The Question of Ethics

The ACC and Its Detractors

With the purchase of the assets of the Russian American Company in 1867, and in the face of antagonism from competitors disappointed and angry over the awarding of the 20-year sealing contract in the Pribylovs in 1870, the Alaska Commercial Company displayed an ethical approach in its business practices. Still, “there were the charges, suits and slanders almost year-in year-out, by those who [had] wanted the contract for themselves…a suit was brought in San Francisco on grounds that Alaska Commercial had obtained the contract illegally.” (L. D. Kitchener. Flag Over the North. Superior Publishing Company, Seattle, 1954). But in its treatment of the Unangan/Aleuts of the Pribylovs as well as the miners heading to the Yukon during the Gold Rush, the ACC displayed a remarkable adherence to the three tenets of Judaism: social justice, charity, and education.

The Alaska Commercial Company came into existence when mastery over the Native population was the way to gain access to the fur seal trade. Cruelty, exploitation, and hardship were pervasive. In addition, other nations as well as rogue pelagic sealers were vying for the seal skins resulting in violence and eventual decimation of the herds. Pelagic refers to seals being hunted or shot at sea regardless of sex or age. The profit potential of the fur seal trade was recognized and pursued by nations east and west. At the same time expansionism was occurring within the United States itself from east to west. The Aleuts were in a very real sense, caught in the middle of what was happening in the bigger world picture. The ACC was awarded the first 20-year lease to the Pribylovs as it was decided at the time that a one-party monopoly over the Pribylov fur seal trade would humanely preserve both the seal herds and the Aleuts who depended on their harvest.

The “Alaskan” Newspaper

It is important to look at history within the context of the times being examined; progress has its trade-offs and its costs. It is a question of acceptable norms (for the time) vs. presentism (judging by today’s standards). The following excerpts from the newspaper The Alaskan out of Sitka, including a frequent front page quote from the Treaty of Cession of Alaska to the United States as well as a brief retort by the editor, clearly demonstrate contradictory attitudes towards indigenous peoples, ranging from inclusive, conciliatory, critical, dismissive, paternal, and appreciative, depending upon the circumstances.  

Extracts from The Alaskan

(Sitka, Alaska), November 21, 1885-January 16, 1886

“Article 3d, Treaty of Cession of Alaska to the United States by Russia, date of March 30th, 1867: The inhabitants of the ceded territory, according to their choice, reserving their natural allegiance, may return to Russia within three years, but if they should prefer to remain in the ceded territory, they, with the exception of the uncivilized native tribes, shall be admitted to the enjoyment of all the rights, advantages, and immunities of citizens of the United States, and shall be maintained and protected in the free enjoyment of their liberty, property, and religion. The uncivilized tribes will be subject to such laws and regulations as the United States may, fom time to time, adopt in regard to aboriginal tribes of that country.”

“At this date, the ‘inhabitants of the ceded territory’ have no voice in any legislative body by which the defects in their anomalous ‘civil government’ can be remedied, and no means of acquiring title to a home in Alaska.’

“The Creoles and the Aleuts are civilized people, not in the full sense of enlightenment, but as being industrious, peaceable, and to a large extent educated.”

“The Native Alaskans ….are not Indians; their appearance, habits, language, complexion, and even their anatomy, mark them as a race wholly different and distinct from the Indian tribes inhabiting other portions of the United States, They are far superior intellectually, if not in physical development, to the Indian of the plains, are industrious, more or less skillful workers in woods and metals, and that they are shrewd, sharp traders…(they) yield readily to civilizing influences and can, with with much less care than has been bestowed upon native tribes elsewhere, be educated up to the standard of good and intelligent citizenship. Just in proportion to their educational progress, they should have the rights and privileges conferred, and the duties and penalties of full citizenship imposed, upon them.”  

“The Seminoles, of Florida, the Cherokees of Georgia, and the tribes which have approached nearest to civilization, in the western territories, have never yet buckled down to that energetic labor, which in the Caucasian races, has wrought out the noblest achievements in science and enlightenment, and progress, and power. No example or influence has ever fully enticed them to modify their own peculiar construction of ‘the glorious privilege of being independent.’”

“It is not only this imitation, but their very apparent desire to adopt the distinctive habits and pursuits of the superior race that maks the Thlinkets as widely differing from those races of savages which fly before the face of advancing civilization and reject its teachings.”

