is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

Money and the Rise of the Modern Papacy: Financing the Vatican, 1850-1950

Author(s):Pollard, Stephen F.
Reviewer(s):Hayes, Patrick J.

Published by EH.NET (June 2005)

Stephen F. Pollard, Money and the Rise of the Modern Papacy: Financing the Vatican, 1850-1950. New York: Cambridge University Press, 2005. xx + 263 pp. $85 (cloth), ISBN: 0-521-81204-6.

Reviewed for EH.NET by Patrick J. Hayes, Department of Theology/Philosophy, Marymount College of Fordham University.

Someone once let it slip to Yves Congar, the influential Dominican friar and peritus at the Second Vatican Council (1961-1965), that the cost of the conciliar proceedings to the Holy See amounted every year to 1,400,000 lire (about $2,250,000).[1] This does not include travel by the bishops and their experts, the costs of which were mainly borne by the national episcopal conferences. One can imagine the sum for the First Vatican Council (1870) when the financial resources of the Holy See were all the more meager, and when there were only a handful of organized episcopal conferences.

However, imagining such costs is now made considerably clearer by Stephen Pollard, a Fellow at Trinity Hall, Cambridge University. This historian of Italian fascism and biographer of Pope Benedict XV (1914-1922) has prepared a study on Vatican financial institutions that sheds light on the emergence of the modern papacy in its ecclesial and international affairs. In both instances, money is the common denominator. The Church’s mission is not served without recourse to Peter’s Pence. The Vatican’s relationship with foreign states, particularly Italy, depends in part for its diplomatic leverage on the investments it keeps abroad. Pollard follows a vast money trail over three continents and even peeks into the popes’ desk drawer or under his bed where, legend has it, varying sums of petty cash were stored and only to be used in the event of an emergency or a pontiff’s death.

It should not be assumed that the popes were wheeler-dealers. In fact, Pollard makes his case that they were more often hemmed by their ignorance of financial markets and that whatever success the Holy See demonstrated in remaining in the black could be traced to the heads of the Amministrazione per i Beni Santa Sede before 1929 or its successor agencies. Thus, while Pollard’s book is about the papacy, it is more often about the managers of the pope’s finances, a highly select group of ecclesiastics and lay people well disposed toward keeping the Vatican solvent. They are a fascinating lot, in part because they hold the ear of those who occupy the chair of Peter unlike any other bureaucrat excepting the Secretary of State. In at least one instance, the pope’s chief financier and the Secretary of State were one and the same: Giacomo Antonelli, who oversaw the Papal Treasury from 1850-1876. Described by one author as the Italian Richelieu, not only was Antonelli one of the main architects of the Holy See’s intransigence over nationalism, liberalism, and modernity, he attempted a massive reorganization of the budget for the Papal States.[2] His efforts at balancing the budget depended upon borrowing from the Rothschild’s banking house which, though many saw it as unseemly to accept Jewish lending practices, seemed to fit the needs of the Vatican quite well. The relationship gives a first instance of selective amnesia on the part of Church officials, who seemed nonplussed by usury, or even the rights of labor or the common good — staples of the Church’s emerging social ethic.

The book moves in chronological order beginning with the reign of Pius IX, whose early “liberal” period gives way, in 1850, to a series of measures designed to solidify papal power. It proceeds in due course through the reigns of Leo XIII (1878-1903), Pius X (1903-1914), Benedict XV (1914-1922), Pius XI (1922-1939) which is marked by an excurses on the fallout from the Wall Street crash (1929) before moving into the penultimate chapter on Pius XII (1939-1959). After Italian unification in 1870, income could have jumped if only the Vatican had acquiesced and accepted the subsidy promised by the Italian government. But on principle, the Holy See refused such overtures and still maintained the spiritual and temporal trappings of pope-kings — a burgeoning papal household staff and their pensions, ceremonial spectacles, and increasingly generous grants to relief and development programs around the world and at home.

