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In the early 1860s, Alaska hardly seemed like a jewel in the Russian Empire's crown. There were fewer than five thousand Russian settlers in the entire territory, bands of natives continued to resist Russian rule, and American fur traders continued to undermine Russian control of the territory's economy. The one bright spot was the increasing Russification of the Aleuts and Koniags, who continued to adopt the Orthodox faith as well as Russian customs (and, in the case of a few tribal chiefs, Russian sons-in-law). Many politicians and nobles advocated selling the territory to the British or Americans, and preliminary steps in that direction took place in 1867, but the negotiations dragged on and on over the cost of the Russian colony and, when American Secretary of State William Seward resigned due to ill health, the moment passed. Seward's successor John Usher was less keen on the idea, as was President Johnson (influenced by an increasingly skeptical public and Congress, not to mention his impeachment troubles). In March 1868, the Russians withdrew from the negotiations. Alaska would remain Russian.

With the easy option gone, the Russians now belatedly turned to cementing their hold on Alaska. Settlement was encouraged, and in the case of several thousand convicts shipped across the Bering Strait, dictated. A small naval base was established at Kodiak, the beginning of the Trans-Alaska Road (which would eventually connect Kambalapekask with Nazarovsk and also serve as the route of the later Central Alaska Railroad) was laid down and a line of border outposts were established to stem the tide of illegal British and American fur traders.

None of this was cheap, and the Czar's Alaska Project was frequently and vocally criticized in the Duma and the Russian press. Things changed overnight when a pair of Orthodox missionaries working in the Baranov Peninsula discovered gold. Word of their find spread rapidly, and the Gold Rush was on. Alaska's population doubled almost overnight as prospectors, traders, adventurers, con-men, criminals, swindlers and a whole host of others flocked to Russia's American colony. Many of them were "Bostonians" (as all Americans were called by the local Russians) but there were thousands of Russians (and other subjects of the Russian Empire, especially Georgians and Ukrainians). A frontier state emerged, lawless and profitable, and Russia's "Land of Promise" became a fixture in the public imagination for a generation. The port of Pavlovsk and Navarovsk, Alaska's gold city, both soon superceded the capital Novoarkhangelsk in size and importance.

While Russian imperialists' dreams of dominating the whole of the northern Pacific never came to pass, Russian Alaska did help cement the Empire's control over a wide arc of territory stretching from Manchuria nearly to the northwest border of the United States. Sadly for the Czar, the Alaskan bauble in his imperial crown couldn't stop the march towards revolution and civil war. By 1905, the gold fever had died down, and life in Alaska wasn't all that different than life in the Russian Far East - which is to say cold, dreary and generally unremarkable. Novoarkhangelsk and Navarovsk were respectable provincial cities, complete with Orthodox cathedrals, theaters, and museums alongside nightclubs, brothels and taverns. The naval base at Kodiak kept a wary eye on the Americans, British and Japanese. The Central Alaska Railroad was built, at enormous expense.

It was the CAR that served as the flashpoint of revolution in Alaska. Railroad workers suffered low wages and harsh treatment at the hands of their employers, but also had to contend with the cold Alaskan winters and the hostility of natives displaced by the railway and frequent conflicts with 'native' Russians (mostly fishermen and miners). While the threat of Japanese attack never materialized when war broke out in 1904 (two of the Kodiak destroyers steamed southwest to Vladivostok and were destroyed at the Battle of Tanegashima, while the third remained anchored in the harbor for the duration of the war), the conscription of railway workers to build fortifications around Novoarkhangelsk and Pavlovsk was carried out nonetheless. The brutal working conditions raised worker anger to the boiling point, and a strike was proclaimed by the (illegal) Alaskan Railway Brotherhood. In a repeat of Bloody Sunday in St. Petersburg, the strike was brutally crushed by police and soldiers. More strikes and clashes between workers and the authorities followed, as did concurrent fights between ethnic Russians, native Alaskans and imperial minorities.

Order was eventually restored in Alaska as it was in Europe, but the dividing lines of the Civil War had taken shape. On one side were the railway workers and the handful of factory workers (aside from the light industry serving and building the railway, there wasn't much in the way of manufacturing in Alaska), on the other the tiny middle class of Navarovsk, Novoarchangelsk, Pavlovsk and Irina (founded in 1903 and rapidly outpacing the other cities in size and grandeur, by Alaskan standards) as well as the men working on the fishing fleets, the gold miners of the interior and the very few rural settlers. Most of the natives sided with the latter, influenced by the Orthodox Church had had seen great success in converting them to Christianity and adoration of the Czar.

The highlight of this period was the 1911 visit by Grand Duke Michael, younger brother of the Czar, to celebrate the inauguration of Irina as the new capital of Alaska. The great celebrations that took place all during that year were the height of Czarist Alaska, but also in many ways the twilight of the ancien regime in the New World.
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