How the Vatican Succeeded in Business Without Really Trying IV

IF THERE IS one common quality of popes it is that they are, necessarily, lonely men. Several popes have commented on their loneliness. In a rare moment of candor, Pope Paul VI made this loneliness clear to some guests during a private audience. “Some people think,” he said, “that a pope lives in an atmosphere of superior serenity, where everything is beautiful, everything is easy. . . . But it is also true that the pope has cares, coming from his human littleness, which he faces every moment. This sometimes conflicts with his duties, his problems, his responsibilities. This is a distress which sometimes tastes of agony.”

Pope Pius IX, one of the loneliest and least fortunate popes in all Vatican history, must indeed have tasted agony when he had to face, all but alone, the loss of more than two thirds of the Vatican’s landholdings and when, after Rome was taken, he went into voluntary “exile” behind the Leonine Walls. Let us trace those dusty events, for they bear heavily on the theme of this book.

After 1815, when the Congress of Vienna restored the papal lands, which for years had been part of Napoleon’s empire, the Vatican found itself with a Brobdingnagian parcel of land that sheared completely through the middle of the peninsula and separated the six Italian states. These states, or duchies, were a political reality that had for centuries made Italy nothing more than a “geographical expression.” The so-called Papal States, some of which came into the Vatican’s possession through donation (mostly before the ninth century) and some through the sixteenth-century conquests of Cesare Borgia (son of Pope Alexander VI), and which, several times in their history, were curtailed and abolished, consisted of some 16,000 square miles that included a population of a little over three million inhabitants in the regions of Latium, Umbria, the Marches, and Emilia-Romagna—a territory sprawling across the peninsula from the Tyrrhenian Sea to the Adriatic, bounded on the northwest by the Kingdom of Lombardo-Venetia, southeast by the Kingdom of Naples, and west by the Grand Duchy of Tuscany and the Duchy of Modena.

Papal rule over this territory was inefficient. The people who lived in it were Roman Catholics, but they did not like the idea of being governed by priests. Although taxes were light, almost nonexistent, industry and commerce were entirely undeveloped; most of the people lived by begging. On more than one occasion foreign soldiers had to be called in to bring order to sectors where disturbances had broken out. When Pope Pius IX assumed office in 1846, he made a strong effort to introduce reforms—but the Pope was not a man of the world, nor did he have political gifts and economic know-how. During the first twenty-four months of his reign, Pius IX made concessions that upset many of his cardinals.

Tariffs were lowered, and commercial treaties were signed with other nations; railways were constructed; the law courts were reorganized, and local councils were set up.

But the Pope was destined to fail as a temporal sovereign. With the coming of the Risorgimento (Italy’s unification movement), Pope Pius could not continue to hold the Papal States, which are now comprised within the provinces of Bologna, Ferrara, Forli, Ravenna, Pesaro and Urbino, Ancona, Macerata, Ascoli-Piceno, Perugia, Rome, and Benevento. But for the intervention of French armies, this land would have been lost much earlier. When the Kingdom of Italy was formed in 1860, the Papal States were reduced to 4,891 square miles (with a population of about 692,000) to include the Comarca of Rome, the legation of Velletri, and the three delegations of Viterbo, Civitavecchia, and Frosinone. In September 1870, however, when the Franco-Prussian War forced France to withdraw its garrisons from papal soil, Italian troops marched into Rome and terminated the temporal power of the Pope.

Refusing to recognize the fait accompli, Pius voluntarily made himself the “prisoner” of the Vatican. For the next fifty-nine years the popes who followed Pius IX —Leo XIII (1878-1903), Pius X (1903-1914), Benedict XV (1914-1922), and Pius XI (1922-1939)— also enclosed themselves in voluntary captivity in the Vatican. This self-imprisonment kept the so-called Roman Question alive for over half a century; not until the signing of the Lateran Treaty in 1929 did the Vatican accept compensation for its territorial loss. Only then did the long exile behind Vatican walls come to an end.

