A Guide To The Knights Templar Banking System
A Guide to the Knights Templar Banking System
Though originally monks, the Knights Templar gained resources by being declared a charity by the church and also brought in funds as new members joined. They were poor due to their oaths of poverty, but were able to donate cash and property to the order. They also had outside business dealings, which brought in even more wealth. Their holdings were needed to support the knight’s campaigns. The knights had to support more than 4,000 horses and other animals. This included feeding them, keeping them housed and healthy, as well as replacing the stock when they died off, which due to disease and enemy killing, they had to do a lot. There was also the matter of training new knights as they joined and caring for them when they were hurt in battle. The knights had sworn themselves to poverty, so could not use any extra funds for themselves, this meant they had a lot of extra funds. Every man who joined and who owned property or had any kind of wealth, such as a business, turned it over to the Knights Templar Order. This first happened in 1127, when Count Thybaud of Champagne joined. Kings and nobles also gave the order cash donations or land.
The knights received certain privileges by kings and popes. For instance, the King of Spain, Alfonso I, gave them an exemption of tax on a fifth of all the wealth they received from the Moors. All of this and more made the Knights Templar very wealthy. Occasionally nobles would ask the knights to hold their wealth while they joined the crusades, knowing that there was no safer place or people to keep their money safe during their possibly years of absence.
When travelers visited the Knights Templar, they would present their valuables and land deeds, the knights would then give them a sort of deposit slip or note that listed what they were leaving with the order. With that note, travelers could provide themselves financing along the way. They would show it to Templar Knights in other areas and take out a withdrawal from their account. In this way, a person could safely travel without fear of robbery and still have access to his funds. This gave the Templar Knights even more power and gain through interest. As their “fame” spread, they got involved in loaning money out.
All this then led to their involvement with usury, which is when you lend money out, but there is either an initial fee for the service or an interest would be charged when payments were made on the loan. Thus, the Knights Templar Banking activities began, making them more of a financial institution than the guard they were originally intended for, and by 1150 they were more about protecting their own and other’s assets. Because of holdings such as farms, the building of castles and churches, as well as vineyards during the middle ages, the financial power they wielded both in Europe and the Middle East was extreme. They also were said to run their own fleet of ships so they could be involved in import/export and other manufacturing ventures. These activities in banking gave them great political status throughout the land. So powerful that the idea of usury was not even questioned by the church, which officially would have had to say, was forbidden, but instead found ways to overlook the act by calling it something else like rent rather than interest.
In 1187, came the Battle of the Horns of Hattin, which was a disaster and was a turning point in the Crusades. Saladin, who had been beaten in battle before by the Knights of Templar, was better prepared for this battle and because the Grand Master of the Templars was a poor strategist, the Templars were unprepared; they did not have enough water and were soon overcome by the desert heat. A year later, the Muslims had taken Jerusalem, which devastated the Knights Templar since their very reason for being was to support the Holy Land. While they tried to drum up support to fight back, they were unsuccessful and soon the last stronghold the Knights of Templar had was lost to the Muslims.
During this time of great wealth, their successes were noticed by the Knights Hospitaller and the Teutonic Knights, who were becoming concerned with how much power the Templars had. Many nobles were alarmed as well, they were nervous not only for financial reasons, but also because an independent army that was free to move about the borders without question, would be a threat to their power. There were also powerful monarchs who received loans from the Knights Templar to finance their interests, which included staging war. One such King was Philip IV of France who already had a lot of debt with the knights when he asked for another loan. When the knights declined, the king was furious and mounted an attack against them. King Phillip also probably quit supporting the knights as they had declared their wish to form their own state in SE France, much like that of the Teutonic Knights in Prussia, but this made the king uneasy as he owned land in that region. This led Pope Clement V to enquire into the order. He declared that the knights had broken church laws (not heresy as once thought). Thousands of the knights were arrested and anyone found harboring a knight was threatened with excommunication. After the scandal with the Templars, the Hospitallers also gave up banking. Ultimately, the arrests made the economy shift from military back to European money. It also removed any power the Churches orders had over the monies of the area.
Surely, the similarities of the Knights Templar banking system and today’s banking are shown here. They were basically the first multi-national financial institution. They learned to take care of their own networking; they made loans for a small fee, just as banks do today. They also offered foreign travelers a way to use money enroute. All that was needed was a note explaining what one had on deposit then the traveler could stop and withdraw from that amount along the way, paying a small fee for the service. Much as one does today when using traveler’s checks, credit, or debit cards. Another banking first was in their creation of safety deposits. They guarded funds against theft, while people traveled to Jerusalem. The Knights Templar though broken in the end, left behind a banking legacy.
Knights Templar Banking History
• History World covers religion and banking: 12th – 13th century AD and Bankers to Europe’s kings: 13th – 14th AD.
• Knights Templar and Free Masons article is a historian’s perspective of the knights and their history
• Templar History all about the knights, their mission and how they managed the financial infrastructure
• History of the Knights Templar a historical view of the knights and their organization
• Knights Templar Resource a complete history, including decline and popular culture
• The Knights Templar the crusades, money and legacy
Knights Templar Banking Activities & Usury
•After the Cathars tells the story of the knights banking activities and how the king and church panicked at their success.
• Liquid Travel the knights of Templar, their ports and their fleets
• Middle Ages site includes interesting Knights Templar banking facts, banking history, activities, usury and their decline.
• Jolly Roger The possible historic meaning of the Jolly Roger flags and their history with the Knights of Templar
• Activities of the Templars site looks at the Templar's architecture, administrative and banking systems.
• The Knights Templar site offers information on the Knights Templar banking system, their beginnings, their growth, and downfall.
Knights Templar Banking Legacy
• The Origins of Modern Banking article: The Origins of Modern Banking Are Intertwined With an Ancient Military Order
• Merchant Bank banking failures of yesterday and today
• The History of Money article takes a walk through the process of lending money through credit.