Did you know that Alaska was sold by the Russian Empire to the United States of America on March 30th, 1867 for just $7.2 million?
The total area of Alaska was approximately 586,412 square miles, and the selling price was at just about 2 cents per acre. In just 50 years, America managed to earn back the amount over 100 times. After Russia had expressed interest in wanting Alaska back from America, the news filled with much speculation about the Alaskan purchase.
There were rumors that America stole Alaska from Russia. Others claimed the Russians decided to lease the land to America, and they didn’t want to return it. The deal between the two countries was honest, regardless of the widespread rumors. Each side had legitimate reasons to go through with the deal.
Before the Alaska Purchase
Under the Russian Empire in the 19th century, Alaska was the base of international trade. The capital of the state at that time was Novoarkhangelsk (Sitka as it is known now). The merchants in that region primarily traded Chinese tea, fabrics, and ice. The southern United States saw them as a fundamental requirement.
The empire had built factories and ships and was mining coal in the area. In fact, everyone was aware of the large amounts of gold reserves in the region. Not surprisingly, when they heard that Russia was planning to sell their property, they felt it was an act of madness.
It was the Russian Tsars and their families who owned the Russian-American company set up in Alaska. They benefited from the enterprise as they collected large amounts of tax from the company.
The ruler of the Russian settlements in Alaska was a merchant who went by the name Alexander Baranov. He also called himself the “Russian Pizarro“, and was completely obsessed with Alaska.
Baranov set up factories, fortresses, schools and shipyards. Also, he educated the people of Alaska to plant potatoes and Rutabaga and even increased the sea otter trade in the region.
He liked Alaska so much that he married the daughter of an Aleut Chief.
Alexander Baranov managed to successfully increase the company’s profit by over a 1000 percent. However, the empire replaced him with captain-lieutenant Hagemeister when he became too elderly.
When Hagemeister was in charge, he obtained new employees and shareholders from the military. These employees and shareholders quickly benefited from the profitable enterprise. However, their actions ultimately lead to the ruin of the company.
The new owners of the company were obsessed with making more money. Furthermore, they disregarded how it may affect everything else around them. The heads of the company were earning 150,000 rubles a year. This was ten times the amount received by the lower common officers.
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