Eric II already involved his son Eric IV young in government affairs. Eric IV succeeded his father in 1368 as Duke of Saxe-Ratzeburg-Lauenburg. Neighbouring territories had been at feud with the Saxon dukes Eric II and his cousin Albert V since 1363. In 1378 Prince-Archbishop Albert II reconciled with Eric IV, who had married Albert's niece Sophia. Eric IV and Albert II signed a peace, concluding to settle future disputes – especially on the Saxon exclave Land of Hadeln, neighbouring the prince-archbishopric – without using violence. Between 1392 and 1398 Eric IV carried out the constructions of the Stecknitz Canal, connecting via Elbe and Trave the North Sea with the Baltic Sea. This was the first European canal crossing a drainage divide, and was especially important for trade with the entire Baltic Rim. In 1400 Eric IV confirmed Hamburg's purchase of Ritzebüttel from his local vassals Lappe. In 1394 Hamburg had conquered the fortress of Ritzebüttel in order to make it its stronghold to protect the estuary of the river Elbe. In 1401 Eric IV inherited Saxe-Bergedorf-Mölln from his cousin of second degreeEric III. Eric IV reunited the two branch duchies into Saxe-Lauenburg and subsequently shared his reign in the reunited duchy with his sons Eric V and John. However, most of Saxe-Bergedorf-Mölln had been alienated, such as the Herrschaft of Mölln and the Herrschaft of Bergedorf, the Vierlande, half the Saxon Wood and Geesthacht, all of which Eric III had pawned to the city of Lübeck in 1370. Eric III Duke of Saxe-Ratzeburg-Lauenburg had further entitled Lübeck to take possession of these areas, once he had deceased, until his heirs would repay the credit and thus redeem them and simultaneously exercise their right to repurchase Mölln, requiring altogether a total sum of 26,000 Lübeck marks. Still in 1401 Eric IV, supported by his sons Eric V and John, forcefully captured the pawned areas without any repayment, before Lübeck could take possession of them. Lübeck acquiesced. In 1407 Eric IV pawned the northern part of Hadeln to Hamburg, four years later the southern part to Bremen. In 1411 Eric IV and his sons Eric V and John IV pawned their share in the Vogtei over the Bailiwick of Bederkesa and in the to the Senate of Bremen including all "they have in the jurisdictions in the Frisian Land of Wursten and in, which belongs to the afore-mentioned castle and Vogtei". Their share in jurisdiction, Vogtei and castle had been acquired from the plague-stricken Knights of Bederkesa, who had dropped into decline after 1349/1350.
