God's Bankers: A History of Money and Power at the Vatican

by Gerald Posner

  33 Richard A. Webster, The Cross and the Fasces: Christian Democracy and Fascism in Italy (Stanford: Stanford University Press, 1960), 14–15; Chadwick, A History of the Popes, 404.

  34 Seton-Watson, Italy from Liberalism to Fascism, 388–89.

  35 John F. Pollard, “Conservative Catholics and Italian Fascism: The Clerico-Fascists,” in Martin Blinkhorn, ed., Fascists and Conservatives: The Radical Right and the Establishment in Twentieth-Century Europe (London: Routledge, 2003), 32–33.

  36 Chadwick, A History of the Popes, 232; ibid., Lai, Finanze e finanzieri vaticani, 242, 243, n. 3; Italia e Principato di Monaco, 43, 80–84, Archivio degli Affari Ecclesiastici Straordinari, Archive for Extraordinary Ecclesiastical Affairs, Vatican Archives, Secretariat of State, Vatican City.

  37 The formal title for the cleric who ran the Holy Office of the Inquisition was Inquisitor General. Some prelates preferred Secretary of the Inquisition. Inquisitor General, which raised connotations of the dark Spanish crusade to convert Jews, was last used in 1929.

  38 Luigi De Rosa and Gabriele De Rosa, Storia del Banco Di Roma, Vol. 1 of 3 (Rome: Banco di Roma, 1982), 268; Account summaries listed in SdS, Spoglio di Pio X, fasc. 7, Rendiconto per il primo Trimestre del 1912, ASV, Rendiconto del secondo Trimestre del 1913, cited Pollard, Money and the Rise of the Modern Papacy.

  39 Alberto Theodoli, A cavallo di due secoli (Rome: La Navicella, 1950), 49.

  40 Richard A. Webster, “The Political and Industrial Strategies of a Mixed Investment Bank: Italian Industrial Financing and the Banca Commerciale, 1894–1915,” VSWG: Vierteljahrschrift für Sozial-und Wirtschaftsgeschichte, 61. Bd., H. 3 (1974), 354. See note 25, Webster, Industrial Imperialism in Italy, 367; Anna Caroleo, Le banche cattoliche dalla prima guerra mondiale al fascismo (Venice: Studio Bibliografico Malombra, 1976), 30.

  41 Lai, Finanze e finanzieri vaticani, 259; Pollard, Money and the Rise of the Modern Papacy, 100.

  42 Webster, Industrial Imperialism in Italy, 157.

  43 Webster, The Political and Industrial Strategies of a Mixed Investment Bank, 357–59, 362, 364.

  44 Riccards, Vicars of Christ, 69.

  45 Annibale Zambarbieri, “La devozione al papa,” Part of the collection of Fondazione per le scienze religiose Giovanni XXIII, Catalogo pregresso della Biblioteca Giuseppe Dossetti (1953–2000), Location G-I-a-29bis-(22/II), Bologna, 71.

  46 Webster, Industrial Imperialism in Italy, 150–55.

  Chapter 5: An Unholy Alliance

  1 Much is known about the behind-the-scenes politicking at the conclave that led to Benedict’s election since Vienna’s Cardinal Friedrich Gustav Piffl violated the rules by keeping a daily diary.

  2 Alvarez, Spies in the Vatican, 86–87.

  3 Walter H. Peters, Life of Benedict XV (Milwaukee: Bruce, 1959), 32–35.

  4 Riccards, Vicars of Christ, 74; see also Cornwell, Hitler’s Pope, 59.

  5 John Pollard, “The Vatican and the Wall Street Crash: Bernardino Nogara and Papal Finances in the Early 1930s,” The Historical Journal, 42, 4 (1999), 1081.

  6 George Seldes, The Vatican—Yesterday, Today and Tomorrow (New York: Harper & Bros., 1934), 246; John N. Molony, The Emergence of Political Catholicism in Italy: Partito Popolare, 1919–1926 (London, Croom Helm, 1977), 59.

  7 John F. Pollard, The Unknown Pope: Benedict XV (1914–1922) and the Pursuit of Peace (London: Bloomsbury Academic, 2000), 115.

