Guam was discovered by Magellan in 1521, was occupied by Spain in 1688, was captured by the United States cruiser " Charleston " in June 1899, and was ceded to the United States by the Treaty of Paris on the l0th of December 1898. The island was inhabited by the Chamorro people who are the descendants of sea farers who first discovered the island thousands of years before Magellan.
The 1910 Catholic Encyclopedia wrote, "Guam is 32 miles long, from 3 to 10 miles broad, and about 200 sq. miles in area. Of its total population of 11,490 (11,159 natives), Agana, the capital, contains about 7,000. Possessing a good harbour, the island serves as a United States naval station, the naval commandant acting also as governor. The products of the island are maize, copra, rice, sugar, and valuable timber."
Captured by the Japanese in 1941, it was retaken by the US three years later. The Japanese military occupation lasted from 1941 to 1944 and was a brutal experience for the Chamorro people, whose loyalty to the United States became a point of contention with the Japanese. Some American servicemen were still on the island and were hidden by the Chamorro people. The Battle of Guam started on July 21, 1944 with American troops landing on the island and Guam was liberated from Japanese military rule on August 10 in an Allied victory. The military installation on the island is one of the most strategically important US bases in the Pacific.
Guam is an organized, unincorporated territory of the US with policy relations between Guam and the US under the jurisdiction of the Office of Insular Affairs, US Department of the Interior. Citizens of Guam are also American citizens.
The economy depends on US military spending, tourism, and the export of fish and handicrafts. Total US grants, wage payments, and procurement outlays amounted to $1 billion in 1998. Over the past 20 years, the tourist industry has grown rapidly, creating a construction boom for new hotels and the expansion of older ones. More than 1 million tourists visit Guam each year. The industry had recently suffered setbacks because of the continuing Japanese slowdown; the Japanese normally make up almost 90% of the tourists. Most food and industrial goods are imported. Guam faces the problem of building up the civilian economic sector to offset the impact of military downsizing.
Guam receives large transfer payments from the US Federal Treasury ($143 million in 1997) into which Guamanians pay no income or excise taxes; under the provisions of a special law of Congress, the Guam Treasury, rather than the US Treasury, receives federal income taxes paid by military and civilian Federal employees stationed in Guam (2001 est.).