The story of how the Netherlands once owned Manhattan, now one of the most valuable pieces of real estate in the world, and gave it up for a small Indonesian island may sound like a historical blunder.
However, when seen through the lens of 17th-century geopolitics and trade priorities, it becomes a fascinating tale of colonial rivalry, global strategy, and economic pragmatism.
This article explores how this exchange came to be, the motivations behind it, and its long-term implications.
The Dutch Arrival in the New World
In the early 1600s, the Dutch were emerging as one of the world’s great maritime and trading powers.
Their fleet, controlled largely by the Dutch East India Company (VOC) and the Dutch West India Company (WIC), established trading posts and colonies across Asia, Africa, and the Americas.
In 1624, the Dutch established a settlement on the southern tip of Manhattan Island, calling it New Amsterdam. This colony was intended to serve as the capital of New Netherland, a Dutch province that included parts of modern-day New York, New Jersey, Delaware, and Connecticut.
New Amsterdam quickly became a modest but important trading hub, strategically located at the mouth of the Hudson River.
It attracted settlers and traders from across Europe, including not just the Dutch but also Germans, Scandinavians, and even Sephardic Jews fleeing persecution.
The settlement’s early governance and architecture were distinctly Dutch, and its tolerant policies made it a culturally diverse enclave.
The English-Dutch Rivalry
During the 17th century, the English and the Dutch were fierce rivals on the seas and in global trade. Both nations were vying for control of valuable colonies and trade routes.
While the Dutch were focused heavily on the spice trade in Southeast Asia, the English were expanding their influence in North America and the Caribbean.
Tensions between the two powers culminated in a series of Anglo-Dutch Wars. In 1664, during a period of growing hostility, the English seized New Amsterdam without firing a shot.
The Dutch governor, Peter Stuyvesant, was forced to surrender after English ships appeared in New York Harbor. The English promptly renamed the colony New York, in honor of the Duke of York, who had orchestrated the takeover.
Although the Dutch briefly regained control of New York in 1673 during the Third Anglo-Dutch War, they lost it again the following year under the Treaty of Westminster in 1674. But in that treaty lay the terms of one of history’s most curious land swaps.
The Spice Trade and Run Island in What Is Now Indonesia
To understand why the Dutch would give up something as promising as Manhattan, one must consider the global economics of the 17th century. At the time, spices such as nutmeg, cloves, and mace were highly prized in Europe.
They were used not only for flavoring food but also for preserving it and for medicinal purposes. The source of these precious spices was the Banda Islands, part of the Maluku (or Moluccas) archipelago in present-day Indonesia.
Among these islands was tiny Run Island, just three kilometers long, which the English had managed to control. Despite its size, Run was immensely valuable because it was rich in nutmeg trees.
For the Dutch, who were determined to monopolize the spice trade through the VOC, securing Run was of far greater economic importance than holding onto a distant and still-developing colony like New Amsterdam.
The Treaty of Breda
In 1667, the Treaty of Breda was signed to end the Second Anglo-Dutch War. As part of the treaty's terms, the Dutch agreed to formally cede New Amsterdam (Manhattan) to the English. In return, the English relinquished control of Run Island to the Dutch.
Though this exchange might seem laughably unbalanced in retrospect, it made perfect economic sense at the time.
The Dutch solidified their hold over the spice trade, while the English gained a foothold in North America that would later become a cornerstone of the British Empire.
Long-Term Consequences
While Run Island eventually lost its economic significance as nutmeg cultivation spread to other parts of the world, Manhattan's value skyrocketed.
New York City would grow into a global financial and cultural capital, worth trillions of dollars in real estate and economic activity. Meanwhile, Run faded into obscurity, a footnote in the colonial rivalry between two 17th-century superpowers.
Yet, judging the decision by modern standards misses the historical context. At the time, the Dutch believed they had made a strategic and profitable trade.
They prioritized immediate economic gain from the spice trade, which had enormous value, over a colonial outpost that was far from their primary centers of power.