The intermingling of political, economic, and ecclesial policies became more pronounced in the years after Pio Nono, but the capabilities of the Vatican’s money managers was, in the main, equal to the task. Under Leo, the appointment of Monsignor Enrico Folchi dedicated one person to administering the income generated from the Vatican property holdings. He was also placed in charge of investing the surplus from Peter’s Pence. A model of caution, Folchi was replaced by a layman, Ernesto Pacelli, whose family would assist in the negotiation of the Lateran Pacts of 1929 (a windfall for the Vatican) and produce the future Pope Pius XII. With Pacelli, Leo had a confidant and a willing capitalist. Funds were moved off Italian shores and diversified in properties and companies throughout Europe. However, by the time of Pius X’s death, Pacelli’s interests in the Banco di Roma (of which he was a co-founder) would seriously jeopardize the solvency of the Holy See’s portfolio. Under Benedict, who Pollard and other writers view as a shrewd politician and churchman, but a hapless financial manager, the Vatican’s income declined precipitously. Doubtless, the war years (Italy declared war in May 1915) contributed to this, given the virtual absence of large numbers of faithful able to attend papal audiences and the inability of bishops to make their ad limina visits and so carry the funds from Peter’s Pence from their home diocese to the pope. A series of losses as a result of collapsed banks or poor stock investments, suggests Pollard, meant that “Benedict did not leave the Vatican with a cash reserve at the end of his reign” (125). Increasingly, the ensuing decades found the popes turning to the American Church for assistance in meeting its shortfalls, especially the sees in Boston, New York, and Chicago. America was no longer the backwater that it was once considered in Roman circles. It soon became the cavalry for near monthly setbacks, brought on by repeated deficits run by Vatican Radio and L’Osservatore Romano. Profits from the sale of Vatican stamps could hardly be expected to offset these cost overruns.

Both Pius XI and Pius XII had pontificates that built upon the concordats begun under Benedict. The diplomatic front was the future of the Vatican’s economic gains and the outreach carried on by the Holy See in those nations where emergency contributions were disbursed, were often motivated by a return of future good will by those countries. The most tangible expression of the return on this investment was a government’s swift, and often bloody, crackdown on communism. Fascist governments were tolerated and used toward entrepreneurial means and ends, which included policies of non-interference in the Vatican’s banking, investment, or building projects abroad. By the 1930s, a web of such projects extended throughout Europe, the financial centers in the United States and South America. Profits were quickly used to construct a number of new buildings in and around the Vatican. New infusions of cash from America and a softening of relations with Italy allowed for further improvements, including the completion of several construction projects (e.g., the Railway Station and the Ethiopian College), and later the restructuring of the Via Conciliazione, the Roman thoroughfare leading from the tips of the Bernini colonnade in the Vatican to the Tiber River. “After sixty years of uncertainty and difficulty, the papacy would never be poor again” (148).

Pollard points to the influence of Bernardino Nogara as the principal agent in this transformation. Nogara was the first non-Roman to assume control of the Vatican’s finances. This son of Milan came to the job with a number of international contacts and continued to view the diplomatic and economic spheres as one and the same. The Vatican was the center of a global Church. It should thrive in financial markets worldwide. Nogara’s commercial activity has several hallmarks: the appointment of family to key posts in Vatican offices (his brother Bartolomeo ran the Vatican Museums); the installation of Milanese colleagues on boards of corporations where the Vatican had a significant or controlling stake (especially in South America); and the handling of sensitive information through use of the diplomatic pouch, a procedure that proved to be useless during the Second World War, when allied intercepts were routine. For his Italian loyalties during the war, Nogara was often placed in a precarious position with Pius XII, to say nothing of the allied forces, who tracked his activities with great vigilance. Pollard notes that Nogara’s impact on Vatican financial matters has had the unavoidable stamp of his successes for all future achievements. “The ‘wind from the North,’ as Italians describe influences from Milan and the other financial centers, had brought about a permanent change in Vatican financial culture and practice that would survive even Nogara’s death in 1958. Nogara had finally inserted the Church into the structures of international capitalism” (215).

