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Lateran Financial Convention (1929): text

The pope's 58-year boycott of Italy achieved its aim when Mussolini gave the Vatican not only a country and a concordat, but also the huge payment promised here. This has been used to fund a secret property empire.

The pope rejected the financial offer made by the free republic in the 1871 Law of Guarantees [1] and only accepted the much more favourable Financial Convention offered by Mussolini 58 years later.

The pope claimed to be “the prisoner of the Vatican”  ― essentially a boycotting Italy until a dictator finally gave it what it wanted. As Msgr. Pedro Lopez-Gallo points out, this strategy paid off handsomely:

The financial settlement was immensely greater than the one previously proposed by the Law of Guarantees, which wanted to grant an annual sum of 3,224,000 lire. With the new agreement, Italy had to compensate the Holy See for the loss of its states by paying 750 million lire in cash and 1 billion lire in 5% negotiable government bonds. [2]

Until the Lateran Pacts, the papacy was largely funded by “Peter's Pence” collected from the faithful, but after this pay-off from Mussolini it received much of its income from the new investments it was able to make in world markets and commercial enterprises. “The papacy was now financially secure. It would never be poor again.” [3] Since then the Vatican has built up a secret commercial property empire. Mussolini's millions have been used to create an international portfolio disguised behind a labyrinth of offshore companies with hidden ties to the Vatican. [4]

The Financial Convention
annexed to the [Lateran] Treaty

[11 February 1929]

The Holy See and Italy having, in consequence of the stipulations of the Treaty which has definitely composed “the Roman Question”, held it necessary to regulate with a distinct convention, forming an integral part of the same, their financial relations;

The supreme Pontiff considering on the one hand the immense damage sustained by the Apostolic See through the loss of the patrimony of S. Peter constituted by the ancient Pontifical States, and of the Ecclesiastical property, and on the other side, the ever-increasing needs of the Church in the City of Rome alone, and taking into consideration the present financial condition of the State and the economic condition of the Italian people, especially after the war, has deemed it well to restrict the request for indemnity to the barest necessity; asking for a sum partly in cash and partly in bonds which is much inferior in value to the which the State to-day should disperse towards the Holy See if only in execution of the obligation assumed by the law of May 13, 1871.

The Italian State appreciating the paternal sentiments of the Supreme Pontiff has felt bound to adhere to the request for the payment of the said sum.

Article 1.   Italy, on the exchange of ratifications of the Treaty, shall pay to the Holy See the sum of Italian lire 750,000,000 (seven hundred and fifty millions) and a the same time consign Italian 5 per cent bonds (with coupons, June 30) of the nominal value of Italian lire 1,000,000.

Article 2.   The Holy See declares that it accepts the above as a definite systemization of the financial relations with Italy in consequence of the events of 1870.

Article 3.   All the acts necessary for the execution of the Treaty with regard to the present Convention and of the Concordat shall be exempt from every form of taxation.

Rome, eleventh February, one thousand nine hundred and twenty-nine.

Pietro Card. Gasparri
Benito Mussolini

Benedict Williamson, The Treaty of the Lateran,
with a forward by his eminence [Francis] Cardinal Bourne, Archbishop of Westminster,
Burns Oates & Washbourne Ltd., London, 1929, pages 42-66.


1. George B. McClellan, Modern Italy: A Short History, Princeton, 1933, pp. 133-34.

The so-called ‘Law of Guarantees’ was forced through parliament by Lanza, March 21, 1871, and strove to realise Cavour's theory of ‘a free church in a free state’. It gave the pope the immunity of a sovereign in his person, the right to maintain the Swiss and Noble Guards, full freedom for the exercises of his religious ministry, with freedom of speech for the clergy and freedom of the press, and the right to send and receive diplomatic representatives. Bishops were not any longer required to swear allegiance to the king, nor be nominated by the government. The pope was given the palaces of the Vatican, Lateran, and Castel Gandolfo, with quasi-rights of extraterritoriality, and the government agreed to pay him 3,225,000 lire annually.

On the other hand civil marriage had already been made compulsory, the clergy had been subjected to the civil law, and religions other than the Roman Catholic had been permitted to enter Italy. On May 15 [1871] Pius refused to accept the law and called upon all Roman Catholic states to join in a restoration of [his] temporal power.

2. Msgr. Pedro Lopez-Gallo, “The Popes had a long wait for the Lateran Pact”, The B.C. Catholic, 10 July 2006.

3. John F. Pollard, Money and the Rise of the Modern Papacy: Financing the Vatican 1850-1950, 2005, p.148. Google reprint

4. “How the Vatican built a secret property empire using Mussolini's millions”, The Guardian, 21 January 2013.



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