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 Amsterdam, which in March 1624 despatched the “New Netherland,” with the first permanent colonists (thirty families mostly Walloon), under Cornelis Jacobsen Mey, the first governor or director of the colony. Arriving at Manhattan early in May, a few of the men remained there, another small party established a temporary post (Fort Nassau) on the Delaware river, and still another began a fortified settlement on the site of the present Hartford, Connecticut. But more than one-half of the families proceeded up the Hudson to Fort Orange, the successor of Fort Nassau, at the mouth of Tawasentha Creek, and there founded what is now Albany. Three more vessels arrived in 1625, and when in that year Mey was succeeded as director by William Verhulst the colony had a population of 200 or more. The government of the province was fully established in 1626 and was vested mainly in a director-general and council. The director-general was formally appointed by the Company subject to the approval of the States-General, but the Amsterdam Chamber and the College of Nineteen supervised his administration. The members of the council were formally appointed by the Company, but the director-general actually determined who they should be, and as he was not bound by their advice they were no check to an autocratic rule. Peter Minuit, the first director-general, arrived with more colonists in May 1626, and soon afterwards Manhattan Island was bought from the Indians, Fort Amsterdam was erected at its lower end, and the settlement here was made the seat of government.

In 1629, chiefly to encourage agriculture, the Company issued its famous Charter of Privileges and Exemptions, which provided that any member might have anywhere in New Netherland except on Manhattan Island his choice of a tract of unoccupied land extending 16 m. along the seacoast or one side of a navigable river, or 8 m. along the river on both sides “and so far into the country as the situation of the occupyers will permit” by purchasing the same from the Indians and planting upon it a colony of fifty persons, upwards of 15 years old, within four years from the beginning of the undertaking, one-fourth part within one year; and that any private person might with the approval of the director-general and council take up as much land as he should be able to improve. The founder of a colony was styled a patroon, and, although the colonists were bound to him only by a voluntary contract for specified terms, the relations between them and the patroon during the continuance of the contract were in several important respects similar to those under the feudal system between the lord of a manor and his serfs. The patroon received his estate in perpetual inheritance and had the exclusive right of hunting and fishing upon it. Each colonist not only paid him a fixed rent, usually in kind, but had to share with him the increase of the stock and to have the grain ground at his mill. The patroon was the legal heir of all his colonists who died intestate. He had civil and criminal jurisdiction within the boundaries of his estate; he could create offices, found cities, and appoint officers and magistrates, and, although the charter permitted an appeal from his court to the director-general and council in any case in which the amount in dispute exceeded fifty guilders ($20), some of the patroons exacted from their colonists a promise not to avail themselves of the privilege. The Company promised to permit the patroons to engage in the fur trade, wherever it had no commissary of its own, subject to a tax of one guilder (40 cents) on each skin, and to engage in other trade along the coast from Newfoundland to Florida subject to a tax of 5% on goods shipped to Europe. The colonists of the patroons were exempted from all taxes for a period of ten years, but were forbidden to manufacture any cloth whatever. The charter did not give the encouragement to agriculture that was expected of it because the status created for colonists of a patroon was no attraction to a successful farmer in the Netherlands. Immediately after the issue of the charter a few of the more adroit directors of the Amsterdam Chamber hastened to acquire for themselves, as patroons, the tracts of land most favourably situated for trade. On both sides of the entrance to Delaware Bay Samuel Godyn, Samuel Blomaert and five other directors who were admitted to partnership in the second year (1630) established the manor and colony of Swaanendael; on a tract opposite the lower end of Manhattan Island and including Staten Island, Michael Pauw established the manor and colony of Pavonia; on both sides of the Hudson and extending in all directions from Fort Orange (Albany) Kilian van Rensselaer established the manor and colony of Rensselaerwyck. The colony of Swaanendael was destroyed by the Indians in 1632. Pauw maintained his colony of Pavonia for about seven years and then sold out to the Company. The colony of Rensselaerwyck was the only one that prospered under the patroon system. In the meantime the patroons had claimed unrestricted rights of trade within the boundaries of their estates. These were stoutly denied by the Company. Director-General Minuit was recalled in 1632 on the ground that he had been partial to the patroons; and Wouter van Twiller, who arrived in 1633, endeavoured to promote only the selfish commercial policy of the Company; at the close of his administration (1637) the affairs of the province were in a ruinous condition.

William Kieft was appointed director-general late in 1637, and in 1638 the Company abandoned its monopoly of trade in New Netherland and gave notice that all inhabitants of the United Provinces, and of friendly countries, might trade there subject to an import duty of 10%, an export duty of 15%, and to the requirement that the goods should be carried in the Company’s ships. At the same time the director-general was instructed to issue to any immigrant applying for land a patent for as large a farm as he required for cultivation and pasturage, to be free of all charges for ten years and thereafter subject only to a quit-rent of one-tenth of the produce. Two years later, by a revision of the Charter of Privileges and Exemptions, the prohibition on manufactures was abolished, the privileges of the original charter with respect to patroons were extended to “all good inhabitants of the Netherlands,” and the estate of a patroon was limited to 4 m. along the coast or a navigable river and 8 m. back into the country. The revised charter also provided that any one who brought over five colonists and established them in a new settlement should receive 200 acres, and if such a settlement grew to be a town or village it should receive a grant of municipal government. These inducements encouraged immigration not only from the Fatherland but from New England and Virginia. But the freedom of trade promoted dangerous relations with the Indians, and an attempt of Kieft to collect a tribute from the Algonquian tribes in the vicinity of Manhattan Island and other indiscretions of this officer provoked Indian hostilities (1641–1645), during which most of the outlying settlements were laid waste.

Out of this warfare arose an organized movement for a government in which the colonists should have a voice. In August 1641 Kieft called an assembly of the heads of families in the neighbourhood of Fort Amsterdam to consider the question of peace or war. The assembly chose a board of Twelve Men to represent it, and a few months later this board demanded certain reforms, especially that the membership of the director-general’s council should be increased from one to five by the popular election of four members. Kieft promised the concessions to gain the board’s consent to waging war, but later denied its authority to exact promises from him and dissolved it. At another crisis, in 1643, he was obliged to call a second assembly of the people. This time a board of Eight Men was chosen to confer with him. It denied his right to levy certain war taxes, and when it had in vain protested to him against his arbitrary measures it sent a petition, in 1644, to the States-General for his recall, and this was granted. (q.v.), his successor, arrived at Fort Amsterdam in May 1647. Under his rule there was a return of prosperity; from 1653 to 1664 the population of the province increased from 2000 to 10,000. Stuyvesant was, however, extremely arbitrary. Although he permitted the existence of a board of Nine Men to act as “tribunes” for the people it was originally composed of his selections from eighteen persons chosen at a popular election, and annually thereafter the places of six retiring members were filled by his selections from twelve persons nominated by the board. He treated it with increasing