The Knights of the Templars, a religious order of knights devoted to liberating the Holy Land from infidels, developed an international banking network in the twelfth and thirteenth centuries. At the opening of the fourteenth century, the vast wealth of the Templars fell prey to the king of France, who greedily launched a campaign of persecution, complete with burnings at the stake.
The Military Order of the Knights of the Temple of Solomon, founded in Jerusalem in 1181, lived next to the ruins of Solomon’s Temple and took on the task of keeping the Holy Land safe for pilgrims. Eventually owning castles all the way from England to Jerusalem, the Knights kept highways and sea lanes to the Holy Land open. After the fall of Jerusalem, the Templars retreated to Cyprus.
The Templars themselves followed an ascetic regimen, eating only two meals a day to the sound of scriptural readings and observing vows of chastity. On the battlefield a strict warrior code steeled the Templars to face death without flinching and left no room for surrender or defeat. Even as the Templars rose to become an international banking power, individual knights were forbidden to own money. A Christian burial was withheld from knights found with unauthorized money at death, condemning them to eternal damnation.
A series of papal bulls granted the Templars the privilege to retain the spoils of war. Also, like other religious orders, they received bequests, gifts, and donations. King Henry II of England made a handsome donation, hoping to find forgiveness for the murder of Thomas à Becket. Their castles provided safe and secure storage for money and other valuables, and their role as protector of highways and sea lanes enabled the Templars to transport income from their European estates to their headquarters in Jerusalem.
From providing depositories of safekeeping and transportation of valuables, the Templars expanded into banking, loaning money in Europe for delivery in Jerusalem, and financing kings and other knights. They held valuables of other knights and executed their wills. Philip II of France organized a force for the Crusade of 1190 and left his revenues to be managed by the Templars. The Templars’ castles offered a complete range of banking services, and popes and kings sought the financial services of the Templars.
The Templars’ headquarters in Paris boasted one of the largest treasure stores in Europe. Philip IV of France ran into financial difficulty and resorted to currency debasement more than once. He also removed the Templars from management of his finances. But only the vast treasure of the Templars could supply Philip with the gold and silver needed to reform France’s debased currency. Philip opened a vicious war of words with the Templars, accusing them of devil worship, sexual perversion, sex with corpses of noblewomen, and impregnating virgins in order to harvest their infants to make sacred oil. The alleged practice of sodomy among the Templars purportedly led to the fall of Jerusalem, an obvious reference to the destruction of Sodom and Gomorrah.
After confessions extracted by torture, Templar knights were burned at the stake. Philip pressured Pope Clement V to abolish the order on 22 March 1312. In abolishing the order the pope gave the treasury of the Templars to other religious orders, particularly the Hospitalers. The French government managed to extract a large share of the treasure that went to the Hospitalers as compensation for prosecuting the Templars. With the memory of the fate of the Templars still fresh, the Hospitalers yielded to Philip’s pressure.
The destruction of the Templars left a void in international banking that was soon filled on a smaller scale by the bankers of the Italian Renaissance.