Background In the aftermath of the
Napoleonic Wars, there was a return to the politics of throne and altar in
Europe. Around this time, the Rothschild family of Jewish bankers from
Frankfurt had arisen to a position of prominence as bankers. Scions of this family established themselves in several European power centers, including in Catholic countries, such as in
Vienna in the
Austrian Empire of
Klemens von Metternich (for whom the
Age of Metternich is named), and in
Naples ruled by the
Bourbon-Two Sicilies monarchy. One of the states to which sovereignty was restored by the
Congress of Vienna was the
Papal States, temporal domain of the
Holy See. However, in the years following restoration, the finances of the
Holy See declined. negotiated the specific terms of the loan deal with Alessandro Torlonia. In 1831, Cardinal Bartolomeo Cappellari was elected
Pope Gregory XVI. The Rothschilds were considered reliable in
conservative circles in Europe, because they had worked with the Austrian government to stabilize finances after the
Napoleonic Wars. They also shored up the Bourbons in the
Kingdom of the Two Sicilies, which bordered the
Papal States, by helping finance their suppression of two attempted revolutions. Initially, there was some resistance during the negotiations, particularly from the Roman government and Monsignor Antonio Garibaldi at
Paris. However,
Alessandro Torlonia (acting for the Holy See) held direct negotiations with
James Mayer de Rothschild and thrashed out an agreement, signed on 30 November 1831. Thus in 1832 the Rothschilds’ agreement to provide a loan to the Holy See for £400,000 (equivalent to £ million in ) came into force.
James Mayer de Rothschild, head of the French
Banque Rothschild, became the official Papal banker.
Cardinal Tosti attempted to convert the debt with six Parisian banks who were rivals to the Rothschilds. Pope Gregory XVI appointed Cardinal
Antonio Tosti as the new Papal Treasurer (also known as the
Apostolic Camera) at Rome in July 1834. Considering stock market conditions and a recent Rothschild offer to Egypt to refinance its debt, Tosti attempted to refinance the debt in more favorable terms; Rothschild opposed such an early refinance, fearing losses to his own bank and disrepute to Vatican bond issuances. As part of a plan to gain better conditions, Tosti reached out to a number of banking firms in
Paris active on the
Paris Bourse, who stood in a position of competition with the Rothschilds, due to their self-interested business opposition to a Rothschild
monopoly of the financial sector. the six rival banks were themselves mostly Protestant or Swiss, but also some Jewish. They included; Banque J. Hagerman, Banque André & Cottier, Banque
Fould-
Oppenheim & Cie, Banque J. A. Blanc, Colin et Compagnie, Banque Gabriel Odier & Compagnie and Banque Wells & Compagnie. The leading element among these interests who were rivals to the Rothschilds on the
Paris Bourse, Jonas-Philip Hagerman, a Swedish Lutheran who previously had a bank at
Genoa, had already achieved a similar feat of helping attain for the
Kingdom of Sardinia a French government loan, which gifted the deal to the six banks, side-stepping the Rothschilds. All of this had been done in a discreet manner, without the Rothschilds being informed. But when agents of the
Rothschild banking family of Naples had learned that an agent of the "six banks" of Paris, had been in Rome, their suspicions were heightened. After learning about the situation, Carl Mayer von Rothschild set out to Rome to find out the truth about the matter from Cardinal Tosti. While there he produced a copy of the original 5% contract, signed by Rothschild and Torlonia (before Tosti had been involved with Papal finance) which contained an until now secret condition; The six Parisian firms at first considered trying to offer such conditions that, if the Rothschilds tried to match it then it would damage their own interests; however, in the end, the two sides reconciled and went in on the new loan terms together.
Catholic–Jewish relations worked closely with the Rothschilds and liaised with
Pope Gregory XVI on issues such as the
Ancona Jews on their behalf. Whether the loan had any significant effect on the relationship between
Catholicism and Judaism is debated. Despite his approval of the loan across religious lines, Pope Gregory XVI was opposed to what he called religious indifferentism and upheld Catholic orthodoxy in such matters in encyclicals such as
Mirari vos. Through Austrian Chancellor
Klemens von Metternich working as an intermediary, the Rothschilds asked the Pope for a number of concessions towards Jews living in the Papal dominions, such as the
Ancona Jews. ==See also==