First settled by the French in the early 17th century, the islands represent the sole remaining vestige of France's once vast North American possessions.
The 1912 Catholic Encyclopedia wrote, "Known to the earliest Breton and Basque fishermen, this group already bore its present name when Jacques Cartier identified it in 1535, The first settlement dates from 1604. In 1689 Bishop St-Vallier visited it from Placentia, blessed a chapel, and left a priest in charge. The Recollects sent to Placentia (1691) attended this mission. The islands were successively ceded to England (Treaty of Utrecht, 1712), restored to France (Treaty of Paris, 1763), thrice captured by the English (1778, 1793, and 1808), and thrice retroceded to France (Treaties of Versailles, 1783, of Amiens, 1802, and of Ghent, 1814). Many Acadians fled thither after the dispersion of Grand Pré (1755) and the fall of Louisbourg (1757)."
"The first missionaries who came after the Treaty of Paris were the Jesuits Bonnecamp and Ardilliers, with dubious jurisdiction from the Bishop of La Rochelle (1765). The islands now separated from the jurisdiction of Quebec were erected by Propaganda into a prefecture Apostolic, and formed the first mission confided by Rome to the Seminary of the Holy Ghost. MM. Girard, prefect, and de Manach, who sailed the same year, were driven by a storm to Martinique. They were replaced (1766) by MM. Becquet and Paradis, likewise of the Holy Ghost Seminary, or Spiritains, as well as several of the following. In 1775 the prefect, M. Paradis, with his companion and 300 families were expelled by the English. M. de Longueville succeeded him in 1788. In 1792 M. Allain, vice-prefect, and his companion, M. Le Jamtel, were forced by the French Revolution to leave for the Magdalen Islands, with a number of Acadians who, remaining faithful to the King of France, refused to take the oath of the Constitution. The former inhabitants returning in 1816, M. Ollivier, who accompanied them, applied for jurisdiction to the Bishop of Quebec. He was appointed vice-prefect in 1820. His successors, with the same title, were MM. Charlot (1841), Le Helloco (1854), Le Tournoux (1864), Tiberi (1893); the two last named belonged to the newly-restored Congregation of the Holy Ghost."
The islands were used during American Prohibition as a base for smuggling liquor into the United States by many gangsters including Al Capone and Bill McCoy.
After Germany invaded most of Europe during World War II, the islands were controlled by Vichy France. On Christmas Day 1941, Free French forces led by Rear-Admiral Émile Muselier liberated the islands on behalf of Charles de Gaulle. Saint-Pierre and Miquelon became the focus of a serious rift between Free French forces and the United States Department of State, which was courting Vichy France and sent ships to take the islands back.
The islands became a full département d'outre mer of France in 1976. This status was modified in 1985 and the islands became a territory with special status.
The inhabitants have traditionally earned their livelihood by fishing and by servicing fishing fleets operating off the coast of Newfoundland. The economy has been declining, however, because of disputes with Canada over fishing quotas and a steady decline in the number of ships stopping at Saint Pierre. In 1992, an arbitration panel awarded the islands an exclusive economic zone of 12,348 sq km to settle a longstanding territorial dispute with Canada, although it represents only 25% of what France had sought. The islands are heavily subsidized by France to the great betterment of living standards. The government hopes an expansion of tourism will boost economic prospects. Recent test drilling for oil may pave the way for development of the energy sector.
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