Not much can be said about the Vatican’s financial situation from 1815 to 1929, for very little is known about this era. However, it appears that in 1848 the Papal States had, by good sense and economy, brought about a balance between receipts and expenditures. But, according to an obscure statement published by a Father Cha-mard in the Annales Ecclesiastiques, this equilibrium was apparently upset in 1859.

“Without doubt,” wrote Father Chamard, “from a financial point of view, the intervention of France in the settlement of the pontifical debts has diminished the annual charges, but it should not be forgotten that even after the settlement, the papal treasury still has to pay out in interest $4,267,542. If to this sum is added the ensemble of expenses calculated for 1869 at $7,848,485, the total sum arrived at passes $12,000,000. But the ordinary resources of the Sovereign Pontiff cannot support more than half this sum. Therefore $6,000,000 is the amount the faithful must supply.”

To help the Vatican meet its expenses, the voluntary contribution known as Peter’s Pence was revived in the United States in 1868, when the second Plenary Council of Baltimore decreed that a collection be taken up for the pope once a year in all American churches. Announcing the restoration of the tax, Herbert Cardinal Vaughan made some frank disclosures about the Vatican’s financial position:

The financial condition of the Holy See from the date of the return of the Pope from Gaeta to the year 1859 has become each year more satisfactory. . . . But in the month of September 1859, Pius IX was despoiled of two thirds of his states. The Romagna, or fifteen provinces, were invaded and annexed to Piedmont. By this act the revenue of the Holy See, which had been 54,000,000 francs (or £2,100,000, or$10,800,000), was reduced to 28,000,000 francs. This might still have sufficed both for the administration of the five remaining provinces and for the government, but for the debt.

The debt amounted to 24,000,000 francs a year. It hadbeen contracted on behalf of all the provinces making up thePapal States. To the fifteen provinces annexed by Piedmontbelonged 18,000,000 to 19,000,000 of the interest to be paid, as their fair proportion. The robber, however, refused to takeover the burdens with the stolen provinces. . . .

Within six weeks of the occupation of the Romagna by thePiedmontese a cry for Peter’s Pence had arisen in England . . . exactly three centuries after it had fallen away under Elizabeth. . . .

The sum total in Peter’s Pence paid into the apostolic chamber from the end of 1859 to the end of 1865 was 45,600,000 francs. Nearly the whole of this sum was, we know from the note of M. de Corcelle, the French ambassador in Rome, employed in payment of the debt and in meeting the deficit created in the papal treasury by the Piedmontese invasion. Considerable sums continued to be collected and laid at the feet of Pius IX up to the last year of his reign. . . . On theaccession of our Holy Father, Pope Leo XIII, fabulous reports were circulated as to the wealth accumulated in Peter’sPence. This was done by enemies of the Church to deceive the people and dry up the stream of their loving gifts. But thefact is that the small sum which had been invested has again and again been diminished during the last two years in order to meet the absolute necessities of the Holy See.

But, you may perhaps inquire, What are the actual necessities of the Holy See?

The actual necessities of the Holy See are the actual requirements of Christendom. It is therefore for Christendom to meet them. . . . The actual income of the Holy See, derivable from permanent and settled sources, is said to have been reduced by spoliation to £60,000. . . . Finally, as to the personal expenses of the Holy Father, they form a sum soinsignificant as to be absolutely inappreciable in the generalexpenditure. Personally sparing and truly mortified, his habitsare those of a tertiary of the poor and humble St. Francis.

Coming now to the income actually required, it has been estimated that the smallest sum that will suffice for the Holy See and the central government of the Church is about£350,000. It is said that all told about five thousand persons, including old impiegati [employees], are dependent upon the Holy See. The sum we have mentioned, if divided equally, would not afford to each of these the wages of a commonEnglish mechanic, while leaving nothing for the Pope’s privy purse, for household expenses, for diplomatic expenses, for fabrics, for libraries, for offices, for printing and stationery, and for other inevitable incidental charges.