  8 Molony, The Emergence of Political Catholicism in Italy, 59–61; Lo Bello, The Vatican Empire, 6263; see also Gollin, Worldly Goods, 437. For a counterview of Benedict’s financial directorship of the church, see Pollard, Money and the Rise of the Modern Papacy, 110–26.

  9 Douglas J. Forsyth, The Crisis of Liberal Italy: Monetary and Financial Policy, 1914–1922 (Cambridge: Cambridge University Press, 1993), 330.

  10 Klaus Epstein, Matthias Erzberger and the Dilemma of German Democracy (Princeton: Princeton University Press, 1959), 103–5.

  11 De Rosa, Storia del Banco di Roma, Vol. 1, 82.

  12 Ibid., Vol. 3, 101.

  13 Il Massager (Pisa), L’Eco di Bergamo and Il Corriere d’Italia (Rome), Il Momento (Turin), and L’Avvenire (Bologna); Pollard, “The Vatican and the Wall Street Crash,” 1081.

  14 Records of the Apostolic Delegation in Washington (DAUS), b. 70, Prestito a favore dell’Unione Editoriale Romana (1915–16), letter of Archbishop Farley to Archbishop Bonzano, January 5, 1916, ASV; see also Pollard, Money and the Rise of the Modern Papacy,118–19.

  15 Archives of the Vatican Secretariat of State, 1914–1918, 335, 833, 930; cited in Pollard, Money and the Rise of the Modern Papacy.

  16 Franz von Stockhammern was a German diplomat, based in Rome, responsible for intelligence and propaganda programs in Italy. Alvarez, Spies in the Vatican, 92–94, 98.

  17 Ibid., 91–93, 95–96.

  18 Henri Daniel-Rops [Henri Jules Charles Petiot], A Fight for God, trans. John Warrington (New York: E. P. Dutton,1966), 234.

  19 Dragoljub Zivojinovic, The United States and the Vatican Policies: 1914–1918 (Boulder, CO: Colorado Associated University Press, 1978), 12–14.

  20 Forsyth, The Crisis of Liberal Italy, 120.

  21 Gaetano Salvemini, Chiesa e stato in Italia (Milan: Feltrinelli, 1969), 384.

  22 General Directorate of Public Security (DGPA), H4, Vaticano, Notizie, Commissarato del Borgo, 1915, October 22, 1915, Archivio Centrale dello Stato, Italian Central State Archives, Rome (ACS).

  23 Alvarez, Spies in the Vatican, 92.

  24 William Renzi, In the Shadow of the Sword: Italy’s Neutrality and Entrance into the Great War 1914–1915 (New York: Peter Lang, 1987), 156–58; Epstein, Matthias Erzberger, 102.

  25 Renzi, In the Shadow of the Sword, 156–57; Alvarez, Spies in the Vatican, 92, 305.

  26 Peters, Life of Benedict, 127–38; Pollard, The Unknown Pope, 103–7.

  27 Memo (unsigned), March 24, 1917, Uffico Centrale d’Investigazione, busta 3, f. 39, Direzione Generale della Pubblica Sicurezza, Archivo Centrale dello Stato, cited in Alvarez, Spies in the Vatican.

  28 Letter, Monsignor Giuseppe Aversa to Cardinal Secretary of State, Pietro Gasparri, January 1917, Guerra Europe, 1914–1918: Iniziative Pace Santa Sede, January 1916–April 1917, Archivio degli Affari Ecclesiastici Straordinari, ACS.

  29 Alvarez, Spies in the Vatican.

  30 Frank J. Coppa, ed., Controversial Concordats: The Vatican’s Relations with Napoleon, Mussolini, and Hitler (Washington, DC: Catholic University of America Press, 1999), 84.

  31 Italian intelligence received reports that three ranking clerics in Switzerland, with covert connections to Vienna and Berlin, had drafted the Pope’s peace plan. That was never confirmed. When John Francis Charles, the British Envoy Extraordinary to the Holy See, later heard that, he dismissed it as ludicrous. See generally Alvarez, Spies in the Vatican, 107.

