument. The Panama Canal story is told in The Panama Canal From Teddy Roosevelt to the Treaties Fight of 1978, and the doctrine behind the American interest in the hemisphere is explained in What the Monroe Doctrine Actually Said and Why It Still Matters. What Seward teaches is not "buy everything." He teaches the right questions: What is the price per unit of value? Who else would buy it? What does the country do with it once it owns it? And what do the opponents' strongest arguments get right?

A conservative has reasons to be careful with the idea of expansion. The Constitution gives the treaty power to the President with the advice and consent of two-thirds of the Senate, and it gives the money power to Congress. Those checks worked in 1867. A deal that has to survive both of them is more likely to be a good one.

The bottom line

• The price was $7.2 million for 586,412 square miles, which is 375,303,680 acres and about 1.9 cents an acre. A dollar bought roughly 52 acres, and the Louisiana Purchase, at about 2.8 cents, cost more per acre.
• The Senate approved the treaty on April 9, 1867, by 37 to 2. The House had to fund it, which it did in 1868. That is the Constitution doing its job on a big decision.
• The critics who coined "Seward's Folly" were not stupid. They had real reasons to worry about the nation's priorities, and the right response is to weigh the price against the value, not to sneer at them. But they were wrong about what the land held.
• When someone tells you a long-term asset is a waste because it does not pay this year, ask what is in the ground. That goes for land, for a skills program and for a family business.
• Read the treaty and the history yourself. The text of the 1867 treaty and the Senate's record are public, and they take an hour to read.