Whether the sum finally collected from the Peter’s Pence of 1868 sufficed was never made known. But in July of 1870, the Vatican floated a loan of $200,000 from the House of Rothschild. Estimates at the turn of the century indicated that the Vatican needed $4 million a year to make ends meet.

During this period, the Vatican had its then-usual sources of income. There were monies from direct taxa- tion—that is to say, from fees attached to various functions like marriages, baptisms, and funerals. The sale of official stamped paper for documents always brought in some revenue. Also there were legacies (which in some instances reached astonishing sums). There were also gifts that came from pilgrims in Rome; some pilgrimages brought groups of a thousand or more men and women, each of whom by tradition would leave a gift of money, never less than a dollar from American visitors. These small gifts added up. Another important contribution to the Vatican treasury in those days came from the domains of Assisi, Loreto, and Padua, from which land taxes were exacted. A percentage of the offerings received at the Shrine of Lourdes also helped fill the Pope’s coffers. Masses were sold (to mitigate the purgatorial sufferings of the dead), as were relics (articles of saints’ clothing, eating utensils saints had used, etc.), as were images of the Madonna, as were candles and rosaries—and pieces of straw from the straw bed of the self-imprisoned Pope Pius IX. Coupons—repayable in heaven—were sold. And last but not least, there was the sale of annulments.

But this income wasn’t enough, apparently. Several times before the signing of the Lateran Treaty, the Vatican had to dispose of some of its properties in Rome in order to meet expenses and deficits. In 1880, to give Pope Leo XIII a helping hand, a group of noblemen whose families had been closely allied to the Church for centuries founded a bank, the Banco di Roma, on behalf of the Vatican. With capital supplied by the friendly aristocracy, the Banco di Roma mostly concerned itself with the acquisition of real estate. In 1882, the bank bought the controlling interest in an English company that supplied water to Rome, and the company changed its name to La Societa dell’Acqua Pia Antica Marcia. The Vatican eventually took over the company, and ran it until 1962, when most of its aqueducts, mains, tubes, pipes, and equipment were sold to a private syndicate. In 1885, the Banco di Roma bought control of Rome’s trolley and bus system, too. But, by 1898, the bank had twice been forced to reduce its capitalization and was close to failing. It barely managed to survive until Bernardino Nogara intervened and put it back on its feet.

The lack of business know-how exemplified in the operation of the Banco di Roma kept the Vatican just about barely even for the half century before World War I. But, despite financial slumps with which none of the popes seemed able to cope, the Vatican chose not to make public its financial position.

Somehow, the Vatican managed to keep afloat during World War I, but after the war the Vatican was still trying to learn how to swim in the swirling currents of twentieth-century economics. In 1919, the Pope sent a representative to the United States to negotiate a loan believed to be in the vicinity of $1 million. But the Vatican apparently went about it in the wrong way, and the loan never materialized. The Vatican was rescued, however— by the Knights of Columbus, which that year had planned a pilgrimage to Rome. The visiting delegates brought with them a gift to the Pope of approximately $250,000. As far as the public record is concerned, the only other time in history that the Pope engaged in money- raising negotiations was in 1928, when a Vatican loan of $1.5 million was floated through George Cardinal Mundelein; the loan was backed by Church property in Chicago worth several million dollars.

Financially, the Vatican was in trouble after World War I. But very few people knew about it. By 1922, when Pope Benedict XV died, the papacy was well-nigh bankrupt. Like all of his predecessors, Benedict had been generous. But, unlike his predecessors, Benedict had no idea how much money he was giving out to charity. When he assumed the pontifical chair in 1914, he made no attempt to find out how much was in the apostolic sugar bowl. Benedict gave out money faster than the Vatican machinery could bring it in. In his desk drawer the Pope kept huge sums, and he would hand money freely to any priest who came to him with a tale of woe. The overgenerous pontiff also made personal contributions for the creation of schools, convents, missionary settlements, and the like. Never did he give a thought to where the money was coming from.