  32 Ibid., 110–11.

  33 Memorandum, Eastern Report No. 37, Foreign Office, October 11, 1917, 24/144/12, 109–11, British Cabinet Papers, National Archives, Kew, UK; see also Alvarez, Spies in the Vatican, 110.

  34 Pollard, The Unknown Pope, 68.

  35 Ibid., 103.

  36 Alvarez, Spies in the Vatican, 112. Italy’s anticlerical Foreign Minister, Baron Sidney Constantino Sonnino, was the force behind Article XV of the Treaty of London, the clause barring any Papal participation.

  37 For the widespread fear about the spread of communism in the aftermath of World War I, see Directorate of Intelligence, A Monthly Review of Revolutionary Movements in British Dominions Overseas and Foreign Countries, No. 32, June 1921, (CP 3168), 24/126/70, Cabinet Papers, National Archives, Kew, UK.

  38 Giovanni Spadolini, ed., Il Cardinale Gasparri (Grassina, Italy: Le Monnier, 1997), 376–77; Pollard, Money and the Rise of the Modern Papacy, 121.

  39 Molony, The Emergence of Political Catholicism, 59–60.

  40 Ibid., 59.

  41 Zambarbieri, “La devozione al papa,” 72; Chadwick, A History of the Popes, 3
98.

  42 Pollard, Money and the Rise of the Modern Papacy, 121; Scottá, ed., La Conciliazione Ufficiosa, Vols. 2, 3, January 3, 1917.

  43 James J. Hennesey, American Catholics: A History of the Roman Catholic Community in the United States (New York: Oxford University Press, 1981), 234–36.

  44 DAUS, letter of Bishop John T. McNicholas to Cardinal Giovanni Bonzano, September 27, 1919, Box 284, ACS, cited in Pollard, Money and the Rise of the Modern Papacy.

  45 Berry, Render Unto Rome, 61; Seldes, The Vatican, 249; see also “Una firma per l’Italia pensando al mondo,” L’Osservatore Romano, http://www.vatican.va/news_services/or/or_quo/cultura/2009/034q04a1.html); see also Indice Dei Fondi e relative mezzi di descrizione e di ricerca dell’Archivio Segreto Vaticano 2011, for additional reference points for Bonaventura Cerretti in the Vatican Archives, http://www.archiviosegretovaticano.va.

  46 Pollard, Money and the Rise of the Modern Papacy, 114.

  47 Lai, Finanze Vaticane, 12; Lo Bello, The Vatican Empire, 62, 131, 280. Some historians contend that no loan was necessary, and that Gasparri found the money he needed in a locked box in the late Pope’s desk. But Gasparri himself said there was only 75,000 lire in the Pope’s quarters, and he needed millions for the burial and ensuing conclave. Others suggest the American bishops made up the difference. But a loan from the Chicago Archdiocese did not come until 1928, six years after Benedict’s death. Professor John Pollard, a Papal historian, says the report of the loan is “almost certainly an exaggeration,” since a Rothschild archivist wrote him a letter in 1998 saying the bank had no record of it. However, if any loan was issued, it likely came from the Vienna branch of the Rothschilds. That cannot be confirmed since the Nazis seized those bank records in 1939 and they were never recovered.

  48 Riccards, Vicars of Christ, 103.

  49 Kertzer, The Pope and Mussolini: The Secret History of Pius XI and the Rise of Fascism in Europe (New York: Random House, 2014), Kindle edition, location 1628 of 10577.

  50 Ministry of the Interior, Direzione Generale della Pubblica Sicurezza (General Directorate of Public Security), 1926, Box 113, H4, Notizie Vaticane, reports of October 3, 1926, and November 1, 1926, ACS; Luigi Lazzarini, Pio XI (Milan: Sesto San Giovanni, 1937), 312.

  51 Pollard, Money and the Rise of the Modern Papacy, 132.

  52 John F. Pollard, The Vatican and Italian Fascism, 1929–32: A Study in Conflict (Cambridge: Cambridge University Press, 2005), 22.

  53 Peter C. Kent, The Pope and the Duce: The International Impact of the Lateran Agreements (New York: St. Martins, 1981), 5.

