The history of Amsterdam: city of commerce and canals

The founding of Amsterdam

People from other parts of Europe began settling here in the Middle Ages, from around AD 1000, and started the incredible, backbreaking work of constructing systems for moving and controlling the water.

They built dykes along both sides of the Amstel to protect the land from flooding, then dug trenches to drain water from that same land so it could be farmed.

A dam was built in the Amstel River, which is the origin of the name Amsterdam – from Aemstelredamme, mentioned in a letter from 1275.

This is traditionally accepted as the founding year of the city, which was granted that status by the Bishop of Utrecht around the turn of the 14th century. The present-day Dam Square is on the site of the early dam.

Canals were constructed around the centre and not only controlled the water, but also made it usable by enabling boats to carry people and goods around the city to various merchants’ warehouses.

By the later Middle Ages, Amsterdam – now a city of a few thousand – was a strongly Catholic settlement, a centre of trade and of herring fishing. And in the 14th century it became a pilgrimage destination, following the so-called Miracle of Amsterdam.

In 1345, a priest attending a dying old man gave him communion, but the man vomited up the Host. The wafer was thrown on the fire, but it didn’t burn. This was perceived as a miracle, drawing devout pilgrims from across Europe and bringing fame to Amsterdam.

Even today, in a gritty shopping area, there's a little street called the Heiligeweg – the Holy Way – which was the route pilgrims took into the city centre.

Amsterdam's independent spirit

The close Dutch relationship to water, formed through controlling it and using it for fishing and trade, led to a certain mentality.

At that time, much of European society was feudal: there was a lord of a manor – an estate with a castle or a great house on it – who oversaw his land and the peasants who lived and worked on it. It was a system that had endured for centuries, and it defined and limited the expectations of everyone within it.

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But when the Dutch dammed rivers and built dykes, the swathes of land they reclaimed from the sea wasn't owned by a nobleman – it was theirs.

So communities divided it up to use for growing food crops and flowers (and eventually,the famed Dutch tulip industry) as well as grazing cows, developing a thriving dairy industry. Everybody became an entrepreneur.

These people realised that life for their children could be better than their own, creating a nation of opportunity-seekers. The Dutch, particularly in the 15th and 16th centuries, – and particularly those in Amsterdam – looked outwards for business opportunities.

They became very wealthy, which attracted the attention of other Europeans.

Amsterdam and the Holy Roman Empire

In the 16th century, the Holy Roman Empire – which by then encompassed the so-called Low Countries, including what’s now Belgium and the various provinces of the Netherlands – was ruled by the Spanish monarch Charles V and then his son, Philip II.

After the Reformation, the people of the Netherlands had embraced Calvinism, an austere form of Protestantism. In response, the Spanish invaded first southern Low Countries, with the result that the now-Belgian city of Antwerp – a centre of banking and trade – fell to the Spanish. Many of those involved in these spheres emigrated to Amsterdam, consolidating the city’s importance.

Philip’s insistence on introducing the Inquisition to the Netherlands, against the wishes of its people, sparked a revolt that became the long-lasting war of independence now known as the Eighty Years’ War.

uring this conflict, in 1578, Amsterdam’s Catholic government was ousted in favour of a Protestant one in an event known as the ‘Alteration’.

Fatefully, Holland – the province encompassing Amsterdam – was part of the union of seven northern provinces that formed the Republic of the Seven United Netherlands, or Dutch Republic.

Amsterdam and the Dutch Golden Age

Though the Dutch fight against Spain continued for decades more, from the later 16th century the republic – and notably Amsterdam – enjoyed a cultural and economic golden age.

This culminated in 1602 with the development of the first modern corporation. In fact, the Dutch East India Company was one of the first multinationals. It was the largest company in the history of the world up to that point, and changed the definition of what a company could be.

Before that, a company typically was a group of people who put their money together to back a venture – a voyage, say. The ships went out, hopefully obtained goods and brought them back, everybody then divided the spoils, and the company was done.

