The term "Seward's folly" refers to the United States' Secretary of State William Seward's decision to purchase the Alaskan territory from Russia in 1867. At the time, Seward's decision to buy the land was regarded as a terrible one by many critics in the United States — hence, the term "folly."
In Seward's Folly, Czar Alexander II of Russia decided to sell the country's territory in Alaska, because Russia was having economic troubles and would not be able to sufficiently defend the territory from invaders. The czar reasoned that they would be better off selling the territory than waiting for it to be annexed by another country. He offered to sell the land to the United States, and sent a Russian diplomat to enter negotiations with William Seward.
Seward's Folly resulted in the purchase of 6,000,000 square miles for $7,200,000 US Dollars (USD) — only a few cents per acre. Though public opinion of the purchase was generally positive, it was the words of several critics that gave "Seward's Folly" its name — most notably, The New York Tribune's Horace Greely, who claimed that Alaska "contained nothing of value but furbearing animals, and these had been hunted until they were nearly extinct. Except for the Aleutian Islands and a narrow strip of land extending along the southern coast the country would be not worth taking as a gift."
However, in the 1890s, large quantities of gold were discovered in the Alaskan territory, which made critics of Seward's Folly change their tune and praise him for his foresight. Unfortunately, William Seward never got to see "Seward's Folly" acknowledged for the great accomplishment it was, as he passed away in 1872, before the gold reserves had been found.
Today, Seward's Folly is celebrated as "Seward's Day" in Alaska on the last Monday of March each year, in honor of Seward's purchasing the Alaskan territory from Russia. Though it was established as an organized territory in 1912, it did not ultimately become a state until 1959. Today, Alaska is by far the largest of the states in the United States.
Seward's Folly helped the United States turn Alaska into a tourist destination for people who love the outdoors. Oil was also found in the state, though ongoing controversy remains as to whether it is right to drill for it in a wildlife refuge, where much of the oil is located. As of 2005, Alaska had a population of around 663,000, making it the least densely populated state in the nation.