The Pope’s Banker

Abstract

This chapter deals with the history of the Papal State, its fiscal policies, and the role played by Torlonia in the 1830s when uprisings in the northern provinces (1831) had dire consequences for the State budget. The papal government needed rescue its finances and Alessandro Torlonia, newly head of the family Bank, masterfully seized his great opportunity: he became the Pope's banker. In partnership with James de Rothschild, Torlonia introduced innovative elements to the management of public debt within an administration used to more traditional financial mechanisms. The first Rothschild–Torlonia loan was one of the most controversial operations of the period, both because of the financial conditions imposed and because Rothschild was a Jewish banker. This chapter focuses on the crucial problems within Papal State finances, which also affected papal relationships with the Great Powers in a century that saw the demise of the Pope’s temporal power.