“The opinion of men of judgement, whose attention has been called to the Indians of whom we speak, has been officially expressed that they will prove a valuable class of citizens, in the maritime employment for which they will be needed, as the commerce of our western coast increases. We think it is shown, herein, that they are a very essential population to the development of this section of Alaska, and indeed, to the very life of our progress; for, the prospecting and working of our mines, and living itself, would be a very difficult thing her without their help.”

The Alaskan's Purpose

The goal of The Alaskan in pushing the positive traits of the Alaskans, both Native and white was to counter the attacks by William Morris of the Treasury Department who stated that “there are in this country as God-abandoned, God-forsaken, desperate, and rascally a set of wretches as can be found on earth. Their whole life is made up of fraud, deceit, lying, and thieving, and selling liquor to the Indians which they manufacture themselves,” ultimately convincing Congress of the viability and value of a civil government instead of military control. Passing The First Organic Act of 1884 created the District of Alaska, a civil and judicial district. This was a system that would replace “miner’s law” and its practice of rough frontier justice. Land could thereafter be registered for gold claims, making possible the collection of land taxes, a leverage for banking interests and private enterprise. It should be noted that the 1884 Organic Act authorized an agent of education, which led to the establishment of schools in scores of villages often with an accompanying infirmary, and later village-run cooperative stores.

There was to be stiff competition for the land beyond the 800 acres acquired originally by the Alaska Commercial Company after the Treaty of Cession. Native rights to the land they occupied were recognized, though the disposition of these rights was left to a future Congress. It wasn’t until 1971 that the Alaska Native Land Claims Settlement Act was passed giving Alaska Natives approximately $960 million in compensation for extinguishing all their aboriginal land claims as well as giving them ownership rights to 40 million acres of land. 

Henry W. Elliott
Henry W. Elliott
Changes Begin: The Arrival of the ACC

According to Henry W. Elliott - illustrator, leading authority on the northern fur seal, and assistant to the Treasury agent for the Pribylovs for overseeing the licensed fur sealing operation - the situation improved dramatically for the Aleuts with the arrival of the Alaska Commercial Company. “We see here now at St. Paul, and on St. George, in the place of the squalid, filthy habitations of the immediate past, two villages, neat, warm, and contented. Each family lives in a snug frame dwelling; every house is lined with tarred paper, painted, furnished with a stove, with outhouses, etc., complete; streets laid out, and the foundations of these habitations regularly plotted thereon. There is a large church at St. Paul, and a less pretentious but very crediable structure of the same character on St. George; a hospital on St. Paul, with a full and complete stock of drugs, and skilled physicians on both islands to take care of the people free of cost. There is a schoolhouse on each island, in which teachers are also paid by the company eight months in the year, to instruct the youth, while the Russian Church is sustained entirely by the pious contributions of the natives themselves on these two islands and sustained well by each other. The reality of the ACC’s commitment to social justice, charity, and education is well demonstrated here."

“There are 80 families, or 80 houses, on St. Paul, in the village, with 20 or 24 such houses to as many families at St. George, and 8 other structures. The large warehouses and salt sheds of the Alaska Commercial Company, built by skillful mechanics, as have been the dwellings just referred to, are also neatly painted; and, taken in combination with the other features, constitute a picture fully equal to the average presentation of any one of our small eastern towns.  There is no misery, no downcast, dejected, suffering humanity here today…the example of the agents of the Alaska Commercial Company, on both islands, from the beginning of its lease, and the course of the Treasury agents during the last four or five years, have been silent but powerful promoters of the welfare of these people. They have maintained perfect order; they have directed neatness and cleanliness, and stimulated industry, such as those natives had never before dreamed of.”

On March 29, 1872, ACC President John F. Miller wrote the following explanation of the ACC policies to the resident agent at St. Paul: “It is the policy of the Company to not attempt to make any profit in the sale of provisions and merchandise at the islands….” In addressing the slander and bad press suffered by the Company, he wrote “It has been a source of congratulation that we have been able to truthfully controvert all these damaging statements It is important that the utmost care be taken to see that the natives are kindly and liberally treated; that friendly relations between them and all our employees constantly exist, and that no injustice, even in the smallest degree, be done them; that the free schools are maintained; that no interference with their local government or religion be practices, and that they are constantly treated as people having the same rights, privileges and immunities as all citizens of the Unites States enjoy….It is the desire and hope of the Company to so elevate, civilize and benefit these people as to make a good example before the world.” Additionally, the ACC helped build the Russian Orthodox church for the Natives in Unalaska, and had their English prayer books printed in Russian.

