During the 17th century, the archipelago was divided into two territorial units, one English and the other Danish. Sugarcane, produced by slave labor, drove the islands' economy during the 18th and early 19th centuries. In 1917, the US purchased the Danish portion, which had been in economic decline since the abolition of slavery in 1848.
The Virgin Islands were originally settled by the Ciboney, Carib, and Arawaks. The islands were named by Christopher Columbus on his second voyage in 1493. Over the next three hundred years, the islands were held by many European powers, including Spain, England, Holland, France, the Knights of Malta, and Denmark.
The Danish West India Company settled on Saint Thomas in 1672, on Saint John in 1694, and purchased Saint Croix from the French in 1733. The islands became royal Danish colonies in 1754. Sugarcane, produced by slave labor, drove the islands' economy during the 18th and early 19th centuries, until the abolition of slavery by Governor Peter von Scholten on July 3, 1848.
During the submarine warfare phases of the First World War, the USA, fearing that the islands might be seized by Germany as a submarine base, approached Denmark to sell the islands to the USA. On January 17, 1917, the United States bought the Danish West Indies for $25 million and took possession of the islands on March 31. The Danish Crown may have felt pressure to accept the sale, thinking
that the USA would seize the islands, if Denmark was invaded by Germany. US citizenship was later granted to the inhabitants of the islands in 1927.
The islands are currently an organized, unincorporated territory of the US with policy relations between the Virgin Islands and the US under the jurisdiction of the Office of Insular Affairs, US Department of the Interior.
Tourism is the primary economic activity, accounting for 80% of GDP and employment. The islands normally host 2 million visitors a year. The manufacturing sector consists of petroleum refining, textiles, electronics, pharmaceuticals, and watch assembly. The agricultural sector is small, with most food being imported. International business and financial services are a small but growing
component of the economy. One of the world's largest petroleum refineries is at Saint Croix. The islands are subject to substantial damage from storms. The government is working to improve fiscal discipline, to support construction projects in the private sector, to expand tourist facilities, to reduce crime, and to protect the environment.
The U.S. Virgin Islands are known for their white sand beaches, including Magens Bay and Trunk Bay, and strategic harbors, including Charlotte Amalie and Christiansted. Most of the islands, including Saint Thomas, are volcanic in origin and hilly. The highest point is Crown Mountain, Saint Thomas (474m). Saint Croix, the largest of the U.S. Virgin Islands, lies to the south and has a flatter
terrain. The National Park Service owns more than half of Saint John, nearly all of Hassel Island, and many acres of coral reef.