How Pius XII’s Dollars Helped Defeat the Nazis

Bernardino Nogara
Bernardino Nogara (photo: Wikipedia)

According to new research, at the onset of the Second World War the Vatican rapidly moved its securities and gold reserves from areas under threat of Nazi occupation to the United States from where it used its financial means to assist the persecuted Church in Europe and help the Allies combat Nazism.

It was a strategy that was “fundamentally important” to victory over the Nazis, it has been claimed.

The findings, based on the discovery of British intelligence interceptions of Vatican financial transactions dated 1941-1943, are revealed in a December 2012 article entitled “New Perspectives on Pius XII and Vatican Financial Transactions during the Second World War”, written by Patricia M. McGoldrick of London's Middlesex University.

According to a report on the findings published in tomorrow’s L’Osservatore Romano, at the centre of the story is Bernardino Nogara, a member of the board of directors of the Banca Commerciale Italiana and a friend of the Ratti family (to which Pope Pius XI belonged), who in 1929 was appointed the financial advisor to the Holy See. 

Nogara, in consultation with Curia officials, was the protagonist of the Vatican's financial strategy which was “fundamentally important to the Allies' victory over the Nazis and Fascists in World War II,” L’Osservatore Romano says.  “This strategy concerns millions of dollars invested in the largest banks of the US and Great Britain, by which persecuted Churches and exhausted peoples were given aid,” it adds.

The documents, preserved in the British National Archives, concern the activities of the Vatican's main financial institutions: the Special Administration of the Holy See (A.S.S.S.) and  the Institute for Works of Religion (I.O.R.), or Vatican Bank.

L’Osservatore explains that the papers reveal, “beyond the regular communication with dioceses, nunciatures and global Catholic institutions, that there were also extensive money transfers to the major business banks of the USA.” 

In the article, published in the December issue of “The Historical Journal”, a quarterly of the University of Cambridge, McGoldrick explains: “We learn from these accounts that at the onset of the Second World War the Vatican rapidly moved its securities and gold reserves from areas under threat of Nazi occupation to the United States, made the United States the financial hub from which it funded and administered its global church, and had, at any one time, over $10,000,000 invested in the US economy.”

Nagora, said to have had a great capacity for networking and remarkable diplomatic skills, persuaded major American banks such as JP Morgan and the National City Bank of New York to accept the Vatican’s securities. The Vatican also had accounts in Britain with the ASSS sending funds to Morgan Grenfell, the sister of JP Morgan, while the IOR had dealings with Barclays.

These activities, McGoldrick writes, "provide clear evidence” that the Vatican systematically sent its securities for safekeeping to the United States. Furthermore Washington was not only aware of the move, but exempted the Vatican from restrictions to related operations in enemy countries (US Freezing Orders), and even offered greater flexibility to requests from Rome. The securities consisted of donations, bonds, revenues from dioceses and gains from investments.

“Much of this money was intended to support the Churches in difficulty - missions, nunciatures, seminaries and dioceses on all continents,” L’Osservatore explains. “There was also a privileged channel for Europe - to bring relief to the persecuted churches during the Nazi occupation, where Catholic schools, monasteries and churches were closed or confiscated, youth organizations and Catholic publications suppressed, and many priests and religious arrested and interned in concentration camps.”

For them, the IOR maintained a separate account at the Chase National Bank of New York, the findings show.

L’Osservatore adds that the article states that when the British government tried to block one of the accounts, "the Vatican appealed directly to the U.S. government and did so with success."

Moreover, the discovered documents also reveal funding for humanitarian activities in support of the Allies, and people caught up in the war. One example was in April 1944, when Pius XII organized large shipments of flour to the city of Rome, where he had already provided over 100,000 hot meals a day, even attempting to import food from Argentina and Spain through Italy and Greece.

In addition, since 1939, through Nogara and his contacts with Washington, the Vatican had invested heavily in U.S. Treasury Bills, in large manufacturing companies and technology, companies such as Rolls Royce, United Steel Corporation, Dow Chemical, Westinghouse Electric, Union Carbide and General Electric.

McGoldrick goes so far as to speak of "a torrent of Vatican money" used by the U.S. military "that defeated the Nazis and put an end forever to the bestial murders of the Holocaust (p.1045)."

L’Osservatore cautions that it is “too early” to make precise budgetary analyses of the documents, possibly because it is aware of some questions surrounding some of Nogara's investments which may have found their way into fascist hands, though McGoldrick says this was inevitable as Vatican City State had no significant currency of its own and had to depend on lira income to function. “The financial history of the Second World War is a ‘terra incognita’,” L'Osservatore says, that “few have begun to explore [and] much of the material has yet to be discovered and studied.”

But it adds that what we can see already is “enough to make us abandon hasty judgments and ideologized visions in the reconstruction of the facts.”