As part of the process of a Guild Apprentice becoming a Guildman, each is required to write an essay on an aspect of the City of London or of the Guild which may be of interest to members.

Brendan Musgrave is a Dauntsey’s Apprentice, whose Master is Guildman Angus Macpherson. Brendan will convert to Freeman and Guildman on the 20th April 2017. His essay is found below:

London’s First Bank     

The city of London is steeped in a rich history of art, culture and heritage. It offers beautiful buildings that attract millions of visitors each year, as well as the forgotten cobble streets you’d do well to find. However, even with such a decorated history, can we add the creation of banking to the list?

If you stroll down Fleet Street and then turn your back on Chancery Lane, you will see a small stone archway which leads through to a quiet court yard. Easy to miss, yet integral to London’s history. If you pass through the stone arch, you will find, standing before you is Temple Church. Consecrated in 1185 and the home of the Knights Templar, a sect of warrior monks of a medieval religious order with a theologically inspired hierarchy.


Built by the Knights Templar, the church is in two parts: the Round and the Chancel are designed to replicate the holiest place in the crusaders world: the circular church of the Holy Sepulchre in Jerusalem. If you visit today you will see a beautiful old door and iron work, and if you look up you’ll see a tall column with a metal statue on it showing two knights riding a single horse, which represents the knights vow of poverty. Whilst spectacular in architectural design, especially with it’s impressive circular knave, you would be forgiven for not realising you were looking at London’s first bank.

Since the birth of Christianity, the visiting of sacred places has always been an important part of their religion. The pilgrimage to Jerusalem has long been tradition and one people to this day uphold. Jerusalem had been captured in the first crusade of 1099 and pilgrims started to travel thousands of miles each year to reach the holy place. However, on these long and arduous conquests, the opportunity to succumb to thieves and vagabonds increased. Therefore, these pilgrims needed protection. In 1118, the Knights Templar was formed in Jerusalem and the knights took it upon themselves to defend Christianity and protect the pilgrims on their road to the Holy land.

However, the pilgrims, carrying their worldly possession were seen as an easy target as the reward to maiming one was the complete finances the person had accumulated over their life time. Moreover, en route they needed to pay for food, transport and accommodation. However, the Templars had a solution to solve this. They offered a service, where a pilgrim could leave his money and possessions at Temple Church, in London, where he would be given a letter of credit. He could then undertake the pilgrimage to Jerusalem, under the protection of the Templars, and then ‘cash in’ his letter of credit to receive gold coins, thus a large proponent of modern banking was formed.

However, the Templars were not the first organisation in the world to provide such a service, similar things had been seen before in China, several centuries earlier, although this was the first that was not owned by the government. In this respect the Templars were effectively the first private bank, operating from their church in London. The victories the Christian armies had in the Holy land drove more people to visit and produced more money for the Templars. Along with the money they gained from this banking, as well as from protection and investments, meant their power and influence grew so quickly that by the 1200s they were financing deals for the monarchy. They even brokered deals for Henry II when he wants to buy the Island of Oleron of the North-West of Bordeaux. Moreover, the 1200s also saw the crown jewels kept at the temple as security on a loan.

Whilst this was revolutionary for the time, the Templars did more than just offer a deposit and withdrawal service. Many wealthy land owners also bequeathed their entire belongings to the Templars as they felt this would secure their place in heaven. Due to its vast sums of money accumulated over the years, which would have been many billions in today’s currency, the Templars were in a strong position to offer financial assistance to Kings and Princes across Europe, and even the Pope. However, this meddling in European powers would ultimately also lead to their downfall.

In the mid 12th century the Muslims became a force to be reckoned with under Saladin and fought back for control of the Holy land. A significant point was the pivotal Battle of Hattin, where Jerusalem was recaptured by the Muslims in 1187. From there on the Templars were facing their demise and with less Christians taking the pilgrimage to the Holy land, the organization lost its purpose and a large source of its income.

With the Templars headquarters in Paris, and King Phillip IV in dire need of financial assistance, he wanted to claim one of the largest reserves of wealth at that time. Rather than fight against the Templars, King Phillip IV used their own religion against them. The Knights were accused of apostasy and devil worship on Friday 13th 1307 (a date sometimes linked with the origin of the Friday the 13th superstition), and the two Grand Masters of the Knights Templar were arrested, tortured to confess their sins and burned at the stake. The order was then disbanded by the pope and London Temple was rented out to Lawyers, and in 1312 the temple was divided in to the Inner Temple and Outer Temple.

Today, we see London, and especially the city, as the world’s leading financial centre for international business and commerce. Estimates say London, with its population of 10.5 million generates 22 per cent of the UK’s GDP. The city of London skyline today produces views of towering glass skycrapers and the hustle and bustle of busy people going about their day, a far-flung idea from the hidden away church, that was once the centre piece of the English banking system.


Brendan Musgrave

April 2017



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