On October 18, 1867, American troops raised their flag over a Russian fort at Sitka after Washington paid $7.2 million for land twice the size of Texas; newspapers had already started calling the deal a swindle.

Secretary of State William H. Seward spent the spring of 1867 negotiating the largest land purchase in American history. What he did not spend much time on, it turned out, was convincing anyone else it was a good idea.

What did seven million dollars actually buy?

Russia's minister in Washington, Eduard de Stoeckl, and Seward settled on $7.2 million in gold for roughly 586,000 square miles of North American coastline and interior, according to the National Archives' account of the negotiation. That works out to just under two cents an acre: less than a single city lot cost at the time. Stoeckl had opened with a lower figure; Seward's eagerness to close the deal before Congress adjourned for the year reportedly pushed the price up by two million dollars over a few days of bargaining.

The Senate ratified the treaty by a vote of 37 to 2 on April 9, only ten days after it was signed. Getting the money out of the House took considerably longer.

What went wrong at the flag-raising?

The formal handover happened six months after that, on October 18, at Castle Hill in Sitka, capital of the territory Russians called Russian America. Two American generals, Jefferson C. Davis and Lovell Rousseau, marched roughly 250 troops up the hill. On the Russian side, Governor Prince Dmitri Maksutov and Captain Alexei Pestchouroff stood with about a hundred soldiers of their own, according to the archive kept by LitSite Alaska. Pestchouroff read out the transfer, declaring that he acted "by authority from his Majesty the Emperor of Russia."

Then the ceremony went sideways. The Russian-American Company's double-headed eagle flag snagged on its own halyard partway down the pole. A soldier had to climb up and cut it loose, and it fell onto the bayonets of the men standing below. Several Alaska historical accounts, LitSite Alaska's among them, report that the sight was too much for Princess Maksutov, the governor's wife, who fainted where she stood. Wikipedia's own summary of the day omits her collapse entirely: a reminder that even a widely repeated detail from 1867 survives on secondhand testimony, not a signed affidavit.

Both versions agree on what came next: cannon fire from the USS Ossipee, answered by Russian shore batteries, and General Rousseau trying (without success) to keep his own troops from cheering in front of soldiers who had just lowered their flag for the last time.

Was it really "Seward's Folly"?

Not at the time, mostly. The phrase now welded to every retelling of the purchase was barely used in 1867 at all. A History.com survey of the period's newspapers found that most of them actually backed the deal; the loudest objectors were a faction of Radical Republicans who reached for names like "Walrussia," "Johnson's Polar Bear Garden," and "Russian Fairy Land" rather than anything involving Seward by name. Horace Greeley's New York Tribune was the most prominent holdout, arguing the territory was mostly a burden "not worth taking as a gift."

"Seward's Folly" caught on later, and it caught on hard. Textbook after textbook repeats it into the twenty-first century, each one apparently copying the last rather than checking the newspapers.

Why did Congress sit on the bill for a year?

Signing a treaty and paying for it were, in practice, two different problems. The House did not vote to appropriate the $7.2 million until July 1868, and only after Stoeckl (by his own later admission, and a subsequent congressional inquiry) spread something close to $200,000 around Washington in payments to lobbyists and newspaper editors, including at least one former cabinet officer working the vote. The investigation that followed called its own findings inconclusive and closed without punishing anyone.

The bill finally passed, 113 to 43, with 44 members declining to vote at all.

How did a punchline become a resource?

For three decades, Alaska mostly justified the skeptics: a sparse population and brutal winters, with no obvious return on the investment yet in sight. The 1896 gold strike at Bonanza Creek in Canada's Yukon changed that arithmetic, according to Wikipedia's account of the Klondike Gold Rush, by sending tens of thousands of prospectors north through the Alaskan ports of Dyea and Skagway. By 1899 gold had turned up on Alaskan ground itself, around Nome, and the territory stopped being merely a route to someone else's riches.

The twentieth century kept adding reasons. Japanese forces occupied two islands in the Aleutian chain in 1942, the only time enemy troops held American soil during the Second World War, and retaking them the following year became the only land battle of that war fought on US territory. Oil discovered at Prudhoe Bay in 1968 turned the state, admitted to the union in 1959, into one of the country's largest producers of it. Every one of those facts would have sounded absurd to a senator voting on frozen wasteland in 1867.

What Alaska Day looks like now

Sitka still marks October 18 with a parade and a costumed reenactment of the flag exchange, and the state has treated the date as a holiday for its employees since the territorial legislature made it official in 1917. Not everyone in Alaska marks it the same way. Some Alaska Native communities have pushed to rename the day "Reconciliation Day" (Wikipedia's page on Alaska Day records the campaign), pointing out that the ceremony on Castle Hill changed which distant government claimed the land, not whether the Tlingit and other peoples living on it had ever agreed to give it up.

Seward did not live to see gold or oil vindicate the purchase, and statehood was decades further off still; he died in 1872, before the first big Klondike claim was even staked. What he did buy, whether Congress understood it yet or not, was a border across the Bering Strait from Russia. As Arctic ice retreats and new shipping lanes open along that same stretch of water, the argument over what that land is worth is, if anything, only getting started.

Sources

• National Archives, Prologue Magazine, "Seward's Bargain: The Alaska Purchase from Russia" (1994)
• Wikipedia, "Alaska Day"
• Wikipedia, "Klondike Gold Rush"
• History.com, "Why the Purchase of Alaska Was Far From 'Folly'"
• LitSite Alaska, "Alaska Transfer Ceremony," Making of Alaska digital archive