In the history of this 'city without Jews' - in which relations between the two communities would seem to have been well-established even if their actual form is not clear - the date 1385 is particularly important. That year the Venetian Senate granted the first licence to a group of Jewish moneylenders of German origin who had been allowed to reside in the lagoon. However, the Serenissima's decision was no unexpected turn-around: while it was true that all forms of lending at interest had been banned from the city during the previous century, the Venetian authorities had continued to allow Jewish bankers to operate on the mainland (in 1382, the city had signed an agreement with the moneylenders of Mestre, allowing them to charge interest rates of 10 to 12 per cent).
The licence granted in 1385 laid the basis for the formation of an established community - and was later followed by the concession of land on the Lido for use as a cemetery. But the situation was far from stable. Only a few years later - in 1397 - the Senate seized upon irregularities in a Jewish loan banker's business methods as a pretext for refusing to renew his licence. Jewish moneylenders were only to be allowed to stay in the city for fixed lengths of time and were also obliged to wear a yellow circle sewn onto their cloaks. Later, this sumptuary regulation involved the wearing of a cap (initially yellow and then, after 1500, red) until 1516 and the creation of the ghetto.
The situation changed radically after Venice's defeat by the League of Cambrai at Agnadello. In 1509 floods of refugees poured into the city as they escaped from Maximilian of Habsburg's landsknechts; many of these,' were Jews from the Conegliano and,' Vicenza (~) areas who had fled the brutality of the German mercenaries. In ever-increasing numbers, they took up residence in various parts of the city - at San Cassiano and Sant'Agostina, San Geremia and San Polo. But their relations with the local population, incessantly egged on to intoler¬ance by the Minorite Friars, were never easy. As peaceful co-existence seemed impossible, the ghetto was created so that the problem was settled without expelling the Jews (and thus losing con- trol over their capital).