Anyone who wonders why Water Street is three blocks away from the water needs to visit this city's newest archeological dig site in the next month.

"Where we're standing right now used to be under water," said city archeologist Elizabeth Comer, as a horde of volunteer and staff diggers today assaulted the last undeveloped patch of ground near the Inner Harbor, where 32 days from now a glittering hotel will start to rise.

"But in colonial days," she said, "there were no ordinances protecting the rights of waterfront landowners. Whatever you filled in became your land."

Entrepreneurs, unencumbered by laws, made big money extending the land into the water, she said, creating their own waterfront and, in the process, the ground that the busy Inner Harbor complex stands on.

And what about the poor folks back on Water Street?

"They were left high and dry," said Comer. "They lost their shirts."

Thus went the ebb and flow of commerce 300-plus years ago, when Annapolis was a booming port and Baltimore was a sleepy little town of perhaps 25 houses.

In their most auspicious dig so far, Comer and her colleagues at the 1 1/2-year-old Baltimore Center for Urban Archaeology are trying to figure out what happened to turn the tide.

"Our goal," she said, "is to find out what the harbor front was like in the 18th century and hopefully, through that, to figure out the economic roots of Baltimore's success."

They don't have much time. In the continuing saga of economic success in Baltimore, Rouse Company, the firm that built Harborplace, will begin pouring the foundation for a hotel/office/parking complex called "Gallery at Harborplace" on Dec. 16.

Already, giant loaders and dozers are digging all around the 100- by 200-foot area on Pratt and Calvert streets where the archeologists are scraping away the ages with trowels.

The relationship between the developers and the historians in Baltimore is oddly symbiotic. Rouse donated the land, the time and $30,000 to the archeologists. "We went to them," Comer recounted, and argued that "while Rouse may have bought the land, the history it contains belongs to Baltimore and its people."

The archeologists, in their first day of digging, today managed to scrape out the outlines of an old dock where the earliest cargoes going in and out of Baltimore were handled, and found a cobblestone street from the 1800s.

"It's a pleasure on several levels," said Tim Doyle, a Johns Hopkins graduate, who today was digging away at a brick warehouse floor. "You're learning about where you live, plus you're finding treasures. But basically, this urban archeology is rescue work. You rush in and save it before the bulldozers get it."

Comer said Baltimore started its archeology center after Mayor William D. Schaefer read about a similar "public archeology" operation in Annapolis.

She said the dig site will be open to visitors and someone will be on hand seven days a week to interpret the work being done.

Also, a tiny piece of the parking lot that has operated on the site for several years has been left undisturbed, and visitors to the dig site are permitted to park there. It is the only free parking place anywhere near Inner Harbor.