Since the development of Alaska was not a pressing issue, Congress did not create a civilian government, leaving the new American possession in political limbo. For the first 17 years following its purchase, there was no government in Alaska outside of that provided in coastal towns by the Army, Navy, or customs collectors. For all intents and purposes, it was a military district with no civilian laws.
Since Congress had not created rules for local government in Alaska, the new arrivals at Sitka took things into their own hands. In 1867, 115 civilians signed a charter creating a city government. The town government levied taxes and started a school. But it didn't last long because some people refused to pay taxes to a government with no basis in the law. A bigger reason the town government failed was that many of the early speculators had left by the early 1870s. The Sitka Council held its last meeting in 1873.
Many people blamed the lack of proper government for the decline of Sitka. Congress had failed to provide basic government services for Alaska. There was no regular mail service, lighthouses were not maintained for navigation, and people could not buy or settle land as there was no agency to provide a legal title. The hospitals and schools that had operated under the Russians closed down. One of the few laws passed by Congress during the early days of American rule was to ban the importation and sale of alcohol. It was a law widely broken. Incidents of drunken soldiers terrorizing locals and Natives were commonplace.
The Army had never wanted to be responsible for governing Alaska. In 1877, it withdrew its troops, saying the soldiers were needed to fight the Nez Perce Indians in Idaho. After ten years under Army administration and largely ignored by Congress, Sitka, the one-time Paris of the Pacific, had become a virtual ghost town.
For two years after the Army's departure, Alaska's only remaining government official was a revenue collector from the Treasury Department. In 1879, a U.S. Navy warship arrived, starting a five-year period in which the Navy governed Alaska.
When a Congressional committee proposed that a territorial government be set up in Alaska, a New York Times editorial on March 22, 1880, said it would be a big waste. "The total white population of Alaska is about 250 and, for purposes of political illustration, the number of voters is usually put down at 15...To give this handful of people a governor and a representative in Congress, to say nothing of the courts, would be a farce of the broadest kind."
The figures quoted by the Times differed from the 1880 census, which listed the population of non-Natives as 430 and estimated that there were 33,000 Natives. However, the article accurately reflected the U.S. government's attitude toward its new territory.
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