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 this
trade, many Venetians settled themselves in the city, and they soon
extended it very considerably, and introduced the manufacture itself into
Venice, with so much success, that the silks of Venice equalled those of
Greece and Sicily. The monopoly of the trade of the Black Sea was also
obtained by them, after the capture of Constantinople; and thus some of the
most valuable articles of India and China were obtained by them, either
exclusively, or in greater abundance, and at a cheaper rate than they could
be procured by any other route. In consequence of all these advantages,
Venice was almost the sole channel of commerce in this part of Europe,
during the period of the Latin empire in Constantinople. This empire,
however, was of very short continuance, not lasting more than 57 years.

In the interval, the merchants of Florence became distinguished for their
commercial transactions, and particularly by becoming dealers in money by
exchange, and by borrowing and lending