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Before it was settled by Europeans, Salem was inhabited for centuries by Native Americans who knew it as "Naumkeag," a word meaning "good place to fish." The area was settled by Puritans within two decades of the landing at Plymouth Rock and quickly grew into a prominent port town in the American colonies.
Much is made of the town's witchcraft hysteria in 1692, where some young girls took advantage of the era's tendency towards religious fanaticism and accused some local women of being witches, many of whom were later hanged. One man, Giles Corey, was pressed to death with heavy rocks and some say that as he died, he placed a curse on Salem and that his ghost can occasionally still be seen in one of the local burying grounds. The witchcraft hysteria only really stopped when the girls went too far and accused the wife of the Massachusetts colony Governor of being a witch too.
The city was also well known as a leading port well into the 1800s, and its merchants grew rich trading with India, China, and other exotic locations. Some of the treasures they brought back can be seen at the Peabody Essex Museum to this day.
One interesting historical footnote about Salem is Leslie's Retreat, which took place in February of 1775, two months before the battle of Lexington and Concord that started the Revolutionary War. The British Colonel Leslie had heard that American munitions were being stored in Salem and he brought some men to seize them. However, when he got there the townspeople would not lift up the bridge to let him into the city, and instead a standoff ensued with much jeering and tension. Rather than touch off the inevitable violent scenario, Leslie ordered his men to withdraw, much to the joy of the Salem residents, further emboldening the patriot cause. If Leslie had acted differently that day, he could have ended up touching off the first battle of the American Revolution.
In 1877, Alexander Graham Bell held the first public demonstration of the telephone in Salem. Salem would later grow into a major manufacturing center and in 1914 much of its downtown area was destroyed by a great fire. Today the city is a major tourist destination.