The square has always been the centre of the Lesser Town. It is not located on a flat area but on a slanting geological terrace and the terrain goes upward towards Hradčany Hill. This location was selected because it was close to fords and far enough from frequent floods on the unregulated Vltava River. The marketplace had been there far before the establishment of Prague when there was no bridge over the river. It was located on the site of today’s upper part of Malostranské Square or Sněmovní Street.
In the early Gothic period the square was located on its current site and was the same size as today. The central part of the square was taken up by small shops, the romanesque Church of St Wenceslas, the parsonage, the town hall and other buildings. Later the Church of St Nicholas, the guild house and Jesuit College were built there. During the reign of Rudolf II the first department store in Prague (house No. 4) was opened and other buildings which are still preserved and these cut the square into two unequal parts - lower and upper. Houses that lined the square used to belong mostly to the richest Lesser Town burghers and noblemen who built splendid palaces under the Prague Castle. In 1541 the house Na baště (At the Bastion) (today connected with Šternberský Palace No. 7) burst into fire and it swept through almost the whole Lesser Town and Hradčany.
The Square was the centre of historical events of the Lesser Town and sometimes also the whole Bohemian Kingdom. There was a town hall in the square, which used to be a place of assembly, and the scaffold was placed there. The Square is an integral part of the royal route which was used for the coronation processions of Czech Kings. The highest provincial authorities also had their seats there.
Demolition of several houses on the south side of the Square at the turn of the century resulted in the creation of an opening called U klíčů (The Keys) which facilitated the development of modern technology, particularly the introduction of tram transportation to the Lesser Town. In the north of the Square, in the recently reconstructed Smiřický’s and Šternberk’s Palaces we can find offices of the Parliament of the Czech Republic.
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