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In the year 1460, the ambitious duke Bernhard I of Braunschweig-Lüneburg, who had inherited most lands of the Welfs, decided to enter the colonial race (with the help of the Hanseatic League cities Hamburg and Bremen), sent a ship to Atlantis. After his captain had been evicted from several places taken by other nations, he founded a colony at the site of OTL Philadelphia, called Martinsburg (named after Saint Martin).
While the city was overshadowed in trade and population for centuries by other colonial cities like Boston (New England), Haraldsborg and Roma Nuova (Italia Nuova), the city found a niche for itself by building ships for the other nations in its dockyards.
Martinsburg took an upswing when Denmark-Braunschweig united the Atlantean colonies of the Netherlands and England under its rule (1642, the colonies of Martinsburg, Waldstätten, Nieuw-Nederland, Haraldsborg and Anderland were united under a common administration), and even more when after the anti-French War northern Louisiane fell to it in the peace of Amsterdam.
In the sea battle of Martinsburg November 1689, the Danish fleet was destroyed by English and Italians.
When Denmark-Braunschweig was defeated and subsequently dismembered in the Third French Republican War, in 1795 the "Schulzenaufstand" (Mayors' Uprising - yes, "Schulze" is an old German term for "Bürgermeister" / Mayor) happened in German Atlantis. They declared themselves independent, formed a confederation similar to Switzerland. Martinsburg became the new capital.