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Topics surrounding the Kirtland Bank created by Joseph Smith.
The Kirtland Bank was created in the State of Ohio by Joseph Smith and Sidney Rigdon. Joseph was the Cashier and Sidney was the President. Unable to obtain a Banking Charter, Joseph and Sidney created an "Anti-Bank" Bank. Depositors were lured in because Joseph Smith told his followers that as a Prophet of God, the Bank would never fail.
Joseph Smith's delusions left them empty-handed and the bank declared bankruptcy. Many faithful Mormons lost their life savings and investments - and their faith. Joseph Smith and Sidney Rigdon fled Kirtland under the cover of darkness in January of 1838 to escape bank depositors who were given worthless bank notes in exchange for gold and silver deposits.
The bank was a complete scam from the beginning.
| || Pictures Of Bills From The Failed Kirtland Anti-Banking Society |
Saturday, Jan 1, 2005, at 09:23 AM
Original Author(s): Infymus
Topic: KIRTLAND BANK -Link To MC Article-
| ↑ |
| While it is common knowledge that Joseph Smith founded the Church of Jesus Christ of Latter-day Saints, few know of his attempt to found a bank in Kirtland, Ohio. This important event in Mormon history was reportedly done because of a revelation that Joseph Smith received. The following excerpt is from Mormonism - Shadow or Reality? page 531:
Warren Parrish, who had been an officer in the bank and had apostatized from the Church, made this statement: "I have listened to him [i.e. Smith] with feelings of no ordinary kind, when he declared that the AUDIBLE VOICE OF GOD, INSTRUCTED HIM TO ESTABLISH A BANKING-ANTI BANKING INSTITUTION, who like Aaron's rod SHALL SWALLOW UP ALL OTHER BANKS (the Bank of Monroe excepted,) and grow and flourish and spread from the rivers to the ends of the earth, and survive when all others should be laid in ruins." (Painesville Republican, February 22, 1838, as quoted in Conflict at Kirtland, page 297)
A brief account of the failed bank is told in Mormon Enigma:
Wilford Woodruff, who remained true to the Church and became the fourth President, confirmed the fact that Joseph Smith claimed to have a revelation concerning the bank. Under the date of January 6, 1837, he recorded the following in his journal: "I also herd [sic] President Joseph Smith, jr., declare in the presence of F. Williams, D. Whitmer, S. Smith, W. Parrish, and others in the Deposit office that HE HAD RECEIVED THAT MORNING THE WORD OF THE LORD UPON THE SUBJECT OF THE KIRTLAND SAFETY SOCIETY. He was alone in a room by himself and he had not only [heard] the voice of the Spirit upon the Subject but even an AUDIBLE VOICE. He did not tell us at that time what the Lord said upon the subject but remarked that if we would give heed to the commandments the Lord had given this morning all would be well." ("Wilford Woodruff's Journal," January 6, 1837, as quoted in Conflict at Kirtland, page 296)
"Construction of the temple had temporarily boosted the economy of Kirtland, but after the dedication the economy declined as poor converts arrived in ever increasing numbers. The old settlers attempted to keep them out of Kirtland by economic pressures, but the Mormon population increased twentyfold while the landholdings only quadrupled. In November 1836 Joseph and other church leaders drew up articles for a bank to provide capital for investments. It was a desperate gamble. Oliver Cowdery went to Philadelphia for plates to print bank notes, and Orson Hyde went to the legislature in Columbus with a petition for a bank license. It was refused. Oliver returned with plates for the Kirtland Safety Society Bank, but Orson Hyde came back without a charter. The plates were so expensive that they printed some specie anyway, writing in "Anti" before the word "Bank" and "ing" after it. The notes read, "Kirtland Safety Society Anti-Banking Company," and the paper passed as legal tender from a joint-stock company. At first the money circulated wildly. When merchants and businessmen who were more sophisticated than the Mormons began to redeem their notes, Joseph could see that a run would ruin the bank. After one month he and Sidney Rigdon resigned as officers but the bank failed. This affected Joseph's status.
