After the death of Saladin disputes arose among his sons, and the opportunity was seized of commencing a new crusade, the history of which is well known, and in which the Teutonic Knights took an active part.  At this time (1197) Henry VI, Emperor of Germany, gave the knights the monastery of the Cistercians, at Palermo, in Sicily, and several privileges and exemptions—­a transaction that caused considerable disagreement between the Pope and the Emperor.  The knights were, however, finally confirmed in possession of the monastery, and it became the preceptory or chief house of the order in Sicily, where other property was gradually bestowed upon the knights.

Henry de Walpot, the first grand master, died at Acre, in 1200, and was succeeded by Otho de Kerpen, who was an octogenarian at the time of his election, but full of vigor and energy, which he displayed by devoted attention to the duties of his office, and personal attendance upon the sick in the hospitals.  During the mastership of Otho de Kerpen, an order of knighthood arose in the north of Europe, which was afterward incorporated with the Teutonic order.  Livonia, a country situated on the borders of the Baltic, was at this time still pagan.  The merchants of Bremen and Lubeck, who had trading relations with the inhabitants, desired to impart to them the truths and blessings of Christianity, and took a monk of the name of Menard to teach them the elements of the faith.  The work succeeded, and Menard was consecrated bishop, and fixed his see at Uxhul, which was afterward transferred to Riga.

The mission, however, as it advanced, aroused the jealousy and suspicion of the pagan nobles, and they attacked and destroyed the new town, with its cathedral and other buildings.  The Bishop appealed to his countrymen for help.  Many responded to his call, and, as there was at that time no crusade in progress in Palestine, the Pope (1199) was persuaded to accord to those who took up arms for the defence of the Christians in Livonia the same privileges as were given to those who actually went to the Holy Land.

In consequence of these events a military religious order was founded, to assist in this war, called the Order of Christ, which was confirmed by Pope Innocent III, in 1205.  The knights wore a white robe, upon which a red sword and a star were emblazoned.  They maintained a vigorous and successful conflict with the heathen, till circumstances rendered it desirable that they should be incorporated with the Teutonic Knights.

In the mean time the Latins had seized Constantinople, and set up Baldwin, Count of Flanders, as emperor, and divided the Eastern Empire among themselves.  The Teutonic Knights received considerable possessions, and a preceptory was founded in Achaia.  Some time afterward another was established in Armenia, where also the order had obtained property and territory in return for service rendered in the field.  The order also received the distinction of adding to their bearings the Cross of Jerusalem.