Buzz
One of the most enduring myths in American history suggests that European explorers pulled off an incredible bargain by acquiring the entire island of Manhattan—where real estate prices now soar above $1,000 per square foot—through a paltry exchange of beads and trinkets valued at just $24. While this might sound like the deal of the century, the real story is far more complex and murky than the myth would suggest.
Inflation-Adjusted Value
The only known primary document referring to the Manhattan purchase is a letter written by Dutch merchant Pieter Schage on November 5, 1626, to the directors of the West India Company, which played a key role in the exploration and colonization of ‘New Netherland.’ In this letter, Schage states, 'They have purchased the Island of Manhattes from the savages for the value of 60 guilders.' (While there is a surviving deed concerning the purchase of Manhattan and Long Island, it was created much later, after the Dutch had been living on the island for several decades.)
In the 19th century, historians converted the 60 guilders into U.S. dollars and arrived at a sum of $24. This figure has been perpetuated for nearly two centuries, remaining static despite changes in currency value—yet those guilders aren’t worth $24 today. According to this converter from the International Institute of Social History at the Royal Netherlands Academy of Arts and Sciences, 60 guilders in 1626 would equal 734.77 euros in 2011. Depending on the exchange rate to USD, as of now, this converts to $951.08, which gives us a more accurate estimate.
Although $951.08 isn’t as much of a bargain as $24, there are still other complexities surrounding the deal. For instance, Schagen’s letter doesn’t reveal who actually negotiated the purchase with the Dutch or which tribe sold the land, and the deed for the transaction has been lost. Historians are left to speculate who the Dutch bought the land from, and they can’t seem to reach a consensus. Some stories suggest the Dutch were duped by a group of natives from Long Island, who traded land they didn’t own while passing through Manhattan, taking the European goods with them.
What Was Traded?
One important detail omitted from Schagen’s letter is what exactly the Dutch used to make the purchase. He only mentions a trade 'for the value of 60 guilders' but doesn’t clarify if that was in coins, native currency, food, or other goods. The letter makes no mention of beads. In contrast, the purchase of Staten Island a few decades later has more documentation, including the deed, which describes the Dutch giving '10 boxes of shirts, 10 ells of red cloth, 30 pounds of powder, 30 pairs of socks, 2 pieces of duffel, some awls, 10 muskets, 30 kettles, 25 adzes, 10 bars of lead, 50 axes, and some knives.' If the Manhattan trade involved similar goods, the Native Americans may have received valuable items, including some of the best technology of that time.
Also absent from the deed or any additional records are details about potential intangible items that might have been exchanged as part of the 60 guilders’ worth of goods. The early Dutch settlements in the region were focused on the fur trade, and whichever tribe engaged in the Manhattan deal might have expected the Dutch as future trading partners and allies, which could have made the transaction even more favorable for them.
Sale or Lease?
One additional factor to consider, which adds further complexity to the story of the Manhattan transaction, is the difference in how Europeans and Native Americans viewed land ownership. The deal might seem particularly one-sided, especially beyond the low price, due to the widespread belief that Native Americans didn’t see land as property or something that could be traded, and were unaware of what they were agreeing to. However, that’s not entirely true. According to Robert J. Miller, an expert in American Indian law at the Lewis & Clark Law School, in the Oregon Law Review, 'European settlers and early Americans misunderstood tribal economies and property rights. Even today, there’s a prevalent misconception that American Indian cultures have never understood private property ownership or capitalist economic activities. This idea is entirely incorrect.'
In fact, Miller explains, American Indians were actively engaged in free-market trade both before and after their first encounters with Europeans. While most land was considered tribal property, belonging to the tribe or to its members collectively, many tribes also recognized permanent or semi-permanent private land rights. Individual tribal members could, and did, acquire and use rights over specific plots of land (both tribal and otherwise), homes, and valuable resources like berry patches and fruit trees, either through inheritance or through buying and selling.
In Law in American History: Volume 1, law professor G. Edward White suggests that the Manhattan 'sale,' from the perspective of the Native Americans, wasn’t about surrendering the island but rather about allowing the Dutch to settle alongside them. He interprets it in the context of a property system distinct from the European one, but still existent. White believes that the Native Americans 'allowed the Dutch to exercise what they understood as hunting or use rights on the island,' while retaining their own ongoing rights. In this case, the deal may have been far more favorable for the Native Americans than the traditional narrative implies.
