The Knights Templars were a Catholic military order founded in 1119, headquartered on the Temple Mount in Jerusalem through 1128. The order was active until 1312 when it was perpetually suppressed by Pope Clement V. The Templars became a favored charity throughout Christendom; they grew rapidly in membership and power. They were prominent in Christian finance. Templar knights, in their distinctive white mantles with a red cross, were amongst the most skilled fighting units of the Crusades.

Furthermore, non-combatant members of the order; who made up as much as 90% of their members, managed a large economic infrastructure throughout Christendom; developing innovative financial techniques that were an early form of banking; building its own network of nearly 1,000 commanderies and fortifications across Europe and the Holy Land, and arguably forming the world’s first multinational corporation.

The Templars and the Crusades

So the Templars were closely tied to the Crusades; when the Holy Land was lost, support for the order faded. Rumors about the Templars’ secret initiation ceremony created distrust, and King Philip IV of France – deeply in debt to the order – took advantage of this distrust to destroy them and erase his debt. In 1307, he had many of the order’s members in France arrested; tortured into giving false confessions, and burned at the stake. Pope Clement V disbanded the order in 1312 under pressure from King Philip. Furthermore, the abrupt reduction in power of a significant group in European society gave rise to speculation, legend, and legacy through the ages.

The Rise of the Knights Templar

After the Franks in the First Crusade captured Jerusalem from Muslim conquerors in 1099; many Christians made pilgrimages to various sacred sites in the Holy Land. Although the city of Jerusalem was relatively secure under Christians control; the rest of Outremer was not. Bandits and marauding highwaymen preyed upon these Christian pilgrims, who were routinely slaughtered, sometimes by the hundreds, as they attempted to make the journey from the coastline at Jaffa through to the interior of the Holy Land.

In 1119, the French knight Hugues de Payens approached King Baldwin II of Jerusalem and Warmund, Patriarch of Jerusalem, and proposed creating a monastic order for the protection of these pilgrims. King Baldwin and Patriarch Warmund agreed to the request, probably at the Council of Nablus in January 1120, and the king granted the Templars a headquarters in a wing of the royal palace on the Temple Mount in the captured Al-Aqsa Mosque.

The Temple Mount had a mystique because it was above what was believed to be the ruins of the Temple of Solomon. The Crusaders, therefore, referred to the Al-Aqsa Mosque as Solomon’s Temple, and from this location, the new order took the name of Poor Knights of Christ and the Temple of Solomon, or “Templar” knights. The order, with about nine knights including Godfrey de Saint-Omer and André de Montbard, had few financial resources and relied on donations to survive. Their emblem was of two knights riding on a single horse, emphasizing the order’s poverty.

The Knights Templar Order Accumulates Wealth 

The impoverished status of the Templars did not last long. They had a powerful advocate in Saint Bernard of Clairvaux, a leading Church figure; the French abbot primarily responsible for the founding of the Cistercian Order of monks and a nephew of André de Montbard, one of the founding knights. Bernard put his weight behind them and wrote persuasively on their behalf in the letter ‘In Praise of the New Knighthood’, and in 1129, at the Council of Troyes, he led a group of leading churchmen to officially approve and endorse the order on behalf of the church.

With this formal blessing, the Templars became a favored charity throughout Christendom, receiving money; land; businesses, and noble-born sons from families who were eager to help with the fight in the Holy Land. Another major benefit came in 1139 when Pope Innocent II’s papal bull Omne Datum Optimum exempted the order from obedience to local laws. This ruling meant that the Templars could pass freely through all borders, were not required to pay any taxes; and were exempt from all authority except that of the pope.

With its clear mission and ample resources, the order grew rapidly. Templars were often the advance shock troops in key battles of the Crusades; as the heavily armored knights on their warhorses would set out to charge at the enemy; ahead of the main army bodies, in an attempt to break opposition lines. One of their most famous victories was in 1177 during the Battle of Montgisard, where some 500 Templar knights helped several thousand infantry to defeat Saladin’s army of more than 26,000 soldiers. 

Knights Templar Creat An Early Form of Banking 

Although the primary mission of the order was militaristic; relatively few members were combatants. The others acted in support positions to assist the knights and to manage the financial infrastructure. The Templar Order, though its members were sworn to individual poverty, was given control of wealth beyond direct donations. A nobleman who was interested in participating in the Crusades might place all his assets under Templar management while he was away.

Accumulating wealth in this manner throughout Christendom and the Outremer; the order in 1150 began generating letters of credit for pilgrims journeying to the Holy Land: pilgrims deposited their valuables with a local Templar preceptory before embarking; received a document indicating the value of their deposit. Then they used that document upon arrival in the Holy Land to retrieve their funds in an amount of treasure of equal value. In fact, this innovative arrangement was an early form of banking and may have been the first formal system to support the use of cheques; it improved the safety of pilgrims by making them less attractive targets for thieves; and also contributed to the Templar coffers.

So based on this mix of donations and business dealing, the Templars established financial networks across the whole of Christendom. They acquired large tracts of land, both in Europe and the Middle East; bought and managed farms and vineyards; built massive stone cathedrals and castles; they were involved in manufacturing, import and export; and had their own fleet of ships; at one point they even owned the entire island of Cyprus. The Order of the Knights Templar arguably qualifies as the world’s first multinational corporation.

The Knights Templar Decline 

In the mid-12th century, the tide began to turn in the Crusades. The Islamic world had become more united under effective leaders such as Saladin. Dissension arose among Christian factions in and concerning the Holy Land. The Knights Templar were occasionally at odds with the two other Christian military orders, the Knights Hospitaller and the Teutonic Knights, and decades of internecine feuds weakened Christian positions, both politically and militarily.

After the Templars were involved in several unsuccessful campaigns, including the pivotal Battle of Hattin, Jerusalem was recaptured by Muslim forces under Saladin in 1187. The Holy Roman Emperor Frederick II reclaimed the city for Christians in the Sixth Crusade of 1229, without Templar aid; but only held it for a little more than a decade. In 1244, the Ayyubid dynasty together with Khwarezmi mercenaries recaptured Jerusalem. In fact,  the city did not return to Western control until 1917 when during World War I the British captured it from the Ottoman Empire.