As the most lucrative branch of commerce of all the Italian states was that in the productions of the East, and as these could only be obtained through Constantinople or Egypt, each state was eager to gain the favor of rulers of these places.  The favor of the Greek emperor could be obtained principally by affording him succours against his enemies; and these the Venetians afforded in 1082 so effectually, that, in return, they were allowed to build a number of warehouses at Constantinople, and were favoured with exclusive commercial privileges.  Dalmatia and Croatia were also ceded to them.

We now come to the period of the crusades, from which may be dated the rapid increase of the commerce and power of the Italian states.  As none of the other European powers had ships numerous enough to convey the crusaders to Dalmatia, whence they marched to Constantinople, the fleets of Venice, Pisa, and Genoa were employed for this purpose.  But before they agreed to lend their fleets, they bargained, that on the reduction of any city favorable to commerce, they should be permitted to trade there without duty or molestation, and be favoured with every privilege and protection which they might desire.  In consequence of this bargain, they obtained, in some places, the exclusive right over whole streets, and the appointment of judges to try all who lived in them, or traded under their protection.

A quarrel which took place between the Venetians and the Greek Emperor Manuel, in 1171, is worthy of notice, as being connected with the origin of the bank of Venice.  The republic not being able to supply, from its own sources, the means of carrying on the war, was obliged to raise money from her citizens.  To regulate this the chamber of loans was established:  the contributors to the loan were made creditors to the chamber, and an annual interest of 4 per cent. was allotted to them.  If this rate of interest was not compulsive, it is a sure criterion of a most flourishing state of trade, and of very great abundance of money; but there is every reason to believe if was compulsive.

At the beginning of the 13th century, Constantinople was conquered by the Venetians, and the leaders of the fourth crusade:  this event enabled them to supply Europe more abundantly with all the productions of the East.  In the partition of the Greek empire which followed this success, the Venetians obtained part of the Peloponnesus, where, at that period, silk was manufactured to a great extent.  By this accession, to which was added several of the largest islands in the Archipelago, their sea coast extended from Venice to Constantinople:  they likewise purchased the isle of Crete.  The whole trade of the eastern Roman empire was thus at once transferred to the Venetians; two branches of which particularly attracted their attention,—­the silk trade and that with India.  The richest and most rare kinds of silk were manufactured at Constantinople; and to carry on