Amsterdam was founded around 1250 with the building of the Dam that gave it its name. ‘Aeme Stelle Redamme’ is Medieval Dutch for: ‘Dam in a Watery Area’.

The Dam is still here and still functions as the heart of the city. But today this former barrier between the River Amstel and the “Southern Sea” is one of the few places in the center of town that you can't visit by boat .

[...] During the Middle Ages the first canals were dug for water management and defense. As the city expanded in the Middle Ages, successive defense moats ended up inside the walls and lost their function. But they acquired an important new one: local transport of merchandise. The warehouses along the old moats could store enormous quantities of trading goods that could be`pipelined through those moat-canals to a harbor full of ships that sailed all over the world that was known in those days.

In what is now called Amsterdam's Golden Age, the 17th century,the trade volume exploded. In one very ambitious expansion project that took 50 years, the 3 main canals of the city were dug and the houses around them were built. Completed around 1660, it made the city grow to 4 times its size and gave it the most intricate and efficient system of navigable waterways in the world. A maze of connecting canals brought merchandise from all over the world to the doorstep of every canal side merchant.

Amsterdam grew into one of the biggest cities of Northern Europe becoming also the world's most important financial center. Within 50 years, between 1585 - 1635, the city expanded far beyond the medieval defense walls. The circular rings of the canals were added. Hundreds of newly built townhouses of merchants were at the same time their businesses. In fact, often the warehouse has been located on the upper floors or at the back of the townhouse.

The scale of the commercial and shipping activity has been enormous. Only in one direction of the Mediterranean, each year more than 400 ships were leaving the port of Amsterdam. Powerful Far East Company was trading as far as Africa, India, China, Japan and Indonesia. Large part of today's Brazil has been conquered. The main merchandise was grain, brought here from the Baltic Sea as well as spices, silks, cotton and china brought from the Far East. Amsterdam of that time was the city of tolerance. Here the printing of books in many languages took place, best maps were drawn, people like Descartes, who because of their ideas or religion were in danger in their own country, took refuge.

A fleet of thousands of small barges carried the goods from the big ships in the harbor to every corner of the city. More than a thousand warehouses on the canal-sides were supplied by these man-powered barges. On top of that, 9 specialized floating markets catered to the daily needs of 17th century Amsterdammers. In those days, more goods were moved on barges in the canals by human power, than would even be possible today with trucks along the canal sides.

The Amsterdam canal system is the result of conscious city planning. In the early 17th century, when immigration was at a peak, a comprehensive plan was developed that was based on four concentric half-circles of canals with their ends emerging at the IJ bay. Known as the Grachtengordel, three of the canals were mostly for residential development: the Herengracht (Gentlemen's or more accurately Patricians' Canal), Keizersgracht (Emperor's Canal), and Prinsengracht (Prince's Canal).

The fourth and outermost canal, the Singelgracht (not to be confused with the older Singel), served the purposes of defense and water management. The defenses took the form of a moat and earthen dikes, with gates at transit points, but otherwise no masonry superstructures. Furthermore, the plan envisaged: (1) Interconnecting canals along radii; (2) the creation of a set of parallel canals in the Jordaan quarter, primarily for transport purposes; (3) conversion of the Singel from a defense structure to a residential and commercial area; (4) the construction of more than one hundred bridges.[citation needed]

Construction started in 1613 and proceeded from west to east, across the breadth of the lay–out, like a gigantic windshield wiper as the historian Geert Mak calls it — and not from the centre outwards, as a popular myth has it. The canal construction in the southern sector was completed by 1656. Subsequently, the construction of residential buildings proceeded slowly. The eastern part of the concentric canal plan, covering the area between the Amstel river and the IJ bay, has never been implemented. In the following centuries, the land was used for parks, senior citizens' homes, theaters, other public facilities, and waterways without much planning.

