The speakers were standing at the edge of the water in front of the Palace of St. Mark.  In the piazza behind them a throng of people were walking to and fro, gossiping over the latest news from Constantinople, the last rumour as to the doings of the hated rival of Venice, Genoa, or the purport of the letter which had, as everyone knew, been brought by the Bishop of Treviso from the pope to the seignory.

The moon was shining brightly overhead, and glittering in the waters of the lagoon, which were broken into innumerable little wavelets by the continual crossing and recrossing of the gondolas dotting its surface.  There was a constant arrival and departure of boats from the steps, fifty yards to the right of the spot where the speakers were standing; but where they had stationed themselves, about halfway between the landing steps and the canal running down by the side of the ducal palace, there were but few people about.

Francis Hammond was a lad between fifteen and sixteen years old.  His father was a merchant of London.  He was a man of great enterprise and energy, and had four years before determined to leave his junior partner in charge of the business in London, and to come out himself for a time to Venice, so as to buy the Eastern stuffs in which he dealt at the headquarters of the trade, instead of paying such prices as the agents of the Venetian traders might demand in London.

He had succeeded beyond his expectations.  In Venice there were constantly bargains to be purchased from ships returning laden with the spoils of some captured Genoese merchantman, or taken in the sack of some Eastern seaport.  The prices, too, asked by the traders with the towns of Syria or the Black Sea, were but a fraction of those charged when these goods arrived in London.  It was true that occasionally some of his cargoes were lost on the homeward voyage, captured either by the Genoese or the Moorish pirates; but even allowing for this, the profits of the trade were excellent.

The English merchant occupied a good position in Venice.  The promptness of his payments, and the integrity of his dealings, made him generally respected; and the fact that he was engaged in trade was no drawback to his social position, in a city in which, of all others, trade was considered honourable, and where members of even the most aristocratic families were, with scarcely an exception, engaged in commerce.  There were many foreign merchants settled in Venice, for from the first the republic had encouraged strangers to take up their residence there, and had granted them several privileges and advantages.