  54 See generally Thomas B. Morgan, A Reporter at the Papal Court: A Narrative of the Reign of Pope Pius XI (New York: Longmans, Green, 1937).

  55 See generally E. Pacelli, Erster Apostolischer Nuntius beim deutschen Reich, Gesammelte Reden, ed. Ludwig Kaas (Berlin, 1930), 58 (“Primate des Reichsgedankens/Triumph über den düsteren Dämon der Gewalt”).

  56 Kertzer, The Pope and Mussolini, Kindle edition, location 1684 of 10577; Edward R. Tannenbaum, The Fascist Experience: Italian Society and Culture, 1922–1945 (New York: Basic Books, 1972), 186–88.

  57 William Teeling, Pope Pius XI and World Affairs (New York: Fredrick A. Stokes, 1937), 129.

  58 Coppa, Controversial Concordats, 20–21.

  59 Pollard, Money and the Rise of the Modern Papacy, 133.

  60 Coppa, Controversial Concordats, 22–23.

  61 Alexander J. De Grand, Italian Fascism: Its Origins and Development (Lincoln: University of Nebraska Press, 2000), 46; Binchy, Church and State in Fascist Italy, 139–40.

  62 Pollard, “Conservative Catholics and Fascism: The Clerico-Fascists,” 39.

  63 William Teeling, Pope Pius XI, 112–13.

  64 Pollard, Money and the Rise of the Modern Papacy, 133.

  65 Pollard, “Conservative Catholics and Fascism: The Clerico-Fascists,” 38–39; John N. Molony, The Emergence of Political Catholicism in Italy: Partito Popolare 1919-1926 (London: Rowman and Littlefield, 1977), 130-31.

  66 Pollard, Money and the Rise of the Modern Papacy, 130, n. 9; Lo Bello, The Vatican Empire, 59–61.

  67 Caroleo, Le banche cattoliche, 120.

  68 Leone Castelli Quel tanto di territorio: ricordi di lavori ed opera eseguiti nel Vaticano durante il Pontificato di Pio XI (1922–1939) (Rome: Edizioni Fuori Comercio, 1948), 46–50.

  69 See generally Italo Insolera, Roma Moderna (Turin, 1971); see also Pollard, Money and the Rise of the Modern Papacy, 134–35.

  70 DAUS, b. 70, Prestito a favore dell’Unione Editoriale Romana (1915–16), letter of Bonzano to Gasparri, January 10, 1916, ASV, cited in Pollard, Money and the Rise of the Modern Papacy.

  71 Edward R. Kantowicz, Corporation Sole: Cardinal Mundelein and Chicago Catholicism (North Bend, IN: University of Notre Dame Press, 1983), 47, 562; Berry, Render Unto Rome, 64; Lo Bello, The Vatican Empire, 59. The Pope even asked a young American monsignor, Francis Spellman, for three cars. See Berry, Render Unto Rome, 64.

  72 Riccards, Vicars of Christ, 117.

  73 Ibid., 49; see also Pollard, Money and the Rise of the Modern Papacy, 136–37.

  74 Thomas E. Hachey, ed., Anglo-Vatican Relations, 1914–1939: Confidential Annual Reports of the British Ministers to the Holy See (Boston: G. K. Hall, 1972), 70–71.

  75 Seldes, The Vatican, 23.

  76 Kertzer, The Pope and Mussolini, Kindle edition, location 1067 of 10577; Lo Bello, The Vatican Empire, 64.

  77 Coppa, Controversial Concordats, 94. The suggestion that the fascists might reach an accommodation with the church caused an uproar at the party’s first national congress in 1919. For a fuller history of the fascist opposition to any accord with the church: Arnaldo Suriani Cicchetti, “L’Opposizione italiana (1929–1931) ai Patti Lateranensi,” Nuova Antologia, July 1952; see also Berry, Render Unto Rome, 63.