The Lost Canals - Over the years, several canals have been filled in, becoming streets or squares, such as the Nieuwezijds Voorburgwal and the Spui. The 20th century needed space for cars and other land traffic. Many canals were filled in to make streets and parking spaces. Not without struggle: fierce protest had rescued the famous Seven Bridges of the Reguliersgracht already in 1901. But in 1955, a local police commissioner still submitted a serious proposal to the City Council to solve all traffic problems by filling up all the canals to make highways. He was almost tarred and feathered for it. Amsterdammers are fond of their Canals. Amsterdam Canals Today - Almost half of the original water in Amsterdam was lost to landfills, but a full 25 percent of the city's surface still consists of navigable waterways. With 65 miles of ancient canals, Amsterdam is still the most watery city in the world. Today, the only cargo vessel on the Amsterdam canals is a unique package boat of Courier service DHL, but that will change in the near future. In 2008, Mokum Mariteam 's first electrically powered cargo sloops will deliver their goods in and around the city. A serious and very timely project to help fight air pollution and alleviate traffic congestion on the streets.

Pleasure Boating - In the summertime, the canals can still be dense with sailing traffic. Strictly pleasure-cruising, privately and commercially. 15000 pleasure boats are registered in Amsterdam and the city is a favorite destination for private yachts from Germany and France. Eight local marina's serve their needs and two big new ones are under construction. A few times a year, at big events like the Queen's Day and the Gay Parade, traffic jams on the canals can get quite serious. Rest assured that on an average day, canal-tour boats dominate the scene on the usually quiet waterways.

Canal Cruises - An Amsterdam Canal Cruise is the most popular tourist attraction in the country according to a Dutch Government survey. A diverse fleet of around 200 tour boats reportedly carry more than 3 million passengers a year, offering a waterborne variety of almost every form of entertainment that's available in Amsterdam. From an intimate exclusive candlelight dinner with five star service on an antique ‘Saloonboat’ to Theatre Cruises and Disco Dances with Deejays and live music on party-boats. There is even a "smokers" cruse..but you are not supposed to know that ..oops!

Boat Rentals - If you want to explore the canals on your own, there are two options. One is to work for your mileage on a pedal-boat. Canal Company (www.canal.nl) has 200 of them available at 5 locations. Or you can experience the silent leisure of an electrically powered sloop.

Canal-side Terraces - Because of strict (we consider them misguided) municipal regulations, there are not many canal-side terraces in Amsterdam. The existing ones are popular for a good reason. It's fun to watch what happens on the water in the Summertime.

Houseboats - In the old days, when the canals were still used for transport of merchandise, living on a houseboat was a sign of poverty in Amsterdam. But as their transport function dwindled in the last century, the old 'industrial' canals became upmarket residential area's. Old warehouses on the canal sides were converted to Deluxe apartment complexes. The barges that supplied them began a new life as comfortable houseboats with ample living spaces in their former cargo holds. They are all quite old. The oldest one was built in 1840 as a water boat for fresh drinking water (Prinsengracht/Amstelveld). Many have been afloat for more than a century. Relative newcomers are the house-arks, floating bungalows that are usually built on a hollow concrete platform. These meet with increasing disapproval from local residents and Civil Authorities, who would like to see them move to canals with less historical importance in the suburbs.

Most of the houseboats are private residences. Because of strict regulations, only a few have lodging space for rent legally. Because the demand is high, the city may ease up the rules in the future.

Clean Water ...now ...finally! - Water management is still the most important function of our canals. Without them, the city would drown. Circulating the water is also vital for sanitary reasons. In the days when windmills had to do the job, the stench of the water could become unbearable in periods with little wind or rain. One canal was even filled in for its stench by Royal Decree, from the only King who ever lived in Amsterdam.

Napoleon Bonaparte's brother Louis was King of Holland between 1806 and 1811. He had City Hall on Dam Square rebuilt to be his palace. The stench of the canal behind the palace kept his wife Constance from her sleep, so he ordered it to be filled in to make a "smart and respectable Avenue" The name of that street is still 'Nieuwezijds Voorburgwal', which translates into: "Front defense moat on the new side".

Today, the water in the canals is cleaner than it has ever been in their history. Three times a week, 14 of the 16 existing water locks around the city close up, so clean water can be pumped in from the big lake IJsselmeer. The current that creates pushes the dirty canal water out through the open locks on the other side of the city. Specialized cleaning boats with big scoops and nets patrol frequently to clean surface dirt. Since 2005, all the houseboats in the city are connected to the sewer system.