A seemingly authentic story is told about Benedict’s meeting with a bishop who was then engaged in building a convent in Palestine. The bishop, visiting Benedict on other matters, had been warned by papal advisors not to mention the project to His Holiness because there was no more “loose change” in the pontifical desk drawer. Thus the bishop talked to the Pope on general subjects—the number of conversions achieved in Palestine, the position of the Catholic religion in the Middle East, and so on. When at last it came time for the bishop to leave, Benedict said to him, “And what of your convent?”

The bishop stammered and managed to say that the building was coming along slowly, but just fine.

“In that case,” said Benedict, “we shall contribute.” He opened up the center drawer, where he usually kept his pin money and after foraging around found nothing, smiled, pulled open a bottom drawer on the side of the desk, and dumped out the contents. “Here,” he said, “take this!” and handed the bishop $6,250.

If Pope Benedict was a flop as a manager of money, his successor, Pius XI, was possibly even more of a flop. The day after Pius XI took office, he presented the sum of $26,000 to the German cardinals to help countrymen who had suffered when the value of the mark declined. A few months later, still having made no accounting of how much money was in the Vatican treasury, Pius handed out $62,500 for a sanatorium at Thorenc, France. In the same year he also contributed $156,250 to help Russia, then opened up his purse once again and presented the poor people of Rome with $9,375. He also gave $50,000 to the victims of the Smyrna fire, $12,500 to the Catholic Institute at Cologne, and $3,125 to the Perretti Institute. The next year, 1923, Pius XI contributed $81,250 for hungry Germans, $21,875 to the Viennese, and $20,000 for Japanese earthquake victims.

Such prodigality had to lead to a day of reckoning. And it came when Monsignor Dominique Mariani, a secretary of the cardinals’ committee for the management of the Holy See’s property, made an inventory and discovered that the Vatican was virtually broke. Given the title Monsignor Elemosiniere Segreto, Mariani instituted some reforms, always with the Pope’s blessing, and every Thursday would sit down with His Holiness and go over the expenses of the past week, down to the tiniest detail. For the first time in Vatican history, a common-sense bookkeeping system was instituted.

Through the efforts of Mariani, the Vatican began to face the problem of its deficits. The first audit in Church history, made in 1928, showed that the Vatican’s expenses in a given day often came to $5,000. Fortunately, they were covered by income. To all intents and purposes, the Vatican was down to its bottom dollar that year, but the audit did turn up a “lost” $55,000, which saved the day.

The 1928 Pontifical Annual made the following brief report on the new measures being taken to reorganize the Vatican’s household economy:

His Holiness Pius XI . . . has reformed the administration of Vatican finances. The entire administration of the Apostolic Palace is placed under the control of a commission of cardinals. The gifts of the faithful brought to Rome by the bishops are a sum kept apart, administered by the personal control of the Pope, paid by a person of confidence who keepsa book in which are marked all receipts and expenses, andwhich is balanced at the end of each week. Expenses figure annually about $1,052,631. The bookkeeping is carried out according to the most modern principles and is severely controlled.

The Vatican was beginning to take control of its financial affairs, but another problem loomed during the late nineteen-twenties to cause the Pope distress. Relations between the papacy and the Mussolini regime had deteriorated to a state of reciprocal distrust and outright hostility. There were so many conflicts between the Red Velvets of Pius and the Black Shirts of Il Duce that a volume would be necessary to detail them all. In one speech Mussolini wryly reminded everyone, “It must be understood that between the Italian State and the Vatican City there is a distance which can be measured in thousands of miles, even if it requires only five minutes to go and see it and ten minutes to walk around its confines.”

Yet Mussolini, who had been called a devil by the Pope, was to do more for the Vatican than any man, any cleric, any pope, in all history. Perhaps Mussolini himself wrote the best footnote on this subject. In an article written for the French newspaper Figaro, he stated, “The history of Western civilization from the time of the Roman Empire to our day shows that every time the state clashes with religion, it is always the state which ends defeated.”

These words were written after 1929, the year in which Italy signed the Lateran Treaty, and helped create for the Vatican the best of all possible worlds.

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