  78 The OSS concluded later that Tacchi Venturi was one of two ranking Jesuits who was a “tireless supporter of Fascist political movements in every country including Italy” and that he “initiated the negotiations for a concordat between the Vatican and the Fascist State.” J.C.H. to A.W.D. (Allen Dulles), OSS, September 10, 1942, RG 226, E217, Box 20, Location 00687RWN26535, National Archives and Records Administration (NARA), Washington, DC/College Park, Maryland. See also Riccards, Vicars of Christ, 107; “Why the Pope Chose to Sign the Concordat,” The New York Times, March 31, 1929; citations to the Lateran Treaty: a digital copy is available at http://www.vaticandiplomacy.org/laterantreaty1929.htm. It is an accurate English translation of the original maintained in the Vatican Archives.

  79 F. Pacelli, Journal de la réconciliation—With an appendix of records and documents, Libreria Editrice Vaticana, Vatican City 1959: these are notes of the negotiations by Francesco Pacelli, inherited from Eugenio Pacelli, under direction not to be made public until 1959, at which point they were published by Monsignor Michele Maccarrone, Director of the “Journal of the History of the Church in Italy.” See the discussion in Lai, Finanze Vaticane, 103.

  80 Francesco was a cousin to Ernesto Pacelli, who had been the financial advisor to Pius X. Salvatore Cortesi, “Italy to Indemnify Church, Rome Hears,” The New York Times, February 11, 1928, 4. The Times referred to Tacchi Venturi as “a scholar in history and literature” who was the Vatican’s “chief negotiator” but was also someone who “remains in the dark and is almost unknown.” It was not possible for the Pope to send his Secretary of State to the talks since the church did not yet recognize Italy’s sovereignty and it was considered more likely for there to be a leak if a high ranking official represented the Vatican. See Kertzer, The Pope and Mussolini, Kindle edition, location 1872 of 10577.

  81 The retiring Secretary of State, Pietro Gasparri, was Pacelli’s mentor and had strongly backed his appointment.

  82 Arnaldo Cortesi, “Vatican and Italy Sign Pact Recreating a Papal State: 60 Years of Enmity Ended,” The New York Times, February 12, 1929, 1. An original of the Lateran Pacts is maintained by the Vatica
n.

  83 Chivot, Vatican, 70; P. C. Kent, The Pope and the Duce: The International Impact of the Lateran Agreements (London: Macmillan, 1981), Ch. 9, 10.

  84 Coppa, Controversial Concordats, 95–99.

  85 Thomas J. Reese, SJ, Inside the Vatican: The Politics and Organization of the Catholic Church (Cambridge: Harvard University Press, 1996).

  86 Susan Zuccotti, Under His Very Windows: The Vatican and the Holocaust in Italy (New Haven: Yale University Press, 2002), 19.

  87 Gerhard Besier, with the collaboration of Francesca Piombo, translated by W. R. Ward, The Holy See and Hitler’s Germany (New York: Palgrave Macmillan, 2007), 67–71.

  88 Pollard, “The Vatican and the Wall Street Crash,” 1079. Pollard estimates the conversion was 19 lire to the dollar.

  89 Mussolini later tried discounting how much Italy gave the Vatican by claiming in a speech to Parliament that the billion lire in bonds was really worth “only” 800 million lire. Others tried minimizing the impact of such an enormous payout to the church by arguing that the Vatican would end up spending much of it back into Italy between employment, construction, and property purchases. Ibid, 1080; See also M. McGoldrick, “New Perspectives on Pius XII and Vatican Financial Transactions During the Second World War,” The Historical Journal 55, no. 4 (December 2012): 1030; Gollin, Worldly Goods, 438. See the text of the Lateran Financial Convention at http://www.concordatwatch.eu/showtopic.php?org_id=878&kb_header_id=39241.

  As a concession, the Vatican agreed not to sell the bonds it received as part of the settlement for at least ten years. That meant that the church had a direct stake in Mussolini’s success; see “Pope and Politics,” The Nation, December 11, 1937, 662.

  90 Francesco Pacelli, Diario della conciliazione (Libreria Editrice Vaticana, 1959), 19, 26, 39. See generally Pollard, Money and the Rise of the Modern Papacy, 138–43, and Lai, Finanze Vaticane, 8; see also Salvatore Cortesi, “Italy to Indemnify Church, Rome Hears,” The New York Times, February 11, 1928, 4.