This time, I'm trying to find my hotel

somewhere in the back canals of Amsterdam.

Thanks for joining us.

Amsterdam is perhaps

Europe's best-preserved 17th-century city.

Yet at the same time, it's got a fun, contemporary edge.

It's a progressive place invigorated by

a time-honored spirit of live and let live.

We'll cruise the canals and bike the back lanes.

We'll sample the Dutch masters from Rembrandt to van Gogh.

We'll drop into a coffee shop

that doesn't sell coffee,

And we'll ponder the red light district.

We'll remember Anne Frank,

we'll enjoy a feast of Indonesian food, Dutch style,

and we'll relax in Amsterdam's Vondelpark.

The historic core of Amsterdam remains much the same today

as when it was first laid out back in the 1600s.

That was Holland's Golden Age,

when Dutch merchant ships made this the world's richest city.

Amsterdam's touristy main drag,

Damrak, was once the main canal.

Today, it connects the train station

with the city's main square and the Royal Palace.

From this spine, the city opens like a fan,

with hundreds of bridges

and a series of concentric canals.

Wealthy merchants built this city

upon millions of wooden pilings,

creating a wonderland of canals lined with trees

and townhouses crowned with fancy gables.

Traditional bridges -- like this one,

which crosses the Amstel River -- were built

with a clever counterbalance.

They were fine-tuned

and bridge keepers bragged

they could raise and lower one

with a single finger.

The city's founders built a dam on the Amstel

back in the 13th century.

The community that gathered here was named

for that Amstel dam, eventually, Amsterdam.

This is where the river hit the sea.

From here, boats could sail into the interior of Europe

and out to the rest of the world.

Dutch merchant ships would sail right up the main canal

loaded down with material delights --

silks, spices, and porcelain from faraway lands.

Amsterdam's port is still huge.

But it's being transformed from a gritty industrial area

into a vibrant, modern, and very livable district.

A striking film museum and art cinema

is bringing new life to this now-revitalized neighborhood.

You can hop on a free shuttle ferry

to see this evolving district,

or you can cruise a different way,

by joining the hedonists and tourists

on Amsterdam's many canals.

Surprising to me, anyone can hire

one of these electric boats for a little independent exploring.

For some help with the navigation,

I'm joined by my friend

and fellow tour guide, Rolinka Bloeming.

Tell me about the difficulty of building here.

Well, the soil is very swampy,

so everything you see, Rick,

all the houses, all the bridges,

and the walls of the canals are built on wooden pilings.

It's actually oak wood,

and it comes from the Black Forest in Germany.

-We have about 100 canals. -Uh-huh.

And they were all dug out

in the 17th century entirely by hand.

It took them about 30 years.

The most important one

was the Gentlemen's Canal, Herengracht.

And then there is the Emperor's Canal,

Keizersgracht.

And then there's the Prince's Canal.

This has got to be the most beautiful canal in town.

It's my favorite canal, Rick.

So what is this neighborhood called?

It's called Jordaan, this area.

It's got to be the most characteristic

part of Amsterdam.

Oh, today it's one of the most popular places to live.

Beautiful.

The characteristic Jordaan district

offers a quiet slice of Dutch urban life.

Built in the 1600s

for warehouses and to house workers,

it's now home to artists

and inviting little restaurants and cafes.

While just a few blocks from the busy center,

the Jordaan feels like another world.

Everything's in its place, and life seems very good.

[Bicycle bell rings]

Amsterdam has about a million people

and as many bikes.

This multistoried bike garage

is for commuters who ride the train

and then pedal to work.

This is one of Europe's most bike friendly cities.

Bike lanes run next to the sidewalks,

and bikers whiz by silently.

Walk carefully.

[Bicycle bell rings]

One of the joys of visiting Amsterdam

is simply being in this swirl of healthy, busy, biking Dutch.

Bikers everywhere, doing chores,

flirting, delivering,

texting, you name it.

Around here it happens on two wheels.

The city is decorated with ornate gables.

The frugal Dutch made their simple buildings look fancy

by adding ornate facades.

Amsterdam's famous gables include the point gable

bell gable, step gable,

and neck gable.

17th-century land was expensive

and taxes were based on the width of the house,

so the Dutch built skinny and straight up.

In a merchant's house, the shop was on the ground floor,

the family lived in the middle,

and the attic served as a kind of warehouse.

With their cramped interiors and steep stairs,

houses came with a pulley

so goods could be hoisted up and down

on the outside with a rope.

