Lemgo quickly became the largest town in the earldom of Lippe due to its favourable location at the corossroads of old trade routes. A second town, Neustadt, was founded in 1265 to the south. In 1365, the two were united and surrounded by a town wall which can still be seen today. The merchants maintained trading relations with far-off lands. The grand town houses still bear witness to the prosperity of this former Hanseatic town.