Declare your citizenship for a town of choosing... find the trade minister (usually on the docks) and he will have a wooden crate next to him. Drop 5k ingots into the crate. And at that point, you should have respected status.
After that, you have to go to the town stone, click it, and select 'utilize trade deal' and you will get the buff noted. It's good for 24 hours, and after that you will need to go back to the stone to select it again.
Here is some additional information:
City Loyalty - UOGuide, the Ultima Online Encyclopedia
Hope that helps!