Goldstone Retracts His Accusation

Louis Goldstone, one of the disappointed bidders for the seal contract ended up retracting his charges after withdrawing his own bid. In a letter to the Honorable John A. Bingham, Chairman of the Judiciary Committee of the House of Representatives in Washington D.C., he wrote:

“Honored Sir: During the last session of Congress, a memorial was prepared by the undersigned and associates and presented to the House and referred to your committee, in which it was alleged that the lease to the Alaska Commercial Company by the United States, for the islands of St. Paul and St. George, Alaska, August 3, 1870, was illegally obtained by said Company from the Secretary of the Treasury, and ought to have been awarded to the undersigned and associates. I now desire to withdraw said memorial. The allegations contained therein, having been made under a misapprehension of facts, are therefore untrue. The undersigned, representing the memorialists, as an act of justice to the Secretary of the Treasury and all concerned, begs to withdraw all statements of complaint contained in said memorial. I have the honor to be, sir, your obedient servant, Louis Goldstone.” (L. D. Kitchener. Flag Over the North. Superior Publishing Company, Seattle, 1954).

A Humane Policy in Practice

The first year of the last decade of the Company’s sealing contract is most notable for an expression of the humane policy and practice Alaska Commercial endeavored to hold to. The sentiments are to be found in the corresondence files for 1880, in a letter Samuel Willets, a Quaker shareholder, wrote from New York, November 16, to Company President John Miller in San Francisco.

“The great success of the Alaska Commercial Company has prompted more or less thought respecting the enterprise; and in connection therewith I have found myself thinking of the Alutes (or whatever the inhabitants of St. George and St Paul Islands are called) and have wondered if all is being done for them that ought to be done, considering the rich harvest of the Company. The Islands, I suppose, as well as almost all of the United States, have been wrested from their original owners by the strong arm of our predecessors; and though I see no way in which restitution can be made to their successors, we can no doubt do much to improve the condition of their children. In conversing with our late lamented friends Henry P. Haven and Richard H. Chapell, they, together with Captain Morgan and others, assured me that we are and have been doing all and more than the Laws of Congress and our Contract with the Government require; but still the question arises with me, and are we doing all that we can do for those poor laborers who are filling our coffers with gold? Do we sell our goods to them at fair, reasonable prices? Do we pay them fair and liberal wages? Can we improve their houses and better their schools? Is there, in fact, any fault in our treatment of them that can be remedied? I feel that we should do everything we reasonably can for their comfort and improvement.” (L. D. Kitchener. Flag Over the North. Superior Publishing Company, Seattle, 1954)

Miller's Report

On December 1, Miller reported in his own handwriting and in meticulous detail about Butrin, the Chief’s son, educated by the Company in Vermont and serving as principal of the St. Paul school at a salary of $40 monthly. He described the gradual reduction of prices at the islands from 25 per cent down to 15 per cent over San Francisco invoices and reported on free medicines and schoolbooks. He told of operations on Copper and Bering Islands and free transportation privileges for the Natives on Company vessels. He also reported that the Pribylov Natives had $64,000 on deposit with the Company at 4% interest in the banking service.

“Instructions to our agents are most emphatic as to the necessity of fair dealings and strict compliance and faithful performance of every part of our contract with the Government and in this I have always met with a hearty support of the entire Board of Directors to which the success of the Company must in the main be attributed.” (L. D. Kitchener. Flag Over the North. Superior Publishing Company, Seattle, 1954)

ACC President John F. Miller
ACC President John F. Miller
The Anti-Monopoly Association

It was no coincidence that attacks against the Alaska Commercial Company were especially vicious as word reached San Francisco of the ACC’s successful fur harvests and increasingly profitable London fur sales. In 1875, a pamphlet was published called, “A History of the Wrongs of Alaska, An Appeal to the People and Press of America, printed by order of the Ant-Monopoly Association of the Pacific Coast.” The commotion it caused with its allegations of wrongs by the ACC caused the House of Representatives Committee on Ways and Means to make a thorough investigation in 1876. The many witnesses attesting to the ACC’s efficient, honest, and ethical administration on the islands included former Treasury Secretary Boutwell, incumbent Treasury Secretary B. H. Bristow, Louis Goldstone, and ACC President John F. Miller. The House Committee found no fraud or violations: “There is no just ground of complaint against the Alaska Commercial Company or the officers of the government who were entrusted under the law with the power to make and see to the performance of the lease.”

