I'm having an anoraky moment, and noting that the canal has gate and not ground padddles, but they are a weird mix of the sort that one finds in England (the lift up kind, as seen in the top of those gates, atlhough ground paddles are more common here) and the swivelling kind one finds on the canals of New England. Just thought you'd all be fascinated to know that.
I know it was used for trade & transport - it was the main link in its day between the Great Lakes and the Chesapeake Bay. Therefore I suppose the answer would be "transport canal." Though there were mills nearby - this is a piece of one that I've got up on my flickr site:
megs, I'll devote myself to putting lots of canal pix on this for the remainder of the photoblog project, if it makes you happy; I end up there in different stretches rather a lot because of birding etc.
There's also an old 18th-c parallel canal on the Virginia side called the "Powtowmack Canal," but you can only get there by canoe. I used to go there a lot in my paddling days.
It's hella poncey, MizB! And it sadly kind of sucks because most of the places I used to go to there are gone now (e.g., the Key and Biograph Theatres).