Seward’s Folly

Seward

Source: Library of Congress

According to the Library of Congress, “On March 30, 1867, the United States reached an agreement to purchase Alaska from Russia for a price of $7.2 million. The Treaty with Russia was negotiated and signed by Secretary of State William Seward and Russian Minister to the United States Edouard de Stoeckl. Critics of the deal to purchase Alaska called it ‘Seward’s Folly’ or ‘Seward’s Icebox.”

One of the benefits of teaching at a liberal arts college like ours is the opportunity to work with undergraduate students on research projects.  Over the past few years, I’ve had two students dig into the “Annual Report of the Commissioner of Navigation” to look at trade flows between the United States and other countries. The data are broken down by commodity and by the port from which shipping originated.

Two years ago, Kathryn Gaydos analyzed exports and imports between the US and China in her honors thesis, “A Lost Opportunity? Trade Between the United States and China, 1865-1914.”  She found that China exported primarily tea and silk to the US while importing cotton textiles and a variety of other commodities.

This year, Anastasiia Okuneva tapped the same source to look at trade between the United States and Russia before 1914. She is able to look at trade between the US and Russia by port, so she can estimate trade flows between the US and Alaska before 1867.  So, what was the US getting when it bought Alaska?  The chart below shows US imports from Alaska for 1860 to 1867:

Alaska trade

Fur, wood products, and wool were the top three imports and the dollar value was only about $200,000 in 1860-1867 dollars.  That isn’t much compared to a purchase price of $7.2 million.  Further, Okuneva finds that even though the fur trade was very important for the Alaskan economy, the number of Russian trading companies in operation shrank from the middle of the 18th century onward due to diminishing animal populations in Alaska and the losses of sailing vessels in Alaska storms. Further, there were virtually no exports from the US to Alaska except for small amounts of provisions.

So, at the time this didn’t look like such a great deal, at least in terms of trade flows.

Things changed 1896, however, with the discovery of gold in the Klondike.  According to Daniel Yergin in The Prize: The Epic Quest for Oil, Money, and Power, “As early as 1923, President Warren Harding had created a naval petroleum reserve on the Arctic coast of Alaska, and wildcatters poked around the region in the years thereafter (p. 569).” And, on December 26, 1967, a drilling team struck oil in Prudhoe Bay.  They’ve been sending oil from Prudhoe Bay to Valdez via pipeline since 1978.

I’m looking forward to Okuneva’s completed paper so I can see what else was going on in terms of trade between Russia and the US.  Now, if I can only get a student to work on the US and Japan…