Interesting and perhaps prophetic considering the Company’s failure to secure the 2nd  sealing contract in 1890, were a series of letters from San Franciscan Robert Desty to the House admitting to his employment for six years as a writer for the Alaska Herald: “It is well known that there has existed in the city for several years a combination, mostly fur dealers, who singly and together, under various names have made one common cause against the Alaska Commercial Company. The object and purpose …was to raise a clamor against the Alaska Commercial Company, and by charging fraud and oppression continually, make the Company so odious to the public that Congress would take action towards the abrogation of its contract of lease for the Seal Islands.”

Towards the end of 1887, Alaska Governor A. P. Swineford accused the ACC of sealing law violations as well as oppression and robbery of natives who he referred to as “enslaved Aleuts.” In 1888, he traveled to the Pribylovs on the U.S. man-of-war Thetis to inspect every part of the islands. In spite of his initial negative report, Swineford offered only praise after the inspection, stating that [the Company] is doing even more in the matter of providing for the wants and comfort of the natives than its contract requires.” Even so, he went on to say “this particular monopoly is worse than a trust; it is not a combination of individuals or corporations, organized for the purpose of regulating production and keeping up prices; it is a great coporate monopoly, created by Congress itself and armed with a monopolistic club in the shape of sole and exclusive possession of a most valuable industry, which it does not scruple to use to beat out, so to speak, the brains of any and all competition for that part of the fur trade not embraced in its lease and contract with the government.”  

A Mandate from Gerstle

From the beginning of their formation, Sloss and Gerstle insisted upon fair and ethical practices as described above; later with the expansion of their stores throughout the Territory following the Gold Rush, they made it clear in the Company’s rules that no branch would ever take advantage of misfortune and that no man would ever be permitted to starve in the wilderness. These have remained fundamental Company policies to this day.

A mandate addressing the above was written down on May 7, 1886, by President Lewis Gerstle. His letter to M. Lorenz, Company agent at St. Michael, detailed instructions that were copied and furnished to every trader in Alaska.

 “Dear Sir: We have been informed that a large number of miners have already started to the Yukon and Stewart River Mines, and it is probable that many others will be attracted to that section of the Territory in consequence of the supposed existence of rich diggingsin the district. Considering that the Company’s station at St. Michael is the nearest source of supply, an extra amount of groceries and provisions has been sent to you to meet the possible demands likely to be made upon you during the coming winter.

It must not be understood, however, that the shipment referred to is made for the purpose of realizing profits beyond the regular schedule of prices heretofore established. Our object is to simply avoid any possible suffering which the large increase of population insufficiently provided with articles of food, might occasion. Hence, you are directed to store these sullies as a reserve to meet the probable contingency herein indicated, and in that case to dispose of the same to actual consumers only, and in such quantities as will enable you to relieve the wants and necessities of each and every person that may have occasion to ask for it.

In this connection we deem it particularly necessary to say to you, that traders in the employ of the Company, or such others as draw their supplies from the stores of the Company, doing business on their own account, must not be permitted to charge excessive profits, otherwise all business relations with such parties must cease, as the Company must not permit itself to be made an instrument of oppression towards anyone that they may come in contact with.

It is useless to add that in the case of absolute poverty or want, the person or persons placed in that unfortunate position should be promptly furnished with the means of subsistance without pay, simply reporting such facts at your earliest convenience to the home office.

Asking your strict compliance with the foregoing instructions, which we hope will be carried out with dur discretion on your part, I am, with kind regars to yourself and Mrs. Lorenz,

                                                              Yours truly,

                                                               Lewis Gerstle, President.”

Lewis Gerstle
Lewis Gerstle

The letter was published in an article by Edward H. Hamilton in the San Francisco Examiner on July 4, 1927, under the heading: “Corporation Showed Its Soul North of 53,” and has subsequently been reprinted several times as an example of exceptional altruism and probity on the part of a large company.

In 1890, the ACC lost the sealing franchise to the firm of I. Liebes, backed by the Rothschilds of London. Their first Pribylov superintendent was former Treasury agent George R. Tingle who had initially been sent to the islands in 1885. Aware of the impending end of the ACC’s twenty-year sealing contract, he had questions and concerns about the wording and the administration of the current lease agreement with, one might assume, an eye to the future new contract.  


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