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In the early 18th century, more than 3000 white settlers lived in town, and sugar production and slave trading were the economic mainstay.
After the Danish government wanted direct administration of the archipelago in 1754, the capital was moved from Charlotte Amalie to Christiansted on the island of Saint Croix.
By 1778, the Danish government had strengthened their military position by building Bluebeard’s Castle and Blackbeard's Castle, lookout towers on the crests of the two hills by the city.
The city prospered as a free port and American, Danish, Sephardic, German, French, British, Italian and Spanish importing houses operated here.
That partly made the economy in town to transition from slave trading and agriculture to general commerce.
In 1691, the town was renamed to Amalienborg (in English Charlotte Amalie) after Charlotte Amalie of Hesse-Kassel (1650–1714), queen consort to King Christian V of Denmark-Norway. When Christopher Columbus came here in 1493, the area was inhabited by Island Caribs and Taíno.
In the end of the 18th century, American founding father and future architect of the American Constitution, Alexander Hamilton, decided the town was so wealthy that “gold moved through the streets in wheel-barrows”.
A growing share of the West Indian trade passed through the port in the beginning of the 1800s, and the rise of steamships made Charlotte Amalie an ideal coaling station for ships sailing between North- and South America.
As the Spanish early focused their energy on Puerto Rico and other Caribbean Islands, Saint Thomas remained unprotected for a long time, leaving Charlotte Amalie’s sheltered coves to be frequented by pirates, including Bluebeard and Blackbeard, as well as mariners and European settlers.
The Danish West India Company chartered Charlotte Amalie in 1671 after King Christian V decided to secure them for plantations.