For most North Americans religion plays some value in their lives, often times spiritual in nature. It is good and unless you are a trustee of the church, you may not pay too much attention to the organization of the religion. For countless of followers that is great, the message of kindness and love is the most important aspect and if you try to live your life within those guidelines the more power to you. For others you may wonder about riches and the church. The organization is different than the local parish church.

In Europe prior to King Henry VIII, (Henry wanted a divorce because in a monarchy the most important aspect of ruling is to produce an heir to continue ruling. His wife had daughters and Henry wanted a boy. The religion did not allow divorce, so he changed religions to almost exactly what existed except it allowed divorce Anglicans); Europe was Catholic. The Catholic religion was formed in what is now Israel, but gravitated to Rome where St. Peter’s Church is located. The Roman Empire was pagan until an Emperor of Rome – Constantine converted to Christianity. Once he converted, he changed the religion of the Roman Empire and then formed a council to set out the rules. The first Pope’s similar to other Emperor’s of the world thought they were next to god and needed to live lives in palaces. Popes and Bishops had to have great palaces.

From an organizational aspect, lifestyle costs money. At first the church received money from the followers and some from the government. The direct government money fell off, however indirect government support never changed for church lands were not taxed. In most communities in the US, when cities were being established land was given to the religions to establish churches. How does the church earn more money. Similar to other institutions, it is wonderful if leaders have great amounts of money. Early on in the church existence, the center of gravity moved from Rome to Paris as the Kings of France were the wealthy and the prime benefactors of the church. When Spain rose to power because of the gold from Mexico and Peru, the benefactors were Spanish. Eventually the power shifted to back to Rome and the Papal States – prior to Italy becoming an unified country, the Catholic church was the administration of a third of Italy. However, the funds never were great for the ambition of the church.

In the book God’s Bankers – A History of Money and Power at the Vatican by Gerald Posner published by Simon & Schuster, NY, 2015 the reality of church finances are examined. What should a Pope do? If you are human, at some point or another you will sin. The Pope decided some of these sins come be forgiven if you gave an indulgence or gave extra money to the church. At the time of the Crusades, the Pope said if a Christian went on the Crusades they would be forgiven for all their sins. Over time, some of the sins became any sin as long as you paid money to the church you would be forgiven again and again. The increasing number of sins helped split the church to Protestants and Catholics. One of the issues from an administration aspect was the money the church received became less.

Eventually one of the offsets was the rise of the economic power of the US and the Catholics who sent money to Rome. By the 1900’s the US was second in giving after Italy. The country of Italy was 98% Catholic and Rome administration the Papal States. It was not until 1929, that the Vatican and the country signed the Lateran Accords which gave Vatican City to the church as an independent country as well as 750 billion lire in cash and 1 billion lire in government bonds that paid 5%. (in 2014 dollars the settlement was worth $1.3 billion). The Italian government also put 25,000 parish priests on their payroll.

Linking to dividend paying stocks, we all have impressions have institutions just because they have been around for a long time. Are they rich and powerful? what is the cash flow? will they continue for a long time? The reality with the administration of the Catholic Church, is despite the lands, the church was cash flow poor for much of its existence. When you invest your money, try to buy companies that are profitable and have the ability to increase their dividends because they are cash flow positive.

There are more questions than answers, till the next time – to raising questions.