Situated at a central point in its county, Hereford is not considered an ancient town, even though there seems to have been modest Roman occupation (perhaps with a temple) around the site where the cathedral was later built. Rather, it came to prominence from the seventh century as the capital of a minor Saxon kingdom and seat of a bishopric, whose minster was built at a crossroads. Hereford was consequently described in Domesday as a city. It grew up on a gravel terrace beside the Wye, near that river's junction with the Lugg, with the foothills of Wales to the west. Rivers and roads played a key role in its success. The former not so much for commercial transport as for fulfilling domestic and industrial needs (whether from the watercourses or from wells) and for powering grain- and later fulling mills; yet the terrace was high enough above river level to protect buildings from risk of flooding. A branch of Roman Watling Street seems to have passed through the site (though precisely where is still debated), and as the medieval road system developed being largely in place by mid-eleventh century Hereford became a hub within the shire, with roads leading into Wales, to Chester via Leominster and Ludlow, to Worcester, to Monmouth and Gloucester, and through Ledbury into the Midlands.
Hereford's position in this communications system, and its proximity to the England-Wales border, as well as its location on a defensible site by a ford over the Wye, gave the city an obvious strategic importance as an outpost of Saxon England; this is reflected in its name, referring to a ford used by armies (heading for Wales), and in the duties, recorded by Domesday, of its inhabitants to serve on expeditions into Wales and of its farriers to service the king's horses. When the minor kingdom was absorbed into Mercia, the latter's rulers continued to appreciate the value of Hereford. Archaeological evidence suggests a planned town may have been laid out, presumably by Offa, in the latter half of the eighth century, with a defensive enclosure added a little later. It is possible the existence of settlement prior to fortifications might point to the presence of an important ecclesiastical institution, but the chronology of the establishment of the diocese is uncertain. Most historians view Hereford as one of a number of what were essentially burhs established by Offa across the parts of England he came to control; they were not solely to consolidate his sovereignty but to create commercial centres connecting Mercia's economy with those of southern and eastern England. Hints of the layout of the original tenement plots, later sub-divided, are suggested in the modern street plan, though that layout may have developed in phases. Fortifications were strengthened, perhaps more than once, in the tenth century, and again following a Welsh assault in 1055.
Not merely a border fortress, Hereford became the capital of a shire in the tenth century; it had a mint by 924, which would have further bolstered its standing as a regional market, whose trading activities likely focused on one of the main north-south streets in the burh, later known as Broad Street, which was part of a long-distance route through the Marches. The shrine of St. Ethelbert attracted a sufficient volume of pilgrims to the cathedral to support a rebuilding programme in the early eleventh century, while a little later Earl Ralph, the Confessor's nephew, may have erected in the city one of the first English castles, although this tradition is now suspect [Nigel Baker, Hereford city defences, Herefordshire Archaeology Report no. 292 (2011), pt.1, p.20]. The burgesses' obligations to provide certain services whenever the king visited essentially the same as due from Shrewsbury is another indicator of the importance of the city. In 1055 it was referred to as a port the first explicit documentary evidence of Hereford's role as a commercial centre; Domesday used the term again to distinguish the bishop's fee from that of earl and king, which was described as a civitas.
Very soon after the Conquest the earldom had been entrusted to one of the Conqueror's closest and most capable supporters, William Fitz-Osbern. He promptly refortified the castle and garrisoned it with Normans. Furthermore, while confirming the existing customs of the English burgesses, he founded, on the north side of the Saxon burh, a new borough around a large triangular marketplace, with burgage plots laid out along existing approach roads, but no new streets discernible as part of the plan. The Domesday entry for Eaton Bishop, a manor a few miles outside the city, refers to an exchange of land for the site of the new market established by Fitz-Osbern, which was a point of convergence for several roads. Mary Lobel ["Hereford", in M.D. Lobel, ed. Historic Towns, vol.1 (1969), p.4] suspected that the bishop, whose fee had lost tenants and value as a result first of being sacked in 1055 and then forceful subjugation by the Normans, sold part of his city land to Fitz-Osbern, along with his market rights. If market rights were transferred and there is really no need for the market of Fitz-Osbern's new borough to be explained in this way then it was likely as an appurtenance of seigneurial landed tenure, for this was evidently the way in which market rights were perceived initially; even though heritable and partible, such rights were not something capable of being bought and sold independent of territorial lordship, except (once the licensing system had developed) in that, like free warren, they were not automatic rights of such lordship but had to be acquired from the king, or his delegate, in the first instance, with the terms of the licence indicating whether the rights could be transferred to heirs (which was usual) or assigns (which was not). The normal omission of assigns from the licence was presumably to ensure the monarchy an ability to tax any transactions in market rights, should they become commoditized which, on the whole, does not appear to have been the case, although market-endowed manors could be treated as financial assets, as exemplified by Walter II de Lacy's making the revenues from his manor of Britford security for a loan from a London merchant in 1231. Urban communities had no need to take out market licences, although occasionally they pursued fair licences, because market rights were seen as long-established appurtenances of towns (or rather, of their lords, most of whom turned them over to the community as part of fee farm arrangements), and no need for renewal of such rights existed, for the concept of towns as corporate entities was understood long before embodied in the formal trappings of charters of incorporation.
