1. Purchase History of Alaska

The Alaska Purchase (1867)

• Date of Purchase: March 30, 1867

• Parties Involved:

• United States: Represented by Secretary of State William H. Seward

• Russian Empire: Represented by Minister Eduard de Stoeckl

• Purchase Price: $7.2 million

• Equivalent to about 2 cents per acre

• Area Acquired: Approximately 586,412 square miles (about 375 million acres)

Context and Significance

• Russian Motivation:

• Financial difficulties and the costly burden of defending Alaska

• Concern over potential conflict with Britain, which could result in losing the territory without compensation

• American Motivation:

• Expansionist aspirations aligned with the doctrine of Manifest Destiny

• Interest in the natural resources and strategic advantages of the territory

• Public Reaction:

• Initially met with skepticism; critics dubbed it “Seward’s Folly” and “Seward’s Icebox”

• Many Americans saw it as a wasteland with little to offer

Outcome

• Resource Discovery:

• Gold Rushes: Notably the Klondike Gold Rush in 1896

• Oil and Gas: Major discoveries contributing significantly to the U.S. energy supply

• Statehood: Alaska became the 49th state on January 3, 1959

• Strategic Importance:

• Played a crucial role during World War II and the Cold War due to its proximity to Russia

2. Estimating the Annualized Rate of Return (ARR) for Alaska

Step 1: Confirming the Purchase Price

• Initial Investment (1867): $7,200,000

Step 2: Estimating the Current Land Value of Alaska

Total Area Conversion:

Average Land Value per Acre:

• Considering the vast undeveloped areas and lower population density, a conservative estimate is $1,000 per acre

Total Current Land Value:

• Estimated Current Value: $375.3 billion

Step 3: Calculating the Annualized Rate of Return (ARR)

Variables:

• Present Value (PV): $7,200,000

• Future Value (FV): $375,303,680,000

• Number of Years (n): 2024 – 1867 = 157 years

ARR Formula:

Calculations:

1. Compute the Growth Factor:

2. Calculate CAGR:

Step 4: Summary

• Initial Investment (1867): $7.2 million

• Estimated Current Value (2024): $375.3 billion

• Annualized Rate of Return: Approximately 7.17% over 157 years

3. The Concept of Manifest Destiny

Definition

Manifest Destiny was a 19th-century doctrine and belief that the expansion of the United States across the North American continent was both justified and inevitable, ordained by God to spread democracy and capitalism.

Origins

• Term Coined: By journalist John L. O’Sullivan in 1845

• Context: Used to advocate for the annexation of Texas and the Oregon Territory

Core Principles

1. Divine Providence: Belief that the U.S. had a God-given mission to expand westward.

2. Destined Expansion: The inevitability of U.S. territorial growth.

3. Spreading Ideals: Duty to spread democracy, freedom, and civilization.

Historical Context and Expansion

• Louisiana Purchase (1803): Doubled the nation’s size.

• Annexation of Texas (1845): Led to the Mexican-American War.

• Oregon Trail (1840s): Migration route for settlers moving west.

• Mexican Cession (1848): Acquisition of vast territories after the war with Mexico.

• Gadsden Purchase (1853): Acquired land for a southern transcontinental railroad.

• Alaska Purchase (1867): Extended U.S. territory into the Arctic.

Impact on U.S. Policy and Society

• Territorial Growth: The U.S. expanded from 13 colonies to a nation spanning coast to coast.

• Economic Development: Access to new resources, agricultural lands, and trade routes.

• Conflict with Indigenous Peoples:

• Displacement: Forced removal of Native American tribes (e.g., Trail of Tears)

• Wars and Treaties: Numerous conflicts resulting in loss of native lands and culture

• Slavery Expansion Debate:

• New territories intensified conflicts over slavery, contributing to the Civil War.

• Foreign Relations:

• Justified interventions and conflicts with neighboring countries.

Criticism and Controversies

• Ethnocentrism and Racism:

• Belief in Anglo-American superiority marginalized Native Americans and other groups.

• Imperialism:

• Viewed by some as a pretext for aggressive expansion and conquest.

• Moral and Ethical Concerns:

• The ideology justified the displacement and suffering of indigenous populations.

Legacy

• Cultural Influence:

• Shaped American identity and notions of exceptionalism.

• Modern Reflections:

• Ongoing debates about the consequences of Manifest Destiny on native peoples and international relations.

• Historical Significance:

• Set the stage for the United States to become a continental power and later a global influence.

Conclusion

The acquisition of Alaska, initially mocked as “Seward’s Folly,” has proven to be a strategic and economically beneficial decision for the United States, with an estimated annualized return of 7.17% over 157 years. This purchase, along with others during the 19th century, was influenced by the ideology of Manifest Destiny, which played a pivotal role in shaping the nation’s expansionist policies. While it facilitated the growth and emergence of the U.S. as a significant power, it also led to profound and often devastating impacts on indigenous populations and set the stage for future ethical and political debates.

Note: This estimation is a simplified analysis intended to provide a general understanding of the financial growth associated with the Alaska Purchase and the concept of Manifest Destiny. Actual historical and economic complexities are more nuanced and involve a range of factors not fully captured here.