First Inhabitants

The first known inhabitants were Taino Indians. There were four Indian campsites on Water Island, none of which were very large. Evidence of their habitation is revealed by Indian artifacts, including pieces of pottery, tools, piles of sea shells (contents consumed for food), charcoal and human bones.

The oldest inhabited site in the US Virgin islands in at Krum Bay - directly opposite Water Island.

The English archeological magazine "Man" carries an account of a number of skeletons of Indians that were found on Water Island during excavation work in 1934 and 1935. Subsequent analysis of charcoal from these Indian settlements indicates that these Indians lived on Water Island about 500 years ago.

It is not definitely known who the first white persons were who lived on Water Island. It is known that the pirates used to anchor in its bays out of range of the guns of the Danish Fort on St. Thomas and lie in wait for merchant vessels that were entering or leaving the port of St. Thomas.

There were several transactions recorded in June 1830 when Plantation La Providence with buildings on Water Island was sold to Joseph Daniel. In 1851 there is a record of a deed to Joseph Daniel.

The eastern part of Water Island is called Caroline Lyst. In December 1859, this section was deeded to Joseph Daniel. This Joseph Daniel (the great grandfather of Christopher V. Daniel) was of Italian ancestry. He came to St. Thomas and changed his name to Daniel from the Italian D'Angielli. He owned and operated a shipyard in St. Thomas harbor.

During the War of 1812, the British occupied St. Thomas and used his shipyard to repair their ships and as headquarters for their efforts to suppress piracy. When the British were leaving St. Thomas, in recognition of his services, they gave Water Island to Joseph Daniel and made him a British subject. No record of this transaction is shown on the record of real estate transactions.

Upon the death of Joseph Daniel,  Water Island passed to his five heirs but one of his sons, Christopher Daniel, administered the property as representative of the other heirs. During the time the Daniel family owned Water Island there was a boat landing on Providence Point at the place where the present Ferry Dock is located.

Treasure On Water Island

There were many rumors of treasure being buried on Water Island by the pirates to preclude its capture by the British and American warships which were constantly on the lookout for the pirates. Several attempts to recover this South American gold were made but without success. In the 1890's a stranger produced a rough chart of one of the bays of Water Island showing by a cross where a trunk containing doubloons had been buried by the stranger's father, who had been quartermaster of a pirate ship. The stranger suggested to Christopher Daniel that they join together and make an attempt to recover this buried treasure.

Daniel declined and several days later the stranger and his boat disappeared.  Christopher Daniel organized a search party and went to the area where the treasure was supposed to be buried, which was on Flamingo Bay shore. There they found a sizable excavation about 4 feet deep and the remains of an old leather trunk. When Christopher Daniel turned the trunk over, one gold doubloon dropped out on the ground. He figured that the treasurer hunter had found the treasure and left one coin to indicate that he had found it.

The weight of the coins had made an impression on the sides and bottom of the trunk and careful measurements were made of these, from which it was calculated that the value of the treasure was between $50.000 and $60,000 (in a time when gold was $16 per ounce) It was presumed that the stranger had skipped town because under Danish law, one half of any buried treasure went to the Danish Crown. Whenever Christopher Daniel would tell the story, he would always produce his gold doubloon.

Recent History

In 1905 the West Indian Co. Ltd. conceived the idea of making a business out of permitting foreign governments to use Water Island for maneuvers. Through their lawyer, Mr. Jorgensen. they made an offer of $21,000 for Water Island. Christopher Daniel did not wish to sell but was over-ruled by the other kin and the sale took place.

In 1917, The United States bought the Virgin Islands, including Water Island, and stopped its use as a foreign navy training ground.  The West Indian Co., Ltd. made no attempt to develop Water lsland. From 1917 to 1944 was a time of quiet.

In June, 1944, the United States government, using its power of eminent domain, acquired title to Water Island for the sum of $10,000. It is ironic that the West Indian Company. Ltd.. held Water Island for 39 years, and sold it for less than half the sum they paid for it.

The U.S. Government began the construction of an Army base on Water Island. An underground fort and some 33 buildings were under construction, as well as docks, roads, water, sewer, and electric systems, when World War II ended. Construction stopped and the troops were withdrawn.  In 1950, the island was abandoned.

Walter Phillips and the Hotel

The Phillips' built a hotel in the Army buildings and converted many facilities to apartments and rooms.  They groomed the beach and developed the system of roads. They subleased plots to friends who built houses - all knowing that the master lease would eventually expire. 

In December 1965,  Phillips sold the master lease for Water Island. its physical assets and its rights and obligations under the subleases to the Water Isle Hotel & Beach Club. Inc. whose president is Edward McArdle. He built a much enlarged hotel and made it a four star operation.   He built and sold some private villas.  Hurracaine Hugo struck and damaged the hotel with only two years left on the lease.  McArdle terminated his lease three days before it was to expire and McArdle has been trying to recover the value of his improvements.  The remainder of the houses are under self management.