In order to regain control of the custom duties, the emperor John VI Kantakouzenos made preparations to lower Constantinople's duties and most tariffs to undercut the Genoese in Galata. Still recovering from the civil war of 1341-1347, the emperor, with great difficulty, raised 50,000 hyperpyra from private sources  for a shipbuilding program for the expected war to come. When the tariffs and custom duties were finally lowered, merchant shipping coming through the strait bypassed Genoese Galata and diverted their ships across the Golden Horn to Byzantine Constantinople. The Genoese, financially hard-hit from this policy, declared war on the Empire, and in August 1348, a flotilla of ships sailed across the Horn and attacked the Byzantine fleet; despite their large scale preparations, the Byzantine fleet was destroyed by early 1349. The Byzantines retaliated by burning wharves and warehouses along the shore and catapulted stones and burning bales of hay into Galata, setting major parts of the city on fire. After several weeks of fighting, plenipotentiaries from Genoa came and negotiated a peace agreement. The Genoese agreed to pay a war indemnity of 100,000 hyperpyra and evacuated the land behind Galata which they illegally occupied; last, they promised never to attack Constantinople. In return the Byzantines surrendered nothing, but the Genoese custom duties remained in effect.. What happened second: the civil war or Genoese paying a war indemnity?