When the last millennium was still quite young, a handful of adventurers came floating down the river Amstel in hollowed-out logs. Out of the marshlands and swamps surrounding the Amstel River, a structure of dams and dikes was forged - the first of which is marked by the Dam square at the heart of the city today. These canny "Aemstelledammers" began exacting toll money from the passing beer and herring traders of the roaring Eastern Sea Trade of the Baltics. They quickly became expert boat builders and brewers; attracting more interest in the emerging town. In 1275, Count Floris of Holland formalised these activities by granting special toll privileges to the merchant town and in 1300 the town got its first charter.
The right to free passage proved to be crucial for the economic development of Amsterdam. Free passage meant that traders could operate cheaply. In particular, beer and herring proved popular commodities. For example, in 1323 Amsteldam owned the exclusive right to import beer from Hamburg. And the herring trade grew rapidly after the invention of herring curing - a technique that involved removing the fish’s intestines directly after they were caught in order to keep them fresh longer. This allowed fishermen to catch more fish and thus make more profit.
By the end of the 15th century, the city developed rapidly. After the Spaniards conquered Antwerp, many wealthy Jews fled to Amsterdam. The money they brought with them was used to organise trips to India, which proved a huge commercial success. Then in 1602, the Dutch East India Company was founded. The city of Amsterdam had a majority share in the organisation, which was to become the first multinational company in the world. The result was a period of unprecedented prosperity, causing the 17th century to become known as the Golden Age.
During this period, the city underwent two massive urban expansions, and for the first time both functionality and beauty were taken into consideration. The results were the now-famous canals and the Jordaan district.
The art scene was also flourishing at this time. In the first half of the 17th century, the number of artists grew enormously and there was an explosion of art and art dealers in Amsterdam. Within just thirty years, Amsterdam became a thriving cultural city, leaving a legacy of Rembrandt van Rijn, Johannes Vermeer and Jan Steen.
At the end of the 17th century, the Amsterdam economy came to a standstill, resulting in a period of decline and increasing poverty. But with the construction of the North Sea Canal (1876), Amsterdam finally had a direct connection to the sea. From that moment on steamships became part of everyday life in Amsterdam's port. It was a turning point for the city. Thanks to trade with the Dutch East Indies (Indonesia), Amsterdam acquired an important position in the world spice trade. The diamond trade with South Africa also began to evolve at this point.
That new period of prosperity is reflected in the construction of monumental, architectural masterpieces. In 1889, Amsterdam's Central Station was completed. A few years later, the Concertgebouw, Theatre Carré and Hotel Americain followed.
The 20th century began well. The Amsterdam School, an idealistic architecture movement, provided low-cost housing around the old city. The city also expanded to include Schiphol Airport, which still remains the home of Dutch national carrier KLM - the oldest airline in the world.
Although the Netherlands remained neutral during World War I, a serious food shortage befell the country and products had to be rationed. In 1917, a ship arrived containing potatoes intended for the army. However, the local population were dismayed by this, resulting in the "potato riots". This began a turbulent period in the history of Amsterdam.
During the crisis years (1934) a revolt broke out. Protests took place against the reduction of unemployment benefits; for many people the only source of income. In particular, residents from the Jordaan participated, throwing rocks at the police. This uprising became known as the Jordaan riots, and as a result, all streets in the area became paved so that the stones could no longer be pulled up and used as weapons.
World War II caused little physical damage to the buildings and infrastructure of Amsterdam. But starvation during the period did take many lives, and as a result of the persecution of the Jews, the city lost ten percent of its inhabitants.
After the war, the composition of the Amsterdam population changed rapidly. Many original Amsterdammers left for satellite towns like Purmerend, Hoorn and Almere. At the same time, an influx of Surinamese, Turkish and Moroccan immigrants boosted the city's population. Amsterdam is now home to more than 780,000 residents from 180 different countries.