Manuel, who was being hard pressed by the Turks, was, on his side, willing to make terms. He agreed to restore the republic to its privileges as they existed in 1171, and to pay fifteen hundred pounds' weight of gold as compensation for the Venetian property which he had seized. It is doubtful whether any considerable portion of this sum was ever paid. Certain buildings in Constantinople were delivered to the Venetians in 1189, probably in part payment.

Relations of the republic with Relations

As the century closed, the relations of the republic with Relations Constantinople appeared to have improved. In 1198 constantan alliance was concluded by two envoys, sent for tinopie. that purpose by Henry Dandolo, now become doge, and was followed by an imperial bull promising an indemnity to the Venetians, and binding them on their side not to assist Alexis, the son of the deposed Emperor Isaac. The old soreness, however, still remained. The jealousy of the favors heaped on the Pisans, the non-payment of the indemnity for the property seized in 1171, and, above all, perhaps, the bitterness of Dandolo, which had increased with his age, all tended to make Venice hostile.

She had, indeed, recovered the territory which had been taken from her by the empire, and her citizens had now as many commercial privileges as were possessed by the subjects of the empire themselves. She recognized, however, that she held these privileges on a precarious tenure, and that the empire no longer cared to give to the republic exclusive rights; and the recollection of these facts and of her grievances, joined with the knowledge of her own strength and of the imperial weakness, combined to make her hostile. The very closeness of the alliance which had existed between the empire and Venice had weakened the former where she had the most need of strength.

Constantinople had had such powerful opponents against her in the east, the north, and the southwest, that most of her attention had been concentrated on her armies. She had never altogether neglected her fleet, as the Venetians themselves had learned to their cost in the war between 1171 and 1175. But she had acquired the habit of looking for the aid of Venice in every struggle which had to be fought out at sea, and the result was that the strength of the imperial navy had been gradually lessening, until, when the hour of supreme trial came, her fleet was powerless to resist the invader who had been her hired ally.

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