The big innovation was that the Dutch East India Company – in which Amsterdam was dominant – was a permanent organisation. After the first big voyage to the East Indies, when the ships returned laden with valuable spices, the company not only determined to continue these ventures, but issued what we call shares of stock.

Anybody could buy one and be part of this great economic venture of the time – and people from all walks of society did so. Not only that, but these shares were themselves tradable – so a stock exchange was established right by the docks.

Though the 1608 Bourse stock exchange building is gone, you can see its 1903 replacement – the Beurs van Berlage building – on the Damrak in the centre of the city, now used as a venue for concerts and exhibitions.

Amsterdam becomes a city of canal and art

Money came flooding into the city, and the Dutch East India Company carried out a huge feat of urban planning.

It was this corporate enterprise that laid out the classic 17th-century city we see today with series of concentric canals wrapping around the medieval core: the Herengracht, Gentleman's Canal; the Keizersgracht, Emperor’s Canal; the Prinsengracht, Prince’s Canal; and outer defensive Singelgracht.

Along with the canals themselves, thousands of houses were being built, as well as hundreds of bridges. This was all completed in a remarkably short time, and the city we see today is a product of that era.

Amsterdam’s canal houses are fascinating in their own right, because they represent the enormous power of individual merchants.

Most have a hoist beam jutting out from the top, with a hook and pulley, to lift goods from vessels bringing them from larger ships at the docks, for storage in the attic. Goods were transported halfway around the world and into these houses without ever touching solid ground.

Wealthy Dutch citizens also patronised artists. While many renowned painters were commissioned by churches, Rembrandt, Vermeer and their followers increasingly painted portraits – another reflection of the sense Dutch people had of their own individuality, and a fascination with the self.

The republic was also an epicentre of literature. About half of all books published in the world in the 17th century were produced in the Dutch provinces.

What’s interesting is that it was an industry, making a product – albeit one that is connected to ideas. So those people at the centre of publishing were also the first to learn about the newest ideas and opportunities in the development of science, scientific equipment, lens grinding, and looking into the night sky.

Amsterdam and the Rampjaar

By the second half of the 17th century, Britain was posing a challenge through its own East India Company. And the Dutch empire, which was based mostly on individual scattered trading posts rather than large-scale colonial administration, wasn’t built to compete with the British.

Then in 1672 came the Rampjaar – the ‘disaster year’ in which the Dutch republic was nearly overrun by a French invasion. Dams and dykes were destroyed, and land flooded. The country took decades to recover.

Though global trade dominance was curtailed to an extent, Amsterdam and the wider Netherlands recovered and progressed, albeit in a low-key fashion.

Trade with the East Indies remained important, and by the end of the Industrial Revolution in the 19th century – by which time Amsterdam had become the capital of the Kingdom of the Netherlands – the city had become less dependent on maritime commerce.

The Netherlands was now also a centre of diplomacy: many treaties have been negotiated in The Hague, which is also the location of the International Court of Justice.

Amsterdam during the World Wars

The Netherlands remained neutral during the First World War, but its attempts to do the same in 1939 were unsuccessful.

After Nazi Germany invaded, the NSB (National Socialist Movement in the Netherlands, or Dutch Nazi Party) took over much of society. And though the Dutch are rightly proud of their very active resistance movement, some three-quarters of the Netherlands’ Jewish population, which were largely integrated, were murdered by the Nazis – a much higher proportion than any other western European nation.

One name many will be familiar with is that of Anne Frank, the teenage diarist who hid, with her family, in the heart of Amsterdam in a secret annexe for many months. They were ultimately discovered and transported first to Auschwitz and then Bergen-Belsen concentration camp. The Anne Frank House on Prinsengracht provides window into this troubling episode.

Amsterdam today

The Amsterdam that emerged from the war still retained its 17th-century core. But the city continued to expand – and not just its physical structure. In the 1960s, a few years before most other places, Amsterdam became a centre of counterculture, with the formation of the Provo movement aiming to provoke authorities.

