Good Deal: The purchase of Manhattan from the Canarsee Indians (1626)
Good Deal, Bad Deal

The Dutch, for a relatively nominal sum, reached an accommodation with the Canarsee Indians for Manhattan and avoided much of the strife and bloodshed associated with European conquest of Indian-occupied territories in the Western Hemisphere.

What Went Right:
The Dutch, for a relatively nominal sum, reached an accommodation with the Canarsee Indians for Manhattan and avoided much of the strife and bloodshed associated with European conquest of Indian-occupied territories in the Western Hemisphere. Unfortunately for The Netherlands, its economic and political problems cost it its colonies, and it ceded control of New Amsterdam to England, who renamed it New York in 1674. Just more than a hundred years later, the new sovereign, the United States of America, obtained the land through the Revolutionary War. The 1626 purchase of Manhattan is interesting to study not just because of its historical and financial importance, but because it illustrates the difficulty of evaluating business deals. For that matter, it illustrates the difficulty of reconstructing historical events. In both instances, it sometimes just depends on whom you ask.

The Dutch began claiming parts of what would become America's east coast (which they called New Netherland) in 1609. In 1626, Dutch representative Peter Minuit purchased the island of Manhattan (which the Dutch called New Amsterdam) from a group of local Indians. The Netherlands' economic and political problems during the period that immediately followed the purchase led it to cede the property to the English in 1674. At this time it became known as "New York." As a result of the Revolutionary War, the land became the property of the United States.

Everything else about the deal is in dispute, including the identity of the seller and the price. According to most accounts, the seller was the Canarsee Indians, though some claim is was the Shinnecock Indians or the Algonquin Indians. The price has been described in many ways, among the: 60 gilder; 60 florians; $24 worth of beads; the value of 10 beaver pelts; 30 beaver skins (the equivalent of one musket and a bale of tobacco); a load of cloth, beads, hatchets, and other odds and ends; and the equivalent of one and a half pounds of silver (worth $72 today).

Minuit did not get a good deal because he paid the equivalent of 60 gilders, versus 600 gilders or 6,000 gilders. He got a good deal because he bought peace and security at a price he could afford and then developed the area so it could become the foundation for modern-day Manhattan.

The deal, from a pure economic perspective is not as good as the previous paragraph's one-sentence summary conveys. The local Indians did not do badly for themselves. Many accounts explain that the Canarsees had not settled the area and were just passing through. Therefore, they sold something they did not even own, and took advantage of Minuit's fear of Indians, desire for peace, and unfamiliarity with the area.

A second perspective is that the local Indians did not recognize "ownership" of property. They took the offer as a gracious gesture. They did not vacate the area following the deal, nor were they charged for occupying the property. A third perspective is that the transaction was not a purchase but a ransom. According to this view, Minuit was buying peace rather than land. Historical accounts explain, for example, how the Raritan Indians in the Staten Island area "sold" Staten Island six times.

The fourth perspective is that, by getting anything, the Indians made a great deal. The purchase of Manhattan was one of the few instances where Europeans, as part of their conquests, recognized property rights of the indigenous people. in most other instances, those rights were ignored - and, in fact, the Indians did not consider themselves "owners" of the land - which led to later conflicts, destroying most of the Indian tribes and much of their culture.

Perhaps history would have been significantly changed for the better if settlers had viewed the territories as properties rather than conquests, and reached early economic accommodations with the indigenous population. This is not to say that there was never any bloodshed in connection with the development of New York by the Dutch, but the process was accomplished in a less violent way than in most expansions through hte American territories inhabited by the Indians.

Michael Craig

5/15/07

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