The Russians decided they had harvested as much as they could from the territory, and sold it to the United States for 7.2 million dollars in 1867 (about $.20 per acre). The deal was negotiated by Secretary of State William Seward. At the time, the purchase was considered a foolish decision by many and referred to the transaction as Seward’s Folly. Ultimately the value of the land was realized, and the largest town on the Kenai Peninsula was named in Seward’s honor.
After the attack on Pearl Harbor, the U.S. government realized its need to improve coastal defenses. A deep water port, Seward remains ice-free during the winter months. In addition, the mountains and islands surrounding the bay gave it strategic importance. Because of its position overlooking Resurrection Bay, the first site chosen was Caines Head. Over the course of several months, gun batteries, searchlights, communication sites, and supporting facilities were constructed. Six other sites around the bay were set aside, but only four were eventually used.
According to the National Park Service website, there were very few incidents of real or perceived enemy activity in the bay. However, a local fox farmer named Pete Sather made the mistake of heading into the bay without signaling. Within minutes, he found himself under attack. Soldiers turned the searchlight on him and boarded his boat. Indignant over the incident, he felt he should have been ensured safe passage. After all, he was carrying the mail.
The areas were demilitarized after the war, and the land was turned over to the Department of Interior. In the early 1960s, the state of Alaska Bureau of Land Management took over the property.