Why the Third Crusade went terribly wrong: Constantinople‘s Economic Decline, Invention of the Matapan – and Crusaders sacking the wrong Place


Constantinople was looted due to the fact that the representatives of the Papal army of crusaders were not really capable to calculate. This story is about a medieval debt trap and its bad consequences.

Come along with us on our journey through the world of money. Today we are stopping in Venice. We are in the reign of Doge Enrico Dandolo, that is to say between 1192 and 1205 AD.


On 1st June of the year 1192, Enrico Dandolo became the 74th elected Doge of Venice. And only some months later, the Third Crusade came to an end. It was a disaster. The German Emperor Friedrich Barbarossa had died for nothing. And in addition, the Christians of the West had gambled away their good relationship with the Byzantine Emperor.


However, Byzantium was also far from the peak of its power. The Byzantine fleet, for example, now consisted of a miserable 20 ships. It could not even fend off pirates.

Constantinople’s trade declined dramatically, which conversely meant that the flow of Byzantine coins to the West dried up. This was a particular problem for trading cities. Until now, substantial invoices had mostly been paid with Byzantine coins.


Venice took the initiative and created a new coin, the grosso or matapan. Grosso means “fat” in Italian, and for its time the grosso was indeed a particularly heavy silver coin. The word matapan, on the other hand, comes from Arabic. It refers to a seated figure, referring to the enthroned Christ on the reverse. This picture was based on the Byzantine models.


From Byzantine coins, we are also familiar with the handing over of a symbol of power by a saint. The Venetians changed the representation a little bit: On their coins the Venetian Dux, or as we say today, the Doge, receives a standard from St. Marc.


These coins were minted in large quantities, as Venice was using them to pay for its biggest financial adventure: In 1198 Pope Innocent III had called for another Crusade.

The Crusaders’ overland route was blocked. Finally, they were at enmity with the Byzantine Empire. So they needed a fleet, something only a significant naval power like Venice could provide.


Merchants reckoned they would have to build 200 ships in order to transport all the knights, squires and horses. Plus food for a year, all in all 85,000 marks of silver. That was the price. For this, the Venetians built a massive fleet in their arsenals.


Their chivalrous counterparts had given the nod without questioning the price. Arithmetic was beneath the dignity of a knight. And so they overlooked the fact that they would never ever be able to pay the approximate 20 tons of silver. So they were stuck in Venice. The Venetians insisted on payment before departure. And the Crusaders did not have enough money to pay.


Just to be granted a deferral of debt, the noble Crusaders were compelled to conquer the Christian city of Zara on behalf of Venice. And the real Crusade was still not paid for.


A solution was offered by Philip of Swabia and his brother-in-law Alexios, who was a son of the recently deposed Byzantine Emperor. If the Crusaders restored him to his office, he promised, the Byzantine state treasury would take over the entire cost of the Crusade.


At last the Crusaders set off, although not in the direction of the Holy Land. Their destination was Constantinople. And there, everything went wrong. No Byzantine Emperor had so much gold that he could satisfy the demands of the Crusaders. The Crusaders were frustrated and by February of 1204 they had enough. Well, they got what they needed. They sacked Constantinople.


Venice got its share, too. Enrico Dandolo secured relics, treasures and territories which more than covered the cost of constructing the ships. Even today, the horses of St. Marc testify to this tremendous booty. The Venetians brought them from Constantinople and placed them on the St. Marc’s Basilica in honour of their patron saint.


For it was of course the grace of St. Marc which allowed Venetian Doge Enrico Dandolo briefly to become one of the most powerful men in the known world. He would not return home. He died in Constantinople, where his grave can be visited today in the Hagia Sophia.

Signet Sunflower Foundation