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In 1626, Peter Minuit, governor of the Dutch settlements in North America known as New Amsterdam, negotiated with Canarsee chiefs for the purchase of Manhattan Island for merchandise valued at sixty guilders or about $24.12. He purchased the island for the Dutch West India Company.

The next year, Fort Amsterdam was built by the company at the extreme southern tip of the island. Because attempts to encourage Dutch immigration were not immediately successful, offers, generous by the standards of the era, were extended throughout Europe. Consequently, the settlement became the most heterogeneous of the North American colonies. By 1637, the fort had expanded into the village of New Amsterdam, other small communities had grown up around it, including New Haarlem and Stuyvesant's Bouwery, and New Amsterdam began to prosper, developing characteristics of religious and linguistic tolerance unusual for the times. By 1643, it was reported that eighteen different languages could be heard in New Amsterdam alone.

Among the multilingual settlers was a large group of English colonists from Connecticut and Massachusetts who supported the English King's claim to all of New Netherlands set out in a charter that gave the territory to his brother James, Duke of New York. In 1664, when the English sent a formidable fleet of warships into the New Amsterdam harbor, Dutch governor Peter Stuyvesant surrendered without resistance.

When the English acquired the island, the village of New Amsterdam was renamed New York in honor of the Duke. By the onset of the Revolution, New York City was already a bustling commercial center. After the war, it was selected as the first capital of the United States. Although the government was eventually moved, first to Philadelphia and then to Washington, D.C., New York has remained the unofficial commercial capital. During the 1690s, New York became a haven for pirates who conspired with leading merchants to exchange supplies for their ships in return for a share in the plunder. As a colony, New York exchanged many agricultural products for English manufactured goods. In addition, trade with the West Indies prospered. Three centuries after his initial trade with the Indians, Minuit's tiny investment was worth more than seven billion dollars.

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