October 18, 1867, was one of the most significant days in Alaska history, the day when the United States officially took possession of its northernmost territory. The federal government had made the purchase from Russia for $7.2 million, or roughly two cents per acre. U.S. officials had dispatched General Jefferson C. Davis and Brigadier-General Lowell Rousseau to the Russian America capital of New Archangel, now known as Sitka, to begin a period of military oversight after the transfer ceremony.
On the morning of October 18, with the two U.S. generals leading the procession, 250 American troops marched to the site where the transfer would commence -- the Russian Alaska Governor's house, located atop Castle Hill. To the left of the flagpole on the parade grounds, a hundred Russian soldiers stood in formation with Russian Alaska Governor Prince Dimitrii Petrovich Maksutov and Captain Aleksei Pestchouroff.
The ceremony was halted temporarily and emotions ran high when the Russian-American Company's double-eagle flag snagged as it was lowered. Soldiers were directed to climb up the pole and cut it loose. As the flag fluttered down, it landed on the bayonets of the soldiers below, and the overwrought Princess Maksutov fell into a faint. When the ceremony continued, Captain Pestchouroff addressed General Rousseau with these words: ". . . . by authority from his Majesty the Emperor of Russia, I transfer to the United States the Territory of Alaska." Guns fired a belated salute and the U.S. flag was raised in something of an anticlimax. Wishing to protect the sensibilities of the Russian audience, Rousseau attempted to dissuade the American soldiers from launching into three cheers. He was unsuccessful.
The waiting was over. Secretary of State William H. Seward had negotiated the sale and lobbied it through Congress. And Russia was glad to get rid of this "white elephant," an enterprise that had become too costly and difficult to defend. This was a far cry from Russian opinion when Alaska and her assets were first discovered.
It began in 1742, when the crews of Russian exploration ships returned with the most luxurious otter furs ever seen, and fur traders immediately jumped to exploit Alaska's fur-bearers. Small associations of fur traders began sailing from Siberia to the Aleutians. Their seasonal hunting trips extended into two- and three-year intervals to save money on a costly "commute," and colonization began. By the late 1790s the Russians had cornered the market on more than half of all fur-trading activities, and Grigory Ivanovich Shelikov co-founded the Shelikov-Golikov Company. In short time, the large, powerful company established itself as a monopoly over all fur-trading activities. The monopoly was later chartered as the Russian-American Company.
The Russians expanded their monopoly into southeast Alaska and even as far south as Fort Ross, California. However, profits began to fall as a result of overhunting and dependence on American ships for supplies. With growing money problems and anxiety over further British advancement, the Russian government approached the U.S. about buying Alaska. The U.S. Senate approved the purchase treaty on April 9, 1867, and after much debate, the House approved the treaty by a vote of 113 to 48.
Although the United States took possession of the Department of Alaska on October 18, 1867, payment wasn't delivered until August 1, 1868, thanks to further political wrangling in Congress. Ultimately, the United States purchased the 600,000 square miles of land along with the rights to "property in all public lots and squares, vacant lands, and all public buildings, fortifications, barracks, and other edifices which are not private individual property," as stated in Article II. The structures belonging to the Russian Orthodox churches were excluded, remaining in the possession of their parishioners.
And in the interest of protecting the Russian people who had made Alaska their home (while blatantly excluding Native Alaskans), Article III was included, stating " . . . inhabitants of the ceded territory, according to their choice, reserving their natural allegiance, may return to Russia within three years; but if they should prefer to remain in the ceded territory, they, with the exception of the uncivilized native tribes, shall be admitted to the enjoyment of all the rights, advantages, and immunities of the citizens of the United States . . . . "
It would take another 90 years for the status of the new United States territory to change from a military "Department" to "District," then "Territory," and finally "State."
Since 1949, with the first recorded celebration of the transfer ceremony in Sitka, October 18 has been known as Alaska Day. It is a paid holiday for state employees and a day of celebration and reenactment in the city that was once the capital of Russian America.