That original design still works today.

Amsterdam's Rijksmuseum

is one of the artistic highlights of Europe.

It was built to showcase

the art of the Dutch Golden Age.

Here we can gain insight into the industrious people

who made tiny Holland

so prosperous and powerful back in the 17th century.

This art is really all about money.

The Dutch worked hard, they were brilliant traders,

and the wealthy had plenty of money to match their egos.

Now, painters earned their living

working not for the church or the king,

but by painting portraits for local big shots.

The great Dutch painter Rembrandt --

this is a self-portrait at age 22 --

earned his money painting portraits.

These Dutch masters -- actually the drapers' guild --

all paid equally and expected to be portrayed equally.

Wearing the standard power suit of the day,

it's as if someone walks in and grabs their attention,

natural as a snapshot.

In Rembrandt's Night Watch, we see another group portrait.

But rather than the standard stiff pose,

this one bursts with energy.

It's the local militia,

which was also a fraternity of business bigwigs,

a kind of rotary club of the 17th century.

They tumble out of their hall, weapons drawn,

ready to defend their city.

While creative and groundbreaking

in its composition, some of those who paid the artist,

like this guy, were probably none too pleased.

This self-portrait of Rembrandt at age 55

shows a man who's seen it all

and woven those experiences into his art.

Rembrandt did more than paint for big egos.

In this painting,

the prophet Jeremiah laments the destruction of Jerusalem.

He slumps in defeat, confused and despondent.

Rembrandt's use of light to highlight certain details

set him apart from other artists of his age.

The Rijksmuseum has four rare

and precious paintings by Johannes Vermeer.

Here, the master of tranquility and stillness

shows an intimate street from his hometown of Delft.

In this quiet painting of an ordinary milkmaid, Vermeer,

who brings out the beauty of everyday things,

creates a scene where we can almost hear the trickle

of the pouring milk.

Perhaps for the first time, art catered to the tastes

and budgets of middle-class people, too.

Smaller canvasses by no-name artists

that a regular merchant could afford

and hang in his living room.

The work of Jan Steen offers a delightful slice

of 17th century Dutch life.

No preachy religious or political themes,

just light entertainment with a dose of folk wisdom.

Here, children teach a cat to dance,

mischief on their delighted faces.

But their father's upset that they're wasting time.

And in Steen's Merry Family, the parents party

while their kids copy their irresponsible behavior.

The girls learn to drink,

and the little boy picks up smoking.

The note warns -- "Parents beware,

your children are learning from your bad behavior."

This light-handed approach to morality

lives on in the Netherlands.

Amsterdam has plenty of examples

of their progressive approach

to subjects many people consider unsavory.

And, with the local passion for tolerance,

it's occasionally shocking.

Prepare for some differences --

curbside urinals,

prostitutes who are unionized, taxed, and regulated,

and coffee shops that sell marijuana.

Throughout the Netherlands,

places selling marijuana are called "coffee shops."

For decades now, the Dutch, like many Europeans,

view marijuana as a soft drug,

like tobacco and alcohol.

Marijuana is tolerated,

but hard drugs are strictly forbidden.

A lot of people think marijuana is a gateway drug.

They think if you smoke marijuana,

you'll be smoking harder drugs.

Marijuana here is soft drugs, like alcohol and cigarettes,

and hard drugs are still strictly forbidden.

What's the age limit for people buying marijuana?

-18. -18.

And how much can you buy in one visit?

Five grams.

How much is five grams of marijuana?

This is five grams of marijuana.

Okay, so that's five grams.

And if you wanted to buy a smaller quantity,

what is one gram of marijuana looking like?

It's about like a bud of this size.

Okay, so this is one gram.

And how much would this cost probably?

-11. -11 euros.

This particular strain, yeah.

Now, you have a menu with a lot of variety.

Yeah, we got all of the different ones.

Make you happy, giggly.

We've got the indicas, that's more of a sleepy.

Mm-hmm.

Got the organic ones, outdoor,

and I got a whole bunch of pre-rolled ones.

Okay, so you can get the loose leafs,

or you can get pre-rolled joints.

-Yes. -In the United States,

we still have so many people in prison because of marijuana.

Yeah, but here, we believe that it's better to tolerate

than to put more people in prison.

Another example of Amsterdam's creative approach

to social challenges is its red light district.

Practitioners of the world's oldest profession

flirt and tease in windows as they have here for centuries.

When it comes to prostitution,

the Dutch figure, if it's going to happen anyway,