This is quite a claim and one that will be borne out or refuted only in the coming decades. The last thirty years of Pollard’s study is seriously handicapped by not having access to the archives for those offices dealing with the papal finances since 1870 and other Vatican archives after 1922. Nevertheless, Pollard is to be credited with providing a conservative reading of the many journalistic or popular accounts of the Holy See’s economic state, such as George Seldes’ book The Vatican: Yesterday, Today, and Tomorrow.[3] Pollard frequently supplements his analysis of these works through published diaries or archival materials from countries other than the Vatican.

Such synthetic skills are, however, often marred by several typographical errors or noticeable errors of fact. For instance, St. Thomas Aquinas did not live in the fourteenth century but in the thirteenth (75), the motu proprio Sapienti Consiglio of June 1908 would not have appeared in the Acta Apostolicae Sedis for the year 1900 (83, n. 17; the AAS begins its run in 1909), Pollard misspells the name of former America editor Thomas Reese, SJ, on a number of occasions (e.g., 83, n. 18 and in the bibliography) and misspells Berkeley, California (104, n. 140), and so on. I find that Pollard lacks a certain sensitivity toward the Church in America for the period of his study, particularly from the nineteenth century. Much more could be said, for instance, about the Knights of Columbus (whose archives in New Haven, Connecticut, are woefully under-utilized, especially those materials related to Count Enrico Galeazzi and the administration of Vatican City) or about the links between the American sees, the Austrian Leopoldine Society, and the Congregation of the Propaganda.

Yet, for its main purposes, the present study does supply a realistic picture of how the Vatican economy remains viable, despite its occasional scandals, fickle global markets, political unrest, and the Church’s own social teaching. As one Vatican pictorial put it years ago: “Questions concerning the finances of the Holy See are met with the cold answer: ‘The Holy Father does not publish a budget.’ And it is true that there are not a half-dozen men in the world who know how much the Vatican has or where it goes.”[4] John Pollard widens the circle.


1. Cf. Joseph Komonchak, citing Congar’s journal, in Giuseppe Alberigo and Joseph Komonchak, eds., History of Vatican II (Maryknoll and Leuven: Orbis and Peeters Press, 2003), IV: 1 n. 1.

2. Cf. Carlo Falconi, Il cardinale Antonelli: vita e carriera del Richelieu italiano nella Chiesa di Pio IX (Milan: A. Mondadori, 1983). For more on Antonelli, Frank Coppa, Cardinal Giacomo Antonelli and Papal Politics in European Affairs (Albany: SUNY Press, 1990).

3. Cf. George Seldes, The Vatican: Yesterday, Today, and Tomorrow (New York: Harper and Brothers, 1934). More recent studies, from which Pollard frequently borrows, include Benny Lai’s Finanze e finanzieri vaticani tra l’Ottocento e il Novecento, da Pio IX a Benedetto XV, 2 vols. (Milan: A. Mondadori, 1979) and Carlo Crocella, “Augusta miseria.” Aspetti della finanza vaticana nell’et? del capitalismo (Milan: Nuovo istituto editoriale italiano, 1982).

4. Cf. Ann Carnahan, The Vatican: Behind the Scenes in the Holy City (New York: Farrar, Straus, and Co., 1949), 127.

Patrick Hayes teaches theology at Marymount College of Fordham University in Tarrrytown, NY and is a co-director of Passing on the Faith/Passing on the Church, a three-year project sponsored by the Curran Center for American Catholic Studies at Fordham. He has written numerous articles for the New Catholic Encyclopedia on the Roman Curia and for Catholic News Service on the papacy. He is also the Review Editor for H-Catholic.

Subject(s):Financial Markets, Financial Institutions, and Monetary History
Geographic Area(s):Europe
Time Period(s):20th Century: WWII and post-WWII