The exploration of the uncharted eastern parts of Germany begins, and results in the founding of cities such as Lübeck.

Albert, called Albert the Bear, the only son of Otto, Count of Ballenstedt, and Eilika, daughter of Magnus Billung, Duke of Saxony, had inherited the valuable estates in northern Saxony of his father in 1123, and on his mother's death, in 1142, had succeeded to one-half of the lands of the house of Billung.

Albert was a loyal vassal of his relation, Lothar I, Duke of Saxony, from whom, about 1123, he had received the Margraviate of Lusatia, to the east; after Lothar became King of the Germans, Albert had accompanied him on a disastrous expedition to Bohemia in 1126, when he suffered a short imprisonment.

Albert's entanglements in Saxony stemmed from his desire to expand his inherited estates there.

After the death of his brother-in-law, Henry II, margrave of a small area on the Elbe called the Saxon Northern March, in 1128, Albert, disappointed at not receiving this fief himself, had attacked Udo, the heir, and was consequently deprived of Lusatia by Lothar.

In spite of this, he had gone to Italy in 1132 in the train of the king, and his services there were rewarded in 1134 by the investiture of the Northern March, which was again without a ruler.

Once he was firmly established in the Northern March, Albert's covetous eye lay also on the thinly populated lands to the north and east.

For three years, he had campaigned against the Slavic Wends, who as pagans are considered fair game, and whose subjugation to Christianity had been the aim of the Wendish Crusade of 1147 in which Albert took part; diplomatic measures were more successful, and by an arrangement made with the last of the Wendish princes of Brandenburg, Pribislav of the Hevelli, Albert had secured this district when the prince died in 1150.

Taking the title "Margrave of Brandenburg", he has pressed the "crusade" against the Wends, extended the area of his mark, encouraged German migration, established bishoprics under his protection, and so becomes the founder of the Margraviate of Brandenburg in 1157, which his heirs — the House of Ascania — will hold until the line dies out in 1320.

The area around Lübeck had been settled after the last Ice Age.

Several Neolithic dolmens can be found in the area.

Slavic peoples started around CE 700 coming into the eastern parts of Holstein, which had previously been settled by Germanic inhabitants and were then evacuated in the course of the Migration Period.

In the early ninth century, Charlemagne, whose attempts to Christianize the area were opposed by the Saxons, had moved the Saxons out and brought in Polabian Slavs, allied to Charlemagne, in their stead.

Liubice ("lovely") had been founded on the banks of the river Trave about four kilometers north of the present-day city center of Lübeck.

In the tenth, century it became the most important settlement of the Obotrite confederacy and a castle had been built.

The settlement had been burned down in 1128 by the pagan Rani, a West Slavic tribe based on the island of Rugia (Rügen) and the southwestern mainland across the Strelasund in what is today northeastern Germany.

The modern town was founded by Adolf II, Count of Schauenburg and Holstein, in 1143 as a German settlement on the river island Bucu.

He has established a new castle which was first mentioned by Helmold in 1147.

Adolf has to cede the castle to Henry the Lion in 1158.

Welf Duke Henry the Lion advances German colonization into Holstein, Lauenburg, and Mecklenburg, and aids Lübeck’s rise as a commercial force in the Baltic.

Construction begins in 1173 on the city’s Romanesque cathedral, sponsored by Henry as a cathedral for the Bishop of Lübeck.

The Hanseatic League is an alliance of trading guilds that is to establish and maintain a trade monopoly over the Baltic Sea, to a certain extent the North Sea, and most of Northern Europe for a time in the Late Middle Ages and the early modern period, between the thirteenth and seventeenth centuries.

Historians generally trace the origins of the League to the rebuilding of the North German town of Lübeck in 1159 by Duke Henry the Lion of the Duchy of Saxony, after Henry had captured the area from Count Adolf II of Holstein.

Lübeck became a base for merchants from Saxony and Westphalia to spread east and north.

Well before the term Hanse would appear in a document (1267), merchants in a given city had begun to form guilds or Hansa with the intention of trading with towns overseas, especially in the less-developed eastern Baltic area, a source of timber, wax, amber, resins, furs, even rye and wheat brought down on barges from the hinterland to port markets.

The cities of Lübeck, Wismar, and Rostock have entered into a pact to defend against pirates of the Baltic Sea, laying the groundwork for the Hanseatic League.

The "Queen of the Hansa", Lübeck, where traders transshipped goods between the North Sea and the Baltic, had in 1227 gained the privilege of becoming an Imperial city, the only such city east of the River Elbe.

Having access to the Baltic and North Sea fishing grounds, Lübeck had in 1241 formed an alliance in with Hamburg, which controls access to salt-trade routes from Lüneburg.

The allied cities have gained control over most of the salt-fish trade, especially the Scania Market; and Cologne joins them in the Diet of 1260.

Holy Roman Emperor Frederick I Barbarossa had become the first secular ruler of Bremen in 1186.

Bremen had formally been a Free Imperial City from this time forward but does not have complete independence from the Archbishops, in that there is no freedom of religion, and its citizens are still forced to pay church taxes.

Shortly following Bremen's secularization, in 1260, it gains admission to the Hanseatic League.

An emission of life annuities is first recorded in 1285 by the city of Lübeck.

The first instance of issue of public debt in Germany, it confirms a trend of consolidation of local public debt over northwestern Europe. (Zuijderduijn, Jaco (2009). Medieval Capital Markets. Markets for renten, state formation and private investment in Holland (1300-1550). Leiden/Boston: Brill.)

The Lübeck law, which is the constitution of a municipal form of government developed at Lübeck in Schleswig-Holstein after it was made a free city in 1226, provides for self-government.

It had replaced the personal rule of tribal monarchs descending from ancient times or the rule of the regional dukes and kings that had been established by Charlemagne.

Lübeck had set about spreading its form of government to other cities around the Baltic Sea.

(Eventually about 100 will adopt a government based on the law, which today still serves as a foundation for German town laws in many of those cities.)

Charlemagne had held all of his aristocratic vassals personally responsible for the defense, health and welfare of the tribesmen settled on their estates, including the towns.

The Lübeck Law, in theory, makes the cities to which it applies independent of royalty.

Later in the century, cities governed by the Lübeck Law will form into a powerful trade association, the Hanseatic League, which amounts to a confederacy with headquarters at Lübeck.

Lübeck, having developed as an important economic and cultural center for the entire Baltic area, is chosen in 1358 as the administrative headquarters for the Hanseatic League.

Lübeck had become the "Queen of the Hanseatic League" in the fourteenth century, being by far the largest and most powerful member of this medieval trade organization.

The League primarily trades timber, furs, resin (or tar), flax, honey, wheat, and rye from the east to Flanders and England with cloth (and, increasingly, manufactured goods) going in the other direction.

Metal ore (principally copper and iron) and herring come southwards from Sweden.

The League has a fluid structure, but its members share some characteristics.

First, most of the Hansa cities had either started as independent cities or gained independence through the collective bargaining power of the League.

Such independence remains limited, however.

The Hanseatic free imperial cities owe allegiance directly to the Holy Roman Emperor, without any intermediate tie to the local nobility.

Another similarity involves the cities' strategic locations along trade routes.

In fact, at the height of its power in the late 1300s, the merchants of the Hanseatic League have succeeded in using their economic clout (and sometimes their military might—trade routes need protecting, and the League's ships sailed well-armed)—to influence imperial policy.

The Hansa also wages a vigorous campaign against pirates.

From 1392, maritime trade of the League has faced danger from raids of the Victual Brothers and their descendants, privateers hired by Albert of Mecklenburg against Queen Margaret I of Denmark.