A Scholar's Advice

Edward III's annual income was thirty thousand pounds, France's annual income was over eighty thousand pounds, while the Knights Templar earned at least six million pounds a year. The Knights Templar's annual income alone equaled the combined income of two hundred Britains and more than seventy Frances.

Edward III was plainly reneging on the debt. With a loan of nearly five hundred thousand pounds plus fifty percent interest, how could Britain, with an annual income of thirty thousand pounds, possibly repay it?

According to historian Paul Gallagher in his article "Venice Thus Triggered the World's First and Most Severe Global Financial Collapse," this bankruptcy far exceeded the economic crisis of the 1930s in terms of population affected, reaching nearly fifty percent of Europe's population. Coupled with the spread of the Black Death, this Great Depression lasted from 1340 to 1440, and Europe's economy suffered a full century of decline.

Unlike today's global economic crises, during that financial crisis more than six hundred years ago, fourteenth-century Europe consisted mostly of city-states. Nations had not even been established yet, and no government had the authority to regulate banks and credit or force them into orderly bankruptcy. This was entirely different from today's world, where countries could join forces to rescue the market.

During that period, apart from the Church distributing food, farmers had no way to survive. Every day, crowds lined up outside churches waiting for relief.

Paul Gallagher concluded, "It was like a myth. These clearheaded bankers were led astray by belligerent, extravagant kings, forced—or foolish enough—to lend them money, causing newly sprouted private capitalism to regress once more. In the famines, wars, and Black Death that followed, nearly thirty million Europeans perished. Only if bankers remained calm, upheld free trade, and kept themselves separate from warlike, profligate kings could cities