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The area that first became New Amsterdam, and eventually New York City, was first referred to as Man-A-Hat-Ta, by the local Indians. The name meant "Heavenly land". It was first visited by the French explorer Giovanni da Verrazzano in 1524. Verrazzano explored much of America's northeast coast, including the waters around New York City and Long Island. Today, one of the world's longest bridges, the Verrazzano Narrows Bridge, in New York City, is named for him.

The first people to settle the area were the Dutch. Henry Hudson explored the region and named the world's largest tidal river, the Hudson River, after himself. Hudson's explorations, from Albany to New York City, provided the impetus for the Dutch to colonize the region. The Dutch quickly built a settlement and a network of roads. Some of the roads, such as Broadway and Pearl Street are still in use today.

Peter Minuet arrived the following year and bought Man-A-Hat Ta from the local Indians for about 24 dollars worth of beads and trinkets. Man-A-Hat Ta itself was not inhabited by Indians. Nevertheless, Man-A-Hat Ta became known as New Amsterdam and Minuet became its first governor. New Amsterdam's geographic location made it a popular destination for many. It welcomed settlers from all cultures and religions. The first Jewish synagogue in the New World was built at New Amsterdam in 1640. Dutch colonists soon spread out to areas surrounding New Amsterdam such as Long Island and parts of current upstate New York. Rapid growth and burgeoning populations resulted in widespread chaos throughout New Amsterdam. In 1647, Peter Stuyvesant was elected governor. Stuyvesant ruled the city in a stern manner for seventeen years which quelled the chaos and brought much success.

Soon, English Puritans emigrated from New England to New Amsterdam. The industrious Puritans quickly gained political and economic power and imposed strict rules upon the population including fines for singing and public whippings for more serious "offenses". After a series of natural disasters and phenomena struck such as a meteor, an earthquake, and unusually warm weather through the winter of 1663, the Dutch handed New Amsterdam over to the British when Charles II declared that all lands between the Delaware and Connecticut Rivers belonged to his brother James, the Duke of York. The Dutch, totally unprepared for war, immediately surrendered and signed the Anglo-Dutch Treaty when the English fleet entered the harbor to take the city. New Amsterdam, henceforth, became New York.