They were succeeded by hippies, dope-smoking, and anti-war protests, spreading a new way of thinking and expression. The world really became aware of this in 1969, when John Lennon and Yoko Ono staged their ‘Bed-In for Peace’ at the Amsterdam Hilton.

Today, some of that sense of counterculture remains, albeit commodified for tourism, alongside the commerce that fuelled its earlier grown – and Amsterdam’s quintessential spirit of independence.

What to see: Amsterdam in five places

The capital of the Netherlands flourished as a trade hub and cultural epicentre. Russell Shorto picks five historic spots in the city of canals and commerce

1. Tivoli Doelen Amsterdam Hotel

Every visitor to Amsterdam should see The Night Watch in the Rijksmuseum – Rembrandt’s huge, iconic 1642 painting of a company of soldiers marching through the city’s streets. But after you’ve admired it, go to the Doelen Hotel, on a bend in the river Amstel right in the middle of the city.

That’s because The Night Watch was commissioned for a building that once stood on this spot, and it was here that it was first displayed.

This building was the Kloveniersdoelen, the hall and shooting range for one of the city’s three companies of schutterijen – citizen soldiers who would patrol the streets in the evening to keep order.

The 17th-century structure was replaced around the late 19th century or early 20th century by the grand hotel that stands here today, but a visit is a useful reminder of how important art was to the life of the city in its heyday.

2. West India House

The early 17th-century West-Indisch Huis on the Herenmarkt, close to the central railway station, was the headquarters of the Dutch West India Company in Amsterdam, which rented the building in 1623.

It was here that the company planned a new colony in North America, based on the island called Manhattan, which had been charted for the Dutch by English explorer Henry Hudson.

In 1625, construction began on Fort Amsterdam, to serve as the seat of government of the settlement named New Amsterdam on the southern tip of the island. So the West-Indisch Huis is essentially where the idea of New York was born.

3. Prinseneiland

North of the medieval centre, right on the harbour, lies little man-made Prince’s Island. If you walk onto it, you might not even notice that you’re crossing a bridge onto an island, because it’s so integrated into the structure of the city.

It’s one of three islands in the area made using the earth removed while digging the canals during the huge city development project of the 17th century, funded by the wealth of the Dutch East India Company at its peak.

It’s an oasis from the hubbub: somehow, as soon as you stroll onto the island, the noise level goes down. Here you’ll find old architecture – classic tall red-brick warehouses and residences – as well as houseboats, and small craft sailing by. It gives you a sense of being both in the city, but also somehow outside of it.

4. Resistance Museum

This wonderful little museum is housed in the late-19th-century Plancius Building, across from the zoo. Originally constructed for a Jewish choral society, it still sports a Star of David on its cream-coloured facade.

Though the museum’s focus is on the Dutch resistance movement during the Second World War, its displays explore the story of the Nazi occupation more widely through the stories of 100 people who lived through that traumatic period, using various documents and objects to examine their lives and the difficult choices they had to make.

There’s also a junior museum to make the story accessible to younger visitors.

5. Amsterdam City Archives

The Gemeente Amsterdam Stadsarchief, the world’s largest city archive, occupies an imposing – I’d say almost menacing – building on Vijzelstraat between Herengracht and Keizersgracht right in the city centre.

As well as housing incredible archives of documents and pictures stretching back over seven centuries, it stages various exhibitions – but the history of the building itself is also fascinating.

During the Second World War, it was commandeered by a branch of the German military. The story goes that when German officers were clearing the building – which was then a bank – of its workers, they told them they must be out by 1pm.

When the staff seemed to be dithering, an officer took out his pistol and shot two bullets at the 12 and 1 positions on the clock, a message to say: you really have to be out by 1pm. The bullet holes are still there – a remarkable piece of living history.

Russell Shorto was talking to Paul Bloomfield, travel journalist and host of our podcast series History's Greatest Cities. Listen to the companion podcast on Amsterdam or explore the entire series