Holy Money: How the Knights Templars got so Rich

The Knight Templars (1119 – 1312) were the most enterprising of religious institutions profiting from a wide spectrum of services that involved early forms of banking and transporting goods as well as people at a time when travelling, particularly from the West to the East was fraught with many dangers. The Order’s growing reputation as astute financiers was part and parcel of a lucrative business in facilitating and enabling trade for sovereigns, foreign merchants and pilgrims that lasted until the Order was dissolved around 1312.

The Order had its finger in many pies during its active years and was able to profit from commercial services that it could offer and exploit from a unique vanguard – as a religious order comprising of Monks but who also happened to be knights possessing outstanding military skills. First, the pilgrim rush brought the Templars prosperity, while trading with both Christians and Muslims created a chain of commerce that the knights were able to capitalise on from the renting of their ships to acting as exchange brokers.

From ownership of mills and vessels to exporting wine and horses as well as having been granted permission to stage markets and fairs by royal assent, the Templars were able to expand their economic and commercial operations to finance their military commitments in the East.

At Castle Pilgrim (near Alit, northern coast of Israel) for instance, the Order ran a salting mill where sea water was distilled to produce salt benefiting the production of glass, while a venture by the Order into cloth manufacturing brought about the first manufacturing processes to be mechanised by water mills. An astute decision by the Templars to let out mills rather than operating them created extra revenues without depleting their energies for military commitments such as their religious crusades in the East.

At first, it was the small fry who formed the Templars’ clientele – but larger fish soon saw the benefits of doing business with the Order whose role as champions of Christendom established their presence as soldiers of God from the West to the East. Travelling was extremely dangerous for people of means and wealth which risked the threat of attacks by pirates and marauders at sea. It was also inconvenient to carry large sums of money over such treacherous terrain.

As a religious institution with military might, the Templars were seen as the perfect answer to act as guardians of travellers and their valuables. An important part of the Order’s trading transactions was to transfer money to the East, which required ships to carry coins. Such a necessity allowed the transport of produce and provided a safe carrying service for pilgrims who would then ‘bank’ money and goods with the Templars for ‘safe storage’ to avoid the risk of theft and avoiding potential calamity.

What the Order offered their clientele was the means to travel in sturdy vessels while safe in the knowledge that their assets were securely registered and beyond harm, irrespective of what might happen en route to the ship’s destination.

The Templars were keen to uphold a reputation for transparency and honesty, even if in reality they cleverly circumvented universal laws surrounding the prohibited act of levying interest on loans.

They cannily devised a system where the interest covered the lender's risk and was calculated beforehand which included the amount borrowed. This sophisticated and early form of creative accountancy allowed the Templars to avoid the accusation of ‘Usary’ - the act of benefiting from ‘unethical interest’ which was forbidden in Medieval Europe.

One early problem of the Templars’ inventive bookkeeping was due to the fact that the Order wrote their transactions in code which could at times lead to volatile disputes. In one such case Louis IX of France (1214-1270) after having deposited a considerable sum of money, which he subsequently wished to draw on, was told that no such deposit could be traced.

Despite attempts to associate the Templars with the actual invention of the cheque and the banknote, it is unlikely such innovations can be solely credited to the Order before printing in the West had been invented in the mid 15th century. Also, the word cheque comes from the Arabic suggesting that the concept of I.O.U’s goes back to an earlier period of civilisation, while the Romans themselves dealt in bills and drafts with promissory notes used almost as currency.

Lombards (German people who ruled most of the Italian Peninsula) and Jews played a prominent part in the financing of the First Crusade and since all monies collected for the Holy Land were given to the Order for conveyance it is of little surprise that the Templars rose to great heights as financers.

Punishments for such offences ranged from imprisonment to permanent excommunication from the Order and in some cases death, which resulted in relatively few cases of theft or misappropriation of property. As a consequence, the Templars’ reputation for honesty and trustworthiness became a universal badge of honour. In one extreme case of criminal activity by members of the Order where three Templars murdered some Christian merchants, they were sentenced to be brutally whipped through various regions of the middle east before being incarcerated in Castle Pilgrim where they later died.