The landlocked sounds were entirely dependent upon poor overland tracks or shipment along the treacherous Carolina coast to reach further markets through Norfolk, Virginia.

In May 1763, George Washington made his first visit to the Great Dismal Swamp and suggested draining it and digging a north–south canal through it to connect the waters of the Chesapeake Bay in Virginia and Albemarle Sound in North Carolina.

As the first president, Washington agreed with Virginia Governor Patrick Henry that canals were the easiest answer for an efficient means of internal transportation and urged their creation and improvement.

As the state line split the main salon, the hotel was quite popular with gamblers who would simply move the game to the opposite side of the room with the arrival of the sheriff from the other jurisdiction.

In April, 1862, upon learning of rumors that the canal would be used to help the Confederate ironclad escape from Hampton Roads to the Albemarle Sound in North Carolina, Union General Ambrose E. Burnside sent General Jesse L. Reno from Roanoke Island to destroy the Culpepper Locks near South Mills on the Dismal Swamp Canal.

The Union troops advanced the following morning on an exhausting march toward South Mills where Confederate Colonel Ambrose R. Wright posted his 900 men to command the road to the town.

That evening he heard a rumor that Confederate reinforcements were arriving from Norfolk and ordered a silent march back to the transports near Elizabeth City.

As recreational boating became popular in the mid-20th century, the canal became an important link to provide shelter from the brutal forces of the treacherous Atlantic Coast line off the Carolinas and the Virginia capes.

The necessary dredging for navigation on the canal was completed November 2017 to a depth of approximately five feet, and reopened for a short time before closing again, due to being inundated with duckweed.

The historic canal is now recognized as part of the Underground Railroad and along with the Great Dismal Swamp, is noted as a former sanctuary for runaway slaves seeking freedom.