Peter Minuit offers an American Indian chief trinkets worth about 60 guilders in exchange for the island of Manhattan.

Stock Montage/Getty Images

The Manhattan Deal

After the English explorer Henry Hudson fruitlessly sought a Northeast Passage to Asia via the Arctic Ocean, the Vereenigde Oost-indische Compagnie (VOC) contracted him to search for a Northwest Passage to Asia through North America in 1609. Hudson didn't find a Northwest Passage, but he did find Long Island, Manhattan and a river that would later bear his name.

Hudson claimed the land for the VOC, which revved up fur trading in the area in the ensuing decades. The States-General of Netherlands then formed the Dutch West India Company in 1621 to colonize the land, by this time known as New Netherland.

Peter Minuit, the VOC's director-general, came to New Netherland in 1626 to broker a deal with the American Indians, who occasionally used the land to hunt and fish. In exchange for the island of Manhattan, Minuit offered the tribe a chest of beads and other trinkets worth 60 guilders. In the 19th century, this amount was famously estimated to be about $24; however, that number is disputed [source: Axelrod]. If we assume that the Dutch bought Manhattan for a few cents an acre, it would be a steal comparable to the United States' purchases of Alaska or the Louisiana Territory. On the other hand, it seems like a raw deal for the American Indians. But many historians point out that the Dutch are the ones who got conned. The American Indians didn't have the same sense of land ownership as the Dutch did. They didn't even live on the island, which they called "Manahachtanienk," meaning, "place where we all got drunk" [source: McVeigh]. When Dutch settlers brought liquor to the island, they offered it to the American Indians they found there. Because American Indians had no history of alcohol use, the liquor had a significant effect on them.

In any case, the American Indians accepted payment for land they didn't consider theirs. And it should be noted that the Dutch offering payment at all was a sign of good faith to legitimize their claims, especially compared to the Spanish conquistadors who opted simply to take the land they wanted [source: Axelrod].

Even if each party were guilty of treating the other unfairly, the Manhattan deal can still be considered a bargain -- for both sides. But the Dutch didn't keep Manhattan for long.