Knights Templar | World History | Khan Academy

We've already done multiple videos on the Crusades, but what we're going to focus on in this video is how the Crusades helped catalyze the start of what many historians consider to be the first international financial institution, and that is the Knights Templar.

So let's just make sure we have a good hold on the context. Over here, we have our timeline. It's occurring during the High Middle Ages. In other videos, we saw the First Crusade start at the end of the 11th century, started really by Pope Urban II, with the purported reason to help the Byzantines take land from the Muslims, especially the Holy Land. The First Crusade is, for the most part, successful, but they don't return that land to the Byzantines. They set up what are known as Crusader States or Crusader Kingdoms, including the Kingdom of Jerusalem.

Just to read this timeline that I drew up here, green shows the time period when at least Jerusalem is controlled by the Muslims. Red shows when Jerusalem is controlled by Western European powers or by these Crusader kingdoms, which were essentially Western European. These red parts on our timeline show when the actual Crusades occurred. So you see the First Crusade causes the change of control of Jerusalem from the Muslims to the Western European Christians.

Once Jerusalem was under their control, and it would continue to be under their control for roughly 90 years, you could imagine that many pilgrims from Europe went to the holy sites in the Holy Land, especially in Jerusalem. But this was not an easy journey. Not only was it a long journey—these are the paths that I showed in previous videos that the Crusaders took—but this could also be the paths that many of the pilgrims took in order to go to the Holy Land. You could imagine a journey of this distance, going through multiple kingdoms in this time period, could be incredibly dangerous. Many of the pilgrims were actually robbed or sometimes worse on their way to the Holy Land.

So in 1119, a small group of knights led by Hugh de Payens goes to King Baldwin II, King of Jerusalem. Remember, they set up this Crusader State, the Kingdom of Jerusalem, headquartered on the Temple Mount. These knights tell King Baldwin II and Patriarch Warmund, the patriarch of Jerusalem, they say, "We would like to protect these pilgrims on their way to Jerusalem." These guys think it is a good idea, and so in 1120, they give them some space, a headquarters on the Temple Mount, in order to start their group.

If you translate the Latin version of their name, it translates to "Poor Fellow Soldiers of Christ and the Temple of Solomon." Now, the reason why it says "and the Temple of Solomon" is because they were headquartered on the Temple Mount, and the Al-Aqsa Mosque is believed by many to be on the site of the original Temple of Solomon. But this is often shortened to the Knights Templar. This is their symbol: two knights riding on a horse to show their poverty.

But they don't stay poor for long. They are shortly thereafter recognized by the Pope, and many people start donating money to this order. Many more people volunteer to be Knights Templar, and so over the remainder of the Crusades, they become an important institution in medieval Europe. Now, most folks often associate the Knights Templar with being knights. You can see here one of the knights on horseback. Here you see the knights protecting pilgrims on their way to Jerusalem, and they did do that. They did protect the pilgrims, and they were also active in battle during the Crusades thereafter.

But it turns out that even though at the peak there were on the order of 20,000 Knights Templar, only about 10% of them were actual soldiers—were actually these warrior monks, as they're sometimes called. The rest of the Templars created this fairly significant complex infrastructure to do multiple things to support the goal of the Knights Templar. Perhaps most significantly, they developed a sprawling financial enterprise of the time.

If you were in London and you wanted to do a pilgrimage to the Holy Land, you would need resources in order to do that, and you would want to have access to your wealth once you got to Jerusalem. You can imagine if you're traveling over a long journey, taking gold coins with you—not only would they be heavy, but more importantly, it would be dangerous. A lot of people might want to take that gold from you.

So one of the services that the Knights Templar developed was that you could go to their temple in London, essentially deposit your money, and they'll give you a note of credit saying that we, the knights, owe you a certain amount of money. Then you make your journey, and when you get to Jerusalem, you can give that note to the knights there, and they will give you your money.

Now, this is something that we take for granted today. I can go to an ATM machine anywhere in the world, and for the most part, I can put in my ATM card and get access to money. But there's a lot of infrastructure that makes that happen. Today, we have telecommunications, we have satellites that help information go back and forth, we have servers that keep track of all of that data. They didn't have that in the Middle Ages, and so you can imagine this is a very powerful idea that I could deposit money one place and then withdraw it somewhere else.

We still don't fully understand how the knights were able to pull this off. It requires a lot of trust. How were they able to authenticate the notes of credit at any of these points? Now, not only did they do this type of deposit and withdrawal in multiple locations, but they also—because they had all of these deposits and people were also donating money to them just to support their cause—they were able to provide loans, oftentimes loans to very powerful individuals like kings and nobility. They were often brokers in major transactions. This is the reason why historians really do consider them perhaps the first true international bank.

In other videos, we talk about how in 1187, Saladin is able to retake Jerusalem. But then in the Sixth Crusade and the Baron Crusades, it goes back to Christian hands. But then, in 1244, it's retaken again by the Muslims and it stays under Muslim control all the way until the end of World War I. So, with Jerusalem taken in 1244, the whole goal of the Knights Templar, the whole purpose of their existence, starts to become less important, although at this point, they are a significant and influential financial institution.

As we go to the end of the 13th century, the whole Crusader mentality starts to lose steam. You have the Eighth and Ninth Crusades, but they aren't successful. And as we get into the early 14th century, you have this character, Philip IV, King of France. He has incurred a lot of debt in order to have wars, especially with England, and a good bit of this financing comes from the Knights Templar. He is a powerful man looking for solutions to his debt situation, and he realizes one solution is maybe just to arrest the people who you owe money to.

Then, not only do you not owe money to them, but you can seize their assets. Philip IV does exactly that, famously on a Friday the 13th in 1307. He arrests many Knights Templars, including the Grand Master, the leader of the Knights Templar, Jacques de Molay. He tortures them, and they eventually confess to a whole bunch of things, but then they retract that confession, and they're not willing to retract the retraction. So in 1314, Jacques de Molay, as well as other Knights Templar, especially in the leadership who do not agree to those confessions, are burned at the stake in Paris. This is considered the end of the Knights Templar.

Although there are many legends of how they have continued on, perhaps in secret, the Knights Templar are, to this day, a subject of fascination. There are many legends associated with them, but one of their biggest historical contributions that isn't often talked about, but we know happened, is that they really laid the foundation for what we today consider modern international banking.