The 14-mile, hand-dug Chesapeake & Delaware Canal was opened to traffic on October 17, 1829. At that time there were three buildings on the south bank at the western end of the canal. As the ship traffic through the canal increased, the little cluster of buildings grew into a busy commercial community providing goods and services to passengers and shippers. In 1839, the place was named Chesapeake City. By 1849 the town, now extending over to the north bank, was well established and at its population peak. For the next 75 years, Chesapeake City prospered.
In 1927, the C&D Canal was dredged to a sea-level waterway, eliminating the need for ships to stop for the locks at Chesapeake City. The town’s economic base quickly declined. Commerce was further complicated in 1942 when a ship destroyed the bridge that connected the two sides of the town, leaving residents and travelers for seven years with only a ferry as a means to cross the canal. The opening of a new high-level bridge in 1949 did nothing to restore the town’s economy—travelers swept by high above the town. Another blow struck the town in the 1960s when an entire street of 39 homes was razed to make way for a widening of the canal, which by then was the third busiest in the world.
Today, Chesapeake City is the only town in Maryland that is situated on a working commercial canal. Most of its interesting 19th-century architecture remains intact, and the area that encompasses it on the south bank has been placed on the National Register of Historic Places. At the city dock, pleasure boaters find a tranquil harbor off the busy Inter-Coastal Waterway, of which the canal is a major element. From the basin, visitors can walk easily into town or tour the Canal Museum, where the story of the canal is told and the massive waterwheel and steam engines that filled the locks stand in mute testimony. Outside is a replica of the lighthouses that lined the canal in days gone by.
Chesapeake City now is a destination widely known for its unique inland view of ocean-going vessels, for the proudly preserved and displayed reminders of its history, and for its friendly hospitality. Travelers discover fine dining, picturesque stores, outdoor concerts, seasonal events, and outstanding bed & breakfasts. From its origin as a rough and rowdy boom town, through an era of dispiriting depression, Chesapeake City has emerged as a charming and interesting place with a warm welcome for its visitors.