Fitz-Osbern attracted to his new borough at Hereford French settlers, by endowing them with the more advantageous customs of his home town, Breteuil, which also had a triangular marketplace, and of which he was probably the founder; recent excavation of extensive burial grounds near Hereford's cathedral, with scientific analysis of a small sample of skeletons, has shown that about half the deceased were of Norman background. As at Norwich, the French quarter's marketplace soon became the commercial centre of the town that part of the ancient east-west through-road immediately west of the marketplace later becoming the High Street which contributed to the integration of the English and French populations; their combined customs served as a model for later new towns, such as Burford and Ruyton.
Walter de Lacy funded the construction of a church, dedicated to St. Peter (patron saint not only of fishermen, but also of butchers, bakers, and various artisans), at the eastern end of the marketplace; further east, in a widened stretch of what would become St. Owen's Street, he may have established a small market settlement around his other late eleventh century foundation of St. Audoen's church, perhaps to service the castle. Walter's son Roger had tenants with burgess status at Hereford. A generation later a second church was built or perhaps rebuilt at the other end of the market area, possibly as part of a planned residential unit to accommodate population expansion within an existing suburb. Muddying waters further, in 1395 we hear that a grain market was, and had long been, held at the east end of Castle Street, a branch of the original crossroads on the Hereford site. The Tolsey later heard of in the main marketplace was probably used for toll collection and possibly for a court dealing with mercantile pleas. High Town henceforth became the focus for intensification of occupation and for the proliferation of shops.
Domesday on the whole uninterested in commercial maters reveals not only a large number of moneyers operating royal and episcopal mints, but also smiths manufacturing horseshoes, brewsters, and trade in salt produced at Droitwich. It also referred to the bishop's part of the town as a port (meaning market), whose residents all seem to have been holding by burgage tenure (although not considered burgesses in quite the same way as the tenants of the king and earl); the term 'port' had earlier been applied to Hereford in the Anglo-Saxon Chronicle and would be crystallized in the names of a number of fields just outside the city.
Despite the key role of Fitz-Osbern, Hereford remained primarily a royal borough, even though the earl and bishop had their own fees within it (the earl's forfeited to the king after the rebellion of Fitz-Osbern's son), and the castle was a royal possession; in line with most shire towns, the city was under the shared lordship of king and earl, but with the king the majority shareholder 103 Domesday burgesses being tenants of the king, and 27 of the earl. From a morphological perspective, however, Hereford developed from independent planning initiatives by king, bishop, and earl [for recent thinking on this, see Nigel Baker, The Historic Townscape of Central Hereford, Herefordshire Archaeology Report no.266 (2010), pp.16-24.] The original area of settlement, divided into the king's and bishop's fees, lay on the lower-lying terrace near the river, and contained the minster, episcopal palace, a probable royal residence, and the castle; it was accessed by what may have been the old Roman road, running north-south and crossing the river at a ford, while a second ford lay on the east side of the town and may have given access to an east-west route through or, more likely, along the north side of the site. The earl's new borough was on higher ground just north of the burh; this area came to be known as High Town. By the time that a defensive stone wall was put up around Hereford (except on the river side and where the castle bailey did defensive duty), in late twelfth and early thirteenth centuries, fronting an extension of the earlier earthworks circuit, the occupied area had about doubled from that of the original burh and had spread beyond even the extended line of defences; precisely when the earthworks extension, against which the stone wall was installed, was created is uncertain it may have been before or after the Conquest.
