After the First Crusade captured Jerusalem in 1099, many Christians made pilgrimages to various Holy Places in the Holy Land. However, though the city of Jerusalem was under relatively secure control, the rest of Outremer was not. Bandits and marauding highwaymen preyed upon pilgrims who were routinely slaughtered, sometimes by the hundreds, as they attempted to make the journey from the coastline at Jaffa into 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, emphasising the order's poverty.
The first headquarters of the Knights Templar, on the Temple Mount in Jerusalem. The Crusaders called it theTemple of Solomon and from this location derived their name of Templar.
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 favoured 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 armoured 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.
A Templar Knight is truly a fearless knight, and secure on every side, for his soul is protected by the armour of faith, just as his body is protected by the armour of steel. He is thus doubly armed, and need fear neither demons nor men."
Although the primary mission of the order was military, 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 used that document upon arrival in the Holy Land to retrieve their funds in an amount of treasure of equal value. 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.