‘No, no, Tours!’ The King rubbed his hands, his unblinking eyes wide and expectant. ‘I want only to see the Byzantines . . . Come . . . your sovereign is impatient.’
John of Tours paused. The moment had come. ‘Sire . . . if I may . . . there is no gold, or at least an unremarkable amount by your standards. The last held by the Temple was lost after the Battle of Ruad.’
The King looked at him and the smile froze on his face. ‘What say you? No gold?’ There was a frown.
‘Only a little, sire, but I assure you . . . the bank is doing very well.’
‘It is?’ The King took this in and became preoccupied with clenching and unclenching his long tapered fingers, watching as they turned from red to white to red again. When he spoke, finally, his voice was tight to his chest. ‘Without gold, it is doing very well?’
‘I realise that you may not have expected it, sire, it is something not generally known, but it is a common practice.’
The King began to pace about with a reserved frantic energy. ‘Have I left you alone for months, with your inventories and your ledgers . . . waiting to hear to what extent I am rich, to find that your wretched bank has no gold? No . . . I did not expect it!’ He paused before John of Tours and his eyes and their pinpoints came at him with particular intensity. ‘How is it possible that business is brisk without it, Tours? How is it possible?’
The treasurer was struck with incertitude.
Philip looked behind him to his chamberlain. ‘Where is Fuinon?’ he shouted.
The chamberlain scurried off and when Philip returned his stare to the treasurer, the man shifted under its immediate passion.
‘You shall find everything in the ledgers, sire.’ He offered the book to Philip but was forestalled by the eyes contrived into slits and the corners of the small thin mouth pursed into a half-moon frown.
Then it came.
‘Shut up, Tours!’ the King shouted. He pushed the treasurer aside and came up behind the table, putting a hand on the many parchments that lay neatly stacked. He shouted again, ‘Shut up!’ and sent the papers flying. After that his face was serene and he went down upon the treasurer’s chair but found he could not fit his legs beneath the table so he splayed them out to one side like a clumsy pup. ‘Tell me, precisely, why it is that I have saved you from the Dominicans, Tours?’
The banker’s mind was struck by a sudden palsy; he swallowed and found his mouth as dry as sticks. ‘If I may . . . take a moment to explain it to you, sire?’
The King raised brows and gestured with a hand. ‘By all means!’
‘The axiom, simply put, is this: a bank may lend more than it holds. Shall I give you an example, sire?’
‘Hurry up!’
‘Let us imagine that the bank has at its disposal ten barrels of gold Byzantines, this amount is written into the ledger as an asset. Suppose then that the King of Aragon requires a loan of one barrel of gold Byzantines. We continue to own that barrel of gold because it will – we hope – at length return to us by way of a repayment. We enter it in the ledger as gold owed to us, and so gold owned by us. We may do this nine more times, until we have no gold whatever.’
The King sat forward with both hands on the table. ‘But then you have run out of gold, Tours! You can no longer lend or buy anything!’ He looked up staring at the treasurer and a moment later he let it out all at once: ‘Can you, you imbecile!’
John of Tours cowered before the tempest of his king’s disdain. ‘But this is the secret . . . to a certain degree the bank still has this gold and may lend it to others, though now it is only on paper as a binding order that entitles the holder to a particular sum.’
‘A binding order is only paper, Tours!’ He thumped the table. ‘Paper!’
‘Yes, but . . . because the Temple has a very good international standing . . . such an order or promissory note is as good as gold anywhere in the world! The bank may give out similar notes ad infinitum. All is entered into this ledger.’
The King took in a breath and let it out slowly with these words: ‘But what if you wish to buy something?’
‘I can see what you are thinking, sire, but when the bank purchases goods from its creditors it also uses only promissory notes, which are then entered in as expenses and liabilities. However, it is often the case that those creditors owe the bank in rents or taxes. In those cases all things are adjusted accordingly so that no florin need be exchanged. Everything is recorded meticulously down to the smallest amount. A bank may have very little gold, but wealth has been created without it. It is all in the use of ledgers, a little gift from our Arab friends . . .’ He ended out of breath, flat under the scrutiny of his superior’s intense regard. ‘The bank . . . sire, continues to grow . . .’