Notwithstanding its precarious border location which changed from liability to advantage as the border areas were pacified and trade with Wales burgeoned Hereford thrived, in part thanks to business generated by the needs of the cathedral and of the castle, which was also the county's administrative centre, an occasional royal residence, and a storehouse for accumulating military supplies a role that is shown stimulating industry in the Domesday Book entry. Growth in prosperity attracted immigrants who contributed to the further development of commerce and industry. The new marketplace gradually developed specialized areas for trades such as the butchers, fishmongers, cooks, drapers, and leather-workers, a Jewish community grew up nearby to provide money-lending services (albeit mainly to outsiders), and institutions for administering commercial activity found homes there. The market was too ancient to require a licence, but other evidence suggests it was held on Saturdays, for Hereford in 1230 brought a complaint into the king's court that a Saturday market at Leominster was detrimental to its own. The complaint initially produced no result, in part because Hereford's own market was temporarily suspended in 1231 because of the war with Wales (the king ordering the sheriff to take the city into the king's hand if any of the citizens contravened the suspension), but also because the court case proved thorny the lord of Leominster having no licence but able to defend his market on the grounds of some more general royal charter so a compromise was arranged in 1237 whereby the king authorized the Leominster market changed to Fridays, and instructed the sheriff to ensure the change was implemented.
In 1121 Henry I granted Bishop Capella a four-day fair in May at the feast of St. Ethelbert; around mid-century the Earl of Hereford approved this being extended to eight days, though perhaps this hit a problem, for in 1241 we find the king approving an extension from four to seven days. During fair-time the bishop was authorized to assume control over all trading activities in Hereford and the region within a five-league radius, which included the right to collect tolls at the city gates; at other times the bishop had the tithe of market profits (stallage and tolls). The fair can be seen as one element in the economic growth of the city, along with construction of a new cathedral, north of its Saxon predecessor, over the course of the first half of the eleventh century, and replacement of the bridge over the Wye with a sturdier stone version (ca.1100) incorporating a chapel. By the close of the century a thriving cloth industry is evident at Hereford and the Jewry had arisen just north of the marketplace.
On the other hand, as at Shrewsbury, the fair was the cause of conflict between burgesses and bishop, who argued that during the fair the entire city, or at least any commerce going on there, was under his fair jurisdiction. Some citizens tried to avoid fair dues by selling wool and leather from their houses, but the bishop complained to the king and the citizens were forced to foreswear the practice and agree to conduct their commerce only within the context of the fair, except as regarding basic foodstuffs (ale, wine, bread, meat, and fish). Another issue of conflict was whether the tenants of the bishop's fee could trade free of tolls in the city market, or whether this was a privilege limited to the king's burgesses, who held the city at fee farm. The latter, by royal charter of 1215, obtained recognition of their merchant gild and restriction of commerce within the city and its suburbs to gild members, or others to whom the city would license trading rights. However, an agreement of 1262 between bishop and citizens, following a scandalous outburst of violence directed against the bishop and his tenants, conceded to those tenants the right trade freely. Henry III's caretaker government granted a two-day fair in October to the citizens themselves in 1226, which the king himself confirmed and expanded to three days the following year. In 1284 a complaint was made that this fair was being damaged by the Michaelmas fair at Leominster, which had been licensed in 1265 but in 1282 shifted to slightly earlier dates in September; Leominster lost its fair as a result, but a few years later was compensated with grant of a fair in June.
Though the castle's importance as a generator of business diminished after Edward I's conquest of Wales, the cathedral continued to attract large visitation by pilgrims, who spent money in the city; improvements to cathedral and city churches created employment for artisans not only masons and carpenters, but glaziers, goldsmiths, and painters while the continued demand for high-quality Herefordshire wool and the growth of the cloth industry also helped the local economy weather the fourteenth and fifteenth centuries, although its peak of prosperity had probably been in the thirteenth. It was not until the Dissolution that some decline is clearly evidenced; this was due to a number of factors, including not simply the reduction of ecclesiastical clienteles but also the destruction of fulling mills owned by the cathedral chapter. Although somewhat remote from the main routes of international trade, and hampered by unsatisfactory navigability of the Wye, Hereford was able to maintain its role as a provincial market centre, the bulk of its trade being with adjoining counties.