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In Dan Jones' 'The Templars', a paragraph details in broad terms how the Templar Order assisted the reigning Pope, Gregorius IX, with his debt collection over numerous Catholic realms.

This is the provided description:

In 1240, Pope Gregory IX employed a particularly complex version of this, enjoining the French Temple to help him settle his debts: papal revenue collected in Scotland, Ireland and England was routed through the Templar house in Paris; the pope's creditors could then present themselves before the Parisian brothers bearing letters of credit and redeem these for outstanding payments owed to them from Rome.

However, this does not explain the mechanism. From what I understand, the Templars could provide a letter if someone brought money to one of their chapter houses and this letter could be exchanged at a different chapter house for the same value of money. This, on it's own raises some questions where if the money was changed from one form into another, a potential thief could still misappropriate the letter of credit and present it at yet another chapter house for the sum.

But, this papal plan seems to have been out of proportion to everything else -- hence I am wondering if someone can break the mechanism down a bit more to explain how the debt repayment plan worked in itsspecifics?

Did the Scottish, Irish and English Templar houses get the money directly (as in, did they own that year's tithe) or was it given to them by the local churchmen? Was one coin collected in Scotland the same value as one coin in the French realm? After that, how did the Parisian Temple know how much it could redeem the Papal debts for -- and did they do this in coin or similar letters of credit, to be exchanged somewhere else? It sounds dangerous for the Templars to commit to paying out a large number of coin from their Parisian branch while amassing stockpiles of the same in the countries further away, and transporting the coin would indicate that there was no specific benefit to having the Templars be involved with this (as the Pope could have sent his own ships to France with the money just as easily).

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This mechanism is describing the cheque. It was not sufficient to present the "cheque", one also had to establish one's identity as the "payee" - just as in a modern chequing transaction.

That this service was being provided suggests that there was already such a mechanism in place for internal use of the Templars, such that only the net transfers would have to be remitted in specie at some interval. Also, you are talking here about a well structured military organization. Generally such do not have the same difficulties in transporting large sums of money and valuables around that you or I might.

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    How did the Pope have an idea of what his revenues from those other lands would be? And why was it not easier to simply use the French incomes? – gktscrk Nov 10 '18 at 20:12
  • Open field agricultural economics are relatively non-volatile. With hundreds of years of predictive information a cultural recognition of what normal tithes percolated upwards to the papacy existed. – Samuel Russell Nov 10 '18 at 22:20
  • I've taken another look at the Wikipedia link you provided, Pieter, and I have to say that it does not really answer the question though the linked "History of Banking" page provides more information on the Templar system (any of their castles could have been used as a cash point, essentially). Could you expand your answer to explain what the benefit of such a system in this case might have been (and how the involvement of the Templars benefited the Pope)? – gktscrk Nov 11 '18 at 13:30
  • @SamuelRussell: Aren't you overestimating the use of statistics in that time and period? While they had hundreds' of years of experience of tax collection, I would consider it unlikely that any but the most brilliant of financial comptrollers managed to collate any more than a few years of it to predict future incomes. – gktscrk Nov 11 '18 at 13:31
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    @gktscrk precisely why I described it as a “cultural recognition of normal” rather than a statistical prediction – Samuel Russell Nov 12 '18 at 1:42

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