I have to warn you that this story began as a search for the answer to a very simple question: just how much did the Dutch actually pay for Manhattan? The bill of sale and the deed were both lost long ago. But did Peter Minuit really buy the island for a measly $24 in beads and cloth, as the legends say? In 2005 Mr. Jonathan Miller, head of the property-appraisal firm Miller Samuel, estimated that the land value alone of Manhattan island was $8 trillion, leaving the implication that Minuit duped the Indians. But the Dutch did not use dollars. So what did they actually pay? And would anybody have ever actually used beads to buy an island?
If humans looked more like baboons or American Robins, we would have never invented jewelry. But, being naked apes, we have always adorned ourselves with tattoos, furs and objects we thought made us look pretty. The first “jewelry beads” were river pebbles, collected and buried with loved ones 40,000 years ago. The Egyptians were the first customers for glass beads 3,400 years ago. The Venetians cornered the glass bead manufacturing market a thousand years ago. And 500 years ago Christopher Columbus discovered that Native Americans were as acquisitive of jewelry as the nobility in Seville. The Dutch and the American Indians were no different than those fashion maven naked apes, Ferdinand and Isabella.
Specifically the Dutch were dealing with the Canarsee Indians. They were Delaware speakers living on the Brooklyn shore. They actually called themselves the Lenape, and owed allegiance not to a tribe but to their extended family (or clan).
They traced themselves through their female members, who tended crops and fished - feeding the family in the summer - while the men fished and hunted – feeding the family in the winter. And contrary to common knowledge the native peoples had a strong and nuanced understanding of property rights. While Europeans bought and sold land between individuals, separate hunting rights, water rights, farming and even mineral rights were traded between Indian clans. And when the Dutch “bought” Manhattan, the Canarsee were in fact selling the “European rights” to the island, meaning the Carnarsee had agreed only not to welcome any other Europeans to town. And it is likely this was exactly what the Dutch intended to buy - exclusivity. And that makes the $24 sale price look a lot more reasonable.
When the new governor of New Amsterdam, William Verhulst, arrived in 1625, he carried instructions that the natives must be “…given something to their satisfaction…” in exchange for the land. Verhulst bungled the negotiations and he was replaced in May 1626 by Peter Minuit, who quickly closed the deal.
On November 4, poor Verhulst arrived back in Holland as a failure, and the Dutch West Indian Company learned their managers on the spot had “…purchased the Island Manhattes from the Indians for the value of 60 guilders.” There was no mention of any beads.
In fact The Canaresee traded nothing for beads. Of importance to a Stone Age population were iron axes and knives, cooking pots and fish hooks. Iron is more durable than bone or clay and requires replacement less often, meaning it demands less of an energy investment to achieve the same benefit. The Canarsee traded Dutch access to Manhattan for an easier life for themselves and their children. We make the same choice every time a community legalizes casino gambling or a state authorizes an oil pipeline through a park.
A guilder had originally been a gold (or gulden) coin, but by 1626 it was usually silver. According to the “Annals of Public Education in the State of New York”, by Daniel Johnson Pratt, “A guilder is 40 cents”; or at least it was in 1872. And the 60 guilders paid for Manhattan “…equaled three or four months wages for the average artisan,” according to “The Dutch-Munsee encounter in America” by Paul Andrew Otto.
But the problem is the pay scale for artisans has altered a bit over the last 400 years. If we figure $24.00, (the alleged sale price) compounded at 3% interest over those 400 years, it would seem the Canarsee were paid the equivalent of about $1.5 million for Manhattan, which sounds reasonable. But that same inflation would today give our average artisan an annual income of $6 million, which seems a little high for an average artisan.
Another approach is to find something of value then, and compare it to its value today. The Encyclopedia Britannica says that in 1626 sixty guilders would get you 1& 1/2 pounds of silver, a “troy” pound being 12 ounces. Today (August 17, 2009) silver is selling for $14.03 an ounce. So the 18 ounces of silver which sixty guilders would have bought you in 1626 would today be worth $252.54 ; which seems a little low for access to an entire island forever.
Maybe the question we should be asking is not what the Dutch paid for the European rights to Manhattan, but what were the rights worth to them. According to Mr. Otto, those 60 guilders were equal in value to “…thirty beaver skins…”. What are beaver pelts worth today? The Fur Source web site lists “…prime quality (beaver) pelts from North America” at $279.99 per pelt (regular price). That would make the modern day sale price of Manhattan (30 pelts) about $8,399.70; still a bargain for the Dutch. But it was also something else.
The Dutch established a trading post on Manhattan, which they called New Amsterdam, where they bought beaver pelts from the Canarsee. In fifty years there were no more beavers in the area. In a century there were no more Canarsee. New Amsterdam was soon gobbled up by the British Empire. And asking who made the better deal seems beside the point. The Dutch profited from buying the island, the Canarsee by selling it. And asking who profited the most is useless 400 years later.
Whether the Canarsee had sold the island for an actual $8,400 in 1626, or for the $1.5 million, what were they going to do with the profit, buy an ipod, or a vial of antibiotics? In short, all things are relative. And having tried to establish the “actual” sale price of Manhattan, I have learned that the insight gained by allowing for inflation is over inflated.
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