US Virgin Islands: Historic Overview

The Virgin Islands appeared on the world map in 1493, when Columbus spotted the archipelago of islands. Inspired by the legend of St. Ursula and her 11,000 martyred virgins and the number of islands in the chain, Columbus named the islands ‘Las Once Mil Virgenes’. The original inhabitants of the islands, the Caribs, reacted with hostile action to Columbus’ visit. What followed was a series of unsuccessful attempts by the English, French and the Spanish to establish permanent settlements on the islands. It was in the late 17th century that the Dutch West India Company finally established itself in St. Thomas and St. John. They later purchased St. Croix from the French and united the three islands to form the Danish West Indies under the Danish rule. The sugar industry flourished and consequently slave trade prospered. At one point of time, Charlotte Amalie housed the largest slave trade market.

In 1802, Denmark abolished slave trade, the first European country to do so. Illegal trade continued and spurts of British occupation ensured its survival.

Mid-19th century witnessed economic decline with fall in sugar prices, droughts, hurricanes and abolition of slave trade, which meant a rise in labour costs. The downward slide continued as the First World War brought with it unemployment and inflation. As the liabilities of the islands’ mounted against their economic benefits, in 1917 Denmark sold the islands to USA (for a sum of YS$ 35 million in gold) that was looking for a naval base in the Caribbean for security reasons. But it was not until 1931 that the islands were removed from Naval jurisdiction and placed under the US department of Interiors. It was the ruinous hurricane of 1928 and the economic depression of 1929, which brought to notice the depressive economic, social and political problems of the Virgin Islands. In 1932, US citizenship was granted to the islanders.

Foundations for economic growth were laid and the Second World War proved to be a boom for the rum and sugar industry. But with the end of the War, economic growth graph dipped once again. With the tourism restrictions on Cuba, US Virgin Islands emerged as the most popular Caribbean destination for the Americans. Today, the economy of US Virgin Islands is heavily dependent on tourism.

Politically, the islands are an unincorporated territory under the US flag and Home Rule was granted in 1970.