The early settlement of Manhattan Island was bought for $24 from the native population.
Manhattan Island is now the bustling heart of New York city and one of the most important financial, cultural, and commercial center in the United States. It is also the most densely populated county in the United States. Not long ago, however, it was nothing but undeveloped land inhabited by a few Indians. This article gives the early history of Manhattan island.
In 1524, Giovanni da Verrazzano became the first European explorer to pass New York Harbor. He was also the first European to meet the area’s natives, the Lenape Indians. It was not until 1609, however, that any further contact with the natives were made. On September 11th of that year, the English explorer Henry Hudson came to Manhattan Island while working for the Dutch East India Company. He mapped the island before continuing up what would become known as the Hudson River.
In 1625, the Netherlands built Fort Amsterdam on the island to protect Dutch fur trading and Dutch colonists. The name of the settlement was later changed to New Amsterdam. It remained self governing until the British captured it in 1664 and renamed it New York. Aside from a brief period when the Dutch recaptured the city in 1673, the colony remained in English hands until after the American Revolution.
Unlike many European colonies, the New Amsterdam colony had actually paid the Native Americans for its land. In 1826, Peter Minuit had paid the Indians 60 Guilders worth of trade goods for the entire island. Traditionally, historians have said that the 60 guilders was worth about $24. That figure is deceptively low, however, because it was calculated in 1846. Even if it was accurate then, that $24 would be worth several hundred dollars today.
Some have also argued that this price is arbitrary because it does not take into consideration that the Indians may have received technology far superior to anything they had enjoyed previously in the exchange. It is difficult to say whether the trade goods were beads and trinkets or whether they were axes, kettles, and farming tools. If the goods had utility, they may have been far more valuable to the Indians than any simple monetary equivalent.
Further, studies had pointed out that if they had invested that $24 at a 6% return, the Indians would have made $250 billion by now. Obviously, they had no way of doing that, but it indicates that the bargain may have been more fair than we think. It could have made a profit in the long wrong, because that $250 billion is more than Manhattan is worth today. On the other hand, it is clear that a handful of trade goods were not worth the rights to the island because the Natives eventually rebelled after becoming dissatisfied with their original deal.