Which incredibly common, everyday holiday baking spice was historically so valuable that it was directly traded for the island of Manhattan?

The Spice Behind the Manhattan Exchange

The spice was nutmeg, the fragrant seed grated into pies, cookies, and holiday drinks. In the 1600s, it came chiefly from a small group of Indonesian islands, making control of its supply a source of enormous commercial power.

That helps explain an unusual territorial swap. In the 1667 Treaty of Breda, the English kept New Amsterdam—the Dutch settlement on Manhattan that they had captured and renamed New York—while the Dutch retained the island of Run in the Banda Islands, where nutmeg grew.

Why a Tiny Island Could Rival Manhattan

European traders prized nutmeg not just for its flavor but for the profits available when supply was tightly controlled. The Dutch fought to dominate the Banda Islands’ spice trade; Run mattered because its nutmeg trees could feed that lucrative business. Manhattan, meanwhile, was a growing colonial settlement, but its future commercial importance was not yet obvious.

The treaty settled a war by confirming each side’s hold over territories it had seized. So the exchange was not simply a formal sale of Manhattan for a sack of spice: the Dutch gave up New Amsterdam while securing their claim to a nutmeg-producing island. The bargain shows how, in an age of empire, a small island’s control over a coveted crop could outweigh a settlement on the other side of the Atlantic.