From the point of view of its economic status the Empire was in no condition to withstand an invasion. As territory was lost the proceeds of direct taxation fell off; increases in the customs duties were opposed and blocked by the Genoese and Venetians; the government lived from hand to mouth. In 1306 when the Catalan mercenaries had to be paid, Andronicus II put an end to the wheat monopoly exercised by the Italians. Another characteristic expedient of this weak government was the debasement of the coinage. But all the ordinary schemes for raising money must have failed by the middle of the century, for we find Anna of Saxony using the treasures of churches to pay for the war against Cantacuzene. Indeed, her court had reached a condition of extreme penury in 1347, when, at a coronation it was found that the imperial jewels had disappeared. The splendid buildings of the city were fast going to pieces. In Santa Sophia there were large cracks, which necessitated the erection of two of the existing great supporting buttresses that have enabled it to survive to our time the frequent earthquakes that disturb the city. In the absence of a centralized government the local administration lost all resemblance to the admirably constructed system of the earlier period of Byzantine rule when, as contrasted with Western Europe, it still preserved the efficiency and smoothness of Roman governmental traditions. The local authorities lived on the country, uncontrolled from Constantinople, except irregularly and ineffectively. In reality, under the name of empire, all varieties of local organizations existed side by side; some places were ruled by petty tyrants, while others were municipal republics. In the important port of Thessalonika, Italian precedents were closely followed. Here there were four classes of citizens, the notables, the clergy, the bourgeois, and in the lowest class the “populari.” Each class enjoyed complete autonomy. They were organized in trade corporations, had their own system of justice, and finally got supreme control of the town, turning it into a democracy under the presidency of their metropolitan. When Cantacuzene undertook to bring the rebels to reason, the archbishop, in pleading the cause of the city-state, declared that his republic was based on equality and justice, and said that its laws were better than those of the Republic of Plato. There was another factor in this state of anarchy, to wit, the religious dissensions, due to the willingness of some of the clergy to accept union with the Papacy and to introduce Latin customs, an attitude dating from the time of the Latin Empire. Apart from these questions of ecclesiastical policy, there was much discussion of theological subtilties concerning the existence of a supernatural illumination in the soul, a controversy which divided the Church and the imperial court. This trouble was settled by a synod, which decreed that those espousing the new doctrine should be imprisoned.