the romance of the Third Crusade has led most historians and laymen to interest themselves primarily in the martial exploits of leaders such as Richard the Lion Heart, Philip Augustus, or Conrad of Montferrat. This habit tends to minimize the importance of the crusade, as the heroes achieved only modest victories in the Christian cause. The momentous changes that the crusade wrought on the workaday world of the Near East have been largely overlooked. For that reason, attention will be focused here on two points: the alterations in the accessibility to markets caused by the events surrounding the Third Crusade, and the rearrangement of the traditional spheres of commercial interest that these events and the crusade itself brought about for the major Italian commercial cities of Genoa, Pisa, and Venice. Both of these developments were to have devastating effects on these Italian cities, which dominated the economy of the Mediterranean, and on the crusading states that they largely supported.1 Before going into the effects of the crusade, a general picture is needed of the economic situation in the Levant on the eve of Saladin's conquest. Of major concern here is the movement of goods from the exotic East to Mediterranean outlets. One commonly used route went overland, splitting near Hamadan into three branches which went to Baghdad, to Antioch, and across the Black Sea to Constantinople. This was the traditional silk route in use since the days of the Roman Empire and travelled by Marco Polo at the end of the 13th century. The other two major routes crossed water and carried the spices of the East. One brought goods up the Persian Gulf to Basra for caravan shipment to Baghdad, then on to Antioch and Damascus for redistribution to the