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THE CAYMAN ISLANDS ARE A GROUP OF ISLANDS SITUATED ALMOST IN THE middle of the Caribbean, 480 miles (772 km) southwest of Miami. There are three islands in this British Crown Colony, each different in character. The biggest island, Grand Cayman, is the home of the capital, George Town, as well as Seven Mile Beach, one of the most famous in the Caribbean. Tourism and offshore finance have given the island's 31,000 inhabitants one of the highest per capita incomes in the region. About 90 miles (145 km) to the northeast lie the two sister islands of Cayman Brac and Little Cayman both comparatively undeveloped.

The three islands share a similar appearance - relatively flat, mostly covered with dry scrub. The Caymans sit on the edge of the Cayman Trench, a massive trough that drops some 25,000 feet (7,620 m) into the deepest part of the Caribbean Sea. The reef walls that surround the islands descend into the depths and attract scuba divers from all over the world. Divers call it the Underwater Capital of the Caribbean. The islands are probably one of the world's most successful sport diving destinations, thanks largely to marine conservation policies that have evolved from a simple ban on spear fishing in the early 1980s to the creation of marine parks and a comprehensive network of mooring buoys in the 1990s.

Diving is the backbone of the islands' tourism industry, with around 80,000 divers visiting annually. The Caymans' most popular dive site, Stingray City, off Grand Cayman, generates about a million dollars a year. This spectacular underwater attraction is unique in the Caribbean, with around 30 or more friendly stingrays coming in to be handled and stroked in the shallow waters of the North Sound. Because this experience takes place in depths of just 3-12 feet (1-I m), it is also accessible to snorkelers.

The first European sighting of the islands was by Columbus on May 10, 1503, when he was blown off course on his way to Hispaniola. The explorer spotted the two smaller islands, Cayman Brae and Little Cayman. Although he didn't stop to explore, Columbus noted the enormous numbers of turtles in the surrounding waters and named the islands Las Tortugas. Over the next hundred years or so they came to he known as Las Caveman's. from the Carib name for the saltwater crocodiles that were also abundant around the islands.

In the 16th century, Dutch, French, English, and Spanish sailors used the islands as places to take on water and capture sea turtles, an abundant source of fresh meat for the long sea voyage back to Europe. Even though Sir Francis Drake visited Grand Cayman in 1586 and reported that the caymanas were edible, the islands remained unclaimed and uninhabited.

The Cayman Islands came under English jurisdiction in 1655, when England took Jamaica and neighboring islands from the Spanish; they were formally recognized as British territory in 1670. In the mid-1660s the first settlers arrived from Jamaica, setting up semi permanent habitations on Little Cayman and Cayman Brac to trade turtles, vegetables, water, wood, and coconuts with passing ships. Grand Cayman, which offered better protection from pirate attacks, was settled beginning in 1700.

The Caymans developed a maritime economy. By the late 1800s up to one-third of the population was employed as merchant sailors, fishermen, or turtle catchers. The islanders rescued numerous mariners shipwrecked on the offshore reefs and salvaged lumber and cargo to build their houses and supply other needs. Over the course of time, however, a growing sense of self-sufficiency began to take hold among the islanders. They began to turn from salvage to construction. By the 1780s the Caymanians were building their own schooners and becoming renowned throughout the Caribbean as master boat builders. Shipbuilding prospered for more than 150 years, until the final launching of a traditional Caymanian ship in January 1967.

 Although the first legislative assembly was formed in 1832, the islands remained a dependency of Jamaica until 1959. Following Jamaica's independence from Britain in 1962, the Caymans chose to remain a British Crown Colony. In 1966 they introduced landmark legislation to encourage the growth of the offshore banking industry, today one of the mainstays of the economy. The first tourists arrived on board the cruise ship Atlantis in 1937, and in 1953 the first airfield opened on Grand Cayman. Today the islands receive more than 300,000 visitors every year.

According to accepted wisdom the Cayman Islands' tax-free status is thanks to the Wreck of the Ten Sails. In 1794 a convoy of ten merchant ships from Jamaica wrecked on the reefs of Grand Cayman's east end, but thanks to the brave efforts of the local settlers, everybody was saved. Legend has it that a member of the British royal family was on board and in gratitude King George III proclaimed that the islanders should never be taxed. This is a colorful tale-but untrue. In fact, the income tax was abolished in 1971 by the Finance Ministry in order to kick-start a sluggish economy. The policy eventually paid off, and today the Caymans are the world's fifth largest offshore banking center.

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