Day: January 24, 2008
The business of banking relies very much on its independence from government.
For example, our currency is regulated by the governing council of the European Central Bank, comprising the six members of the executive board and the central bank governors of the 15 participating countries.
These 21 make a monthly decision as to interest rates and it is comparative interest rates which steady the euro as against the US dollar, Japanese yen, British pound and others.
Our man, John Hurley, may well bring to the table concerns expressed here, by ministers or others, but the bank is independent. Indeed, one of the most interesting acts done by a British Labour government in recent times has been the granting of independence to the Bank of England in managing the pound and, so far at least, it seems to have worked.
Many can remember a time when the principal bank for most families was the local post office, with its savings accounts, postal orders, money orders, telegraphic sending of money, etc. That was all people needed at the time.
The big, imposing, cut stone or brick commercial banks, with their mosaic floors and timbered panelling, were definitely not for the little man or woman. The austere formality of the buildings alone exuded an intimidatory aura.
These days, of course, with on-line banking and with supermarkets operating as financial institutions, the definitions have become ever more blurred.
But would it surprise you to know that the traveller’s cheque was in fact invented more than 800 years ago? And that there may well have been a couple of issuing branches in Limerick city and county?
In the year 1118, early in the time of the crusades, Hugues de Payens, Geoffroi de St Omer and seven other knights formed a military order dedicated to the protection of pilgrims on the way to the holy places in Palestine.
King Baldwin of Jerusalem gave them premises to the side of the site of the old Jewish Temple and they thus became known as the Poor Fellow Soldiers of Jesus Christ and the Temple of Solomon.
The knights took vows of poverty, chastity and obedience and they had both Benedictine and Cistercian rules imposed on them. From 1172, some members who were fully ordained priests were added to their numbers, and their fame and numbers grew and grew.
They expanded across Christendom, taking upon themselves a broader remit to defend Christianity in general. They received lavish gifts and bequests as their presence expanded. Their existence in Ireland after Strongbow’s arrival in 1170 was meant to underpin the Anglo Norman footprint and we are told that they had a house in Limerick and went on to found Garrigogunnel Castle overlooking the Shannon Estuary and Newcastle West which guarded the way into Kerry. So there might have been three, maybe even four “branches” of the Templars here in Limerick during the 1200s.
Crucially, the Knights Templar were not responsible to any national king. They held their authority from the pope and from nobody else. Their grand master behaved and expected to be treated as a prince and considered himself equal to any sovereign in Europe.
And the wealth of the order allowed them not only to protect pilgrims, but also to help finance their pilgrimages.
Across Europe and within Palestine, Templar houses served as fortified hotels, safe resting places from which pilgrims could move on to the next similar establishment.
It would have cost a fortune to go on a pilgrimage to the holy places, and carrying gold carried grave risks. So the Templars invented the traveller’s cheque.
It worked like this: a pilgrim and his entourage would arrive at a Templar stronghold near his own home and hand in an agreed amount of gold or silver, or maybe granted some land. In return for this, he would be given an official receipt, and he’d set off on his journey.
On arrival at the next Templar house, he could purchase whatever services, perhaps shipping and fodder, needed for the next stage of the adventure and a new receipt would be issued representing the balance remaining from the original amount. And so on.
Upon the traveller’s safe return, he would be given back whatever was unspent, although, as with all banks, terms and conditions probably applied. But, being wholly independent of the local kings at all stages along the way, the mega-rich Templar order held money locally which nominally existed somewhere else. So they also invented bogus offshore investment accounts.
But it couldn’t last.
The biggest concentration of Templar Knights was in France and King Philip IV was annoyed that, while he was deeply in debt, the Templars had lands and money to flaunt. So, in the early 1300s, with the connivance of Pope Clement V, a very bloody clampdown was suddenly inflicted on the Templars, with show trials hearing the most perjurous testimony, mainly from expelled members of the order.
Very many knights perished and the land and booty was divided up between the king, the pope and remaining orders of knights, most notably those of St John.
The Templar presence in Ireland was also wound down, although not brutally. The Irish dioceses, which had been formalised in the year 1111, were still in a state of flux as between native Irish and Anglo Norman incumbencies.
Older Irish monasteries, which had been the engines of Irish Christianity, were being overtaken by Continental orders of monks, friars and nuns who were very much part of the mainstream church, without the freedom of thought and of administration which the native monasteries had enjoyed.
But these new monasteries, because they were elements of multinational religious organisations, seem also to have acted as international go-betweens and may even have continued in a smaller and less formal way the banking and foreign exchange practices of their luckless Templar brethren, although the crusades, having finally failed to recapture Jerusalem and the Holy Sepulchre, meant that the pilgrim routes hardly mattered much any more, and they probably never did from Ireland anyway as we had plenty of holy places of our own to visit.
Organised banking came about here with the commencement in business of the Bank of Ireland in 1783, the charter of which required its directors to take an oath undertaking to oppose popery.
Disorganised banking, unfortunately, also came about in the succeeding years and the turmoil of 1798 and subsequent such events caused many to fail, leaving gullible investors penniless and with nowhere to look for assistance.
It’s been about 700 years since a sealed receipt on Templar parchment was passport, visa, traveller’s cheque, pass book and reasonable guarantee of safe passage. The euro has removed money borders across half a continent, so it is only now that we are getting back to the multinationalism which our remote forefathers might have been quite used to.
By Martin Byrnes in the Limerick Leader