Seward’s Pricey Icebox
WHY YOU SHOULD CARE
Because a territory twice the size of Texas doesn’t come with a return policy.
Sarah Palin may never have said that she could see Russia from her house, but she did have difficulty articulating Alaska’s strategic importance during the 2008 U.S. presidential campaign, including why being able to see Russia “from an island in Alaska” would matter that much when “Putin rears his head.”
Palin, however, was not the first American leader to struggle with the question of Alaska’s broader relevancy. William H. Seward, the American secretary of state who negotiated the purchase of the territory from Russia in 1867, was broadly lambasted in the press for his acquisition of the remote “icebox.” And the wisdom of “Seward’s Folly,” as the purchase of Alaska became known, remains a point of contentious debate.
Enter America, a Britain-loathing nation nearly the size of a continent with a large pocketbook and a somewhat inexplicable sense of “manifest destiny.”
Starting with the reign of Peter the Great in the 18th century, Russia devoted considerable time and resources to the sparsely inhabited Alaskan territory, attempting to harvest its vast wealth of natural resources, from otter furs and walrus ivory to mineral deposits. But the remote area was difficult to finance and administer, and as the country’s defeat in the Crimean War of the 1850s showed, it was a land that would be impossible to defend should archenemy Great Britain take an interest in it. So around 1859, Czar Alexander II started to shop for an unassuming buyer, preferably one that would act as a formidable buffer against the imperial Brits.
Enter America, a Britain-loathing nation nearly the size of a continent with a large pocketbook and a somewhat inexplicable sense of “manifest destiny.” But the U.S. Civil War would delay the sale until 1867, when Secretary of State Seward negotiated the purchase of the vast territory — roughly twice the size of Texas — for $7.2 million in gold, or approximately 1.7 cents per acre.
Seward, a former New York governor, U.S. senator and Abraham Lincoln rival-turned-confidant who had been savagely beaten by Confederate thugs the night Lincoln was assassinated, was no idiot. But with American funds depleted after the war, a massive public debate on the wisdom of buying the remote territory, referred to as “Seward’s icebox” and President Andrew Johnson’s “polar bear garden,” ensued. “Cash! Cash! Cash! Cash paid for cast-off territory. Best price given for old colonies, North and South,” the New York Herald Tribune mocked. “Any impoverished monarchs retiring from the colonization business may find a good purchaser by addressing W.H.S., Post Office, Washington, D.C.”
But in 1896, a quarter of a century after Seward’s death, a major gold deposit was discovered in the Klondike region of the Yukon and the Alaskan gold rush erupted, followed several decades later by the discovery of oil. Alaska’s strategic importance — as the Cold War blossomed and relations with Russia chilled — would also become apparent, and it would finally become a state in 1959. So, no folly. Case closed. Posthumous vindication for the maligned Seward, right?
Not so fast, says David Barker, an economist at the University of Iowa. In a detailed 2009 paper, Barker argues that from a “purely financial analysis of the transaction,” the purchase of Alaska — much like the state’s proposed $400 million “Bridge to Nowhere” — was a prime example of wasteful federal spending. Not only is Alaska relatively expensive to govern and maintain (as Russia learned), but the vast majority of the returns from its oil, gold and other commodities have accrued to private hands, not the U.S. treasury, making the initial $7.2 million outlay ($16.5 billion in 2007 dollars, according to Barker’s estimate, once the figure is adjusted for inflation and the size of the national economy) a rather poor investment for the U.S. as a whole.
Of course, under such a narrow analysis of the federal balance sheet, as Barker’s critics have been quick to point out, many other states would fair as poorly. And doesn’t it count for something that it was Americans, and not Russians, who were being employed and enriched by the state’s largesse? Just ask the Russians, many of whom in the wake of recent U.S.-led sanctions have facetiously suggested that Russia retake its lost jewel, including petitions to the White House for Alaska’s return and photo-shopped images of penguins on social media holding protest signs reading “Crimea is ours” and “Alaska is next!”
Penguins may not be native to Alaska, but when it comes to the perceived value of the state today, it is getting increasingly difficult, as Palin might say, to refudiate Seward’s big purchase.