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The Federated States of Micronesia are located on the Caroline Islands in the western Pacific Ocean. The ancestors of the Micronesians settled there over 4,000 years ago. A decentralized chieftain-based system eventually evolved into a more centralized economic and religious empire centered on Yap. European explorers - first the Portuguese in search of the Spice Islands (Indonesia) and then the Spanish - reached the Carolines in the 16th century, with the Spanish establishing sovereignty.

In 1914 German administration ended when the Japanese navy took military possession of the Marshall, Caroline and Northern Mariana Islands. Japan began its formal administration under a League of Nations mandate in 1920. During this period, extensive settlement resulted in a Japanese population of over 100,000 throughout Micronesia while the indigenous population was about 40,000. Sugar cane, mining, fishing and tropical agriculture became the major industries.

World War II brought an abrupt end to the relative prosperity experienced during Japanese civil administration. By the War's conclusion most infrastructure had been laid waste by bombing, and the islands and people had been exploited by the Japanese Military to the point of impoverishment.

The United Nations created the Trust Territory of the Pacific Islands (TTPI) in 1947. Ponape (then including Kusaie), Truk, Yap, Palau, the Marshall Islands and the Northern Mariana Islands, together constituted the TTPI. The United States accepted the role of Trustee of this, the only United Nations Trusteeship to be designated as a "Security Trusteeship," whose ultimate disposition was to be determined by the UN Security Council. As Trustee the US was to "promote the economic advancement and self-sufficiency of the inhabitants."

On May 10, 1979, four of the Trust Territory districts ratified a new constitution to become the Federated States of Micronesia. The neighboring trust districts of Palau, the Marshall Islands, and the Northern Mariana Islands chose not to participate. The Honorable Tosiwo Nakayama, the former President of the Congress of Micronesia, became the first President of the FSM and formed his Cabinet. The FSM signed a Compact of Free Association with the U.S., which entered into force on November 3, 1986, marking Micronesia's emergence from trusteeship to independence. Under the Compact, the U.S. has full authority and responsibility for the defense of the FSM. This security relationship can be changed or terminated by mutual agreement. The Compact provides U.S. grant funds and federal program assistance to the FSM. Amended financial assistance provisions came on-line in FY 2004. The basic relationship of free association continues indefinitely.

See also: Federated States of Micronesia

• U.S. State Department Background Note: Micronesia

v • d • e History of Oceania
Australasia	Australia · Norfolk Island · Christmas Island · Cocos (Keeling) Islands · New Zealand
Melanesia	East Timor1 · Fiji · Indonesia1 · New Caledonia · Papua New Guinea · Solomon Islands · Vanuatu
Micronesia	Guam · Kiribati · Marshall Islands · Northern Mariana Islands · Federated States of Micronesia · Nauru · Palau
Polynesia	American Samoa · Cook Islands · French Polynesia · Niue · Pitcairn · Samoa · Tokelau · Tonga · Tuvalu · Wallis and Futuna
1 countries spanning more than one continent