Alaska, one of the most remote and strategically important states of the United States, has suddenly become the focus of global headlines. On August 15, US President Donald Trump is scheduled to meet Russian
President Vladimir Putin here in a bid to negotiate an end to the ongoing war in Ukraine. The meeting location is symbolic as Alaska has a history deeply intertwined with Russia, having once been part of its territory.
Nearly two centuries ago, Russia controlled this vast expanse of land, but the harsh climate, administrative challenges, and post-war financial troubles made it increasingly difficult to maintain. Facing mounting costs after the Crimean War (1853–1856), Russia decided to sell Alaska to the United States for a sum that today sounds astonishingly small, roughly Rs 63 crores in current value.
The 1867 ‘Alaska Purchase’
The landmark transaction, known historically as the ‘Alaska Purchase’ or ‘Seward’s Folly’, was finalised on March 30, 1867. At the time, US Secretary of State William H Seward negotiated directly with Russian officials, agreeing to buy Alaska for $7.2 million, about two cents per acre. Skeptics across the US mocked the deal, calling it “Seward’s Folly” or “Seward’s Icebox”, convinced the land was barren and useless. Seward, however, remained confident it would prove both strategically and economically valuable.
Formally transferred to the US on October 18, 1867, a date now marked as ‘Alaska Day’, the territory later revealed abundant reserves of gold, oil, and other resources that transformed America’s wealth and global standing.
Why The Deal Happened
Russia’s decision to sell was shaped by both practical and strategic considerations. Harsh winters and isolation made governance difficult, while financial pressures pushed Russia toward a permanent sale. The arrangement was legal, binding, and designed to prevent future disputes, something that has held true even during Cold War tensions and into the modern day.
After the Soviet Union dissolved in 1991, Russia never formally sought to reclaim Alaska. While nationalist slogans like “Alaska is ours” resurfaced briefly in 2014 following the annexation of Crimea, they were largely symbolic gestures without official backing from the Kremlin.
Size And Scale
Alaska spans 1,723,337 square kilometres, making it the largest state in the US, nearly half the size of India and over five times larger than Rajasthan. Its vastness surpasses Rajasthan, Madhya Pradesh, and Uttar Pradesh combined.
Economic And Strategic Goldmine
The true value of Alaska emerged gradually. The Klondike Gold Rush of the 1890s brought thousands of prospectors to its rugged terrain, yielding millions of ounces of gold. Later, the 1968 discovery of massive oil reserves in Prudhoe Bay turned the state into one of the US most important energy hubs, with the Trans-Alaska Pipeline ensuring efficient transport.
Beyond oil and gas, Alaska boasts vast reserves of copper, coal, and zinc, alongside one of the most lucrative fishing industries in the nation, supplying salmon, crab, and other seafood on a massive scale.
Its geographical location, close to Asia and Russia, made it a strategic military asset during World War II and the Cold War. Today, military bases here remain critical to US defence operations in the Pacific.
Tourism also fuels the state’s economy, with glaciers, wildlife, and national parks drawing millions of visitors annually. The Alaska Permanent Fund, established from oil revenues, even pays annual dividends to residents.
A Purchase That Paid Off
Initially dismissed as a folly, the Alaska deal is now regarded as one of the most profitable real estate transactions in US history, a move that not only enriched America but also bolstered its global strategic position.
