The first person to do this was Sir Thomas Dale in 1610 (just 3 years after Jamestown). He was the Lord High Marshall of Virginia, sent up the James to explore for gold or routes inland that would lead to gold. He and his men camped in this meander and dug a trench for defense -- that is, the trench in effect formed a moat so their site, which they named Henricus (later Henrico), became an island -- now known as Ferrar's Island.
Because Dale had spent time fighting for King James in the Netherlands and had learned about Dutch hydrological works (a.k.a dykes and dams), they named this the "Dutch Gap."
Henricus was wiped out in the Indian uprising of 1622. Over time, the river and floods re-filled the Gap with mud and sediment. During the Civil War, troops under Grant re-dug the Gap in an attempt to bring Union ships up the James by-passing artillery along the river near the site of Bermuda Hundred. They dug almost all the way through when the river broke through of its own accord and in a rush, re-filled it again with sediment. Only a rowboat could get through, so the plan was abandoned.
In the early 1900's the Gap was re-dug once more with modern machinery and it remains open today as a shortcut up the James for shipping.