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Like so many of the Caribbean islands, the history of civilization goes back quite far in the Virgin Islands. They were originally inhabited by tribes of Arawaks and Carib peoples. Again, like many islands and continents for that matter, it was Christopher Columbus who discovered the Virgin Islands, in 1493. As with many other of his discovered areas, Columbus called the people Indians, still belieiving for some time that he had indeed, made it to India.
Columbus was a busy man however, he and his troupes did not put a lot of energy into the Virgin Islands at the time. They went on for new discoveries and to deal with issues in their homeland. But over time, when more Europeans began making the journey to the islands, many of them living in Puerto Rico, the Virgin Islands began to be inhabited. The diseases they brought with them caused major problems for the islanders who had come long before them. Aside from disease, the Europeans forced many of them into labor; because of this, many left the Virgin Islands for good. Peter Island was only capable of cotton as the soil didn't support other agriculture.
But Peter Island was also a hotspot for pirate activity. When the Spaniards were focusing their attention elsewhere, pirates were invading the islands. Deadman's Island right off of Deadman's Bay is supposedly where the famous pirate "Blackbeard" left a group of men with just a cask of rum and a sword. This was the story behind "Yo ho Yo ho and a bottle of Rum" as well as the name it bears now.
Later a group of Germans inhabited Peter Island only to be forced out by Danes. Cotton plantations continued to do well for some time until the abolition of slavery and from there the major business of the island would start to turn toward tourism.
In more recent years, the island was puchased first by an incredibly rich Norwegian and then two rich businessmen from Michigan. Today JVA Enterprises actually claims it as their private island.