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The founding of the city is relatively recent, with the first recorded official documents bearing the name “Amsterdam” dating to the late 13th century. The land around the city would have been reclaimed as early as the 10th century, but the city was officially founded when local fishermen built a bridge and a dam across the river Amstel, and established a small settlement. The town soon flourished thanks to an exemption from tolls in 1275 and was granted city rights in 1300.
Thanks to an alliance with the Hanseatic League, the city became Holland's most important commercial centre in the 14th century. The canals that can still be enjoyed today in the medieval centre were dug towards the end of the century. Wooden houses prevailed at the time and the devastating fires of 1421 and 1452 caused extensive damage to the city centre, thus bringing about new laws imposing that houses be built of stones and bricks. The 16th century saw great political and religious upheaval when Charles I, of the Habsburg dynasty, granted the Netherlands to his Catholic son Philip II of Spain in 1555, which prompted a rebellion and 80-year war against Spanish intolerance and persecution. Although Amsterdam initially sided with Spain, it rallied to the Dutch cause on 26 May 1578, which marks the Alteration of Amsterdam, and gave its support to William of Orange. The Netherlands regained their independence at the end of the war and the country became a haven of religious tolerance where Catholics, Protestants, Huguenots and Jews, many of whom had fled religious persecution in Europe, co-habited peacefully. The 17th century heralded Amsterdam’s Golden Age with new opportunities for trading in the Americas, Indonesia, Brazil and India. Amsterdam's merchants had the largest share in both the Dutch East India Company and the Dutch West India Company, which acquired possessions that later became Dutch colonies. The city underwent considerable change and expansion during that period and some of the most important historic buildings such as the Royal Palace on Dam Square and merchant houses along the canals date from that period. The prosperity of the city extended into the next century with the opening of the Suez Canal: trade with Indonesia intensified, the first diamonds arrived in Amsterdam and the city became the financial capital of the world.
The city attracted a large number of immigrants throughout the period, giving Amsterdam the rich ethnic diversity and reputation for tolerance that it still enjoys today.
The wars of the Dutch Republic with the United Kingdom and the Napoleonic wars marked a decline in Amsterdam’s prosperity at the end of the 18th century, but its fortunes slowly started to improve again in 1815 with the establishment of the Kingdom of the Netherlands. At the end of the 19th century, the industrial revolution and the building of two major canals giving Amsterdam a direct connection to the Rhine and the North Sea Canal brought about a second Golden Age. The population of the city grew dramatically and its prosperity was celebrated with the building of new museums and Amsterdam Central station.
The country remained neutral during World War I and was largely spared, but it suffered great hardship under Nazi occupation in 1940-1945. Many members of the Jewish community, over half of whom lived in Amsterdam, were deported and perished in the Holocaust, with Anne Frank as their most emblematic victim.

Post-war Amsterdam saw the remodelling of the city with new suburbs and public parks built and improved housing conditions. A Metro line between the new suburb of Bijlmer and the city centre started operating in 1977, but demolition plans for the old Jewish neighbourhood met with fierce opposition and  much of the city centre is now a protected area. In the 1970s, the city’s soft approach on drugs made it the destination of choice for generations of hippies and young people and although such a liberal view on soft drugs has been the subject of recent debates, both from politicians and local people, the city remains a magnet for drug tourists. Amsterdam’s great tradition for tolerance has also been tested recently, first by the murder of Dutch film-maker Theo Van Gogh and emergent Neo-nazi groups, but such incidents have if anything strengthened the city’s stand against intolerance and Amsterdam remains proudly diverse and resolutely all accepting.

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