Fawn Brodie details this about the demise of the Kirtland Safety Society Anti-Banking Company:
People who were convinced that Joseph had intended a swindle at the outset attacked him verbally and threatened him physically. This disruption forced Joseph to leave the city frequently....
In April 1837 Joseph went into hiding without seeing Emma before he left. (Mormon Enigma, pp. 62)
"If the bank needed a final blow to shatter what little prestige it still held among the faithful, it received it when Warren Parrish resigned as cashier, left the church, and began openly to describe the banking methods of the prophet. Parrish was later accused of absconding with $25,000, but if he took the sum it must have been in WORTHLESS BANK NOTES, since that amount of specie in the vaults would have saved the bank, at least during Joseph's term as cashier." (No Man Knows My History, page 198)
Was Joseph Smith to blame for the failure of the bank or "anti-bank" as it was called? Robert Kent Fielding stated the following:
"The toppling of the Kirtland bank loosed a hornets' nest. Creditors swarmed in upon Joseph armed with threats and warrants. He was terribly in debt. There is no way of knowing exactly how much he and his leading elders had borrowed, since the loyal Mormons left no itemized account of their own claims. But the local non-Mormon creditors whom he could not repay brought a series of suits against the prophet which the Geauga county court duly recorded. These records tell a story of trouble that would have demolished the prestige and broken the spirit of a lesser man.
"Thirteen suits were brought against him between June 1837 and April 1839, to collect sums totaling nearly $25,000. The damages asked amounted to almost $35,000. He was arrested seven times in four months, and his followers managed heroically to raise the $38,428 required for bail. Of the thirteen suits only six were settled out of court-about $12,000 out of the $25,000. In the other seven the creditors either were awarded damages or won them by default.
"Joseph had many additional debts that never resulted in court action. Some years later he compiled a list of still outstanding Kirtland loans, which amounted to more than $33,000. If one adds to these the two great loans of $30,000 and $60,000 borrowed in New York and Buffalo in 1836, it would seem that the Mormon leaders owed to non-Mormon individuals and firms well over $150,000." (No Man Knows My History, pp. 199-202)
"It was natural that blame for the entire situation should be charged against the Prophet. They had gathered to Kirtland at his command; the idea of purchasing housing lots in the great subdivision scheme had his full support; he had inferred that the bank would not only succeed, but would one day be the most powerful institution of its kind....the Church populace was genuinely disillusioned when the bank failed. It was difficult for them to comprehend that a man who claimed to have divine revelation in religious matters could fail so miserably in economic affairs.... No amount of shifting of blame could obscure the fact that a prophet had failed in a grand project.... As the Sheriff appeared ever more regularly with summons and as the fortunes and anticipations of one after another of the leaders faced the humiliating prospect of publicly acknowledged incompetence and bankruptcy, the discipline and sense of responsibility, which are the heart of all organizations, broke completely and plunged Mormondom into ecclesiastical anarchy." ("The Growth of the Mormon Church in Kirtland, Ohio," typed copy, pp. 233, 234, 237 and 238, as it appears in Mormonism - Shadow or Reality? pp. 533)
In a thesis written at Brigham Young University, Gary Dean Guthrie stated:
"The State legislature refused the Kirtland Safety Society its charter upon which the name of the bank was changed to Kirtland Anti-Banking Society....Joseph and Sidney Rigdon were tried in court for violating the law, were found guilty and fined $1,000. They appealed on the grounds that the institution was an association and not a bank; the plea was never ruled upon as the bank suspended payments and closed its doors. Other lawsuits followed....
For more information on the Kirtland Bank see the UTLM book The Mormon Kingdom, Vol. 1 pp. 11-20.
"During the summer of 1837, Joseph spent much of his time away from Kirtland to avoid these lawsuits.... Apostles Luke S. Johnson, Lyman E. Johnson, and John F. Boynton were rejected and disfellowshipped.. "The blame of the bank failure fell heavily on Joseph. He had issued a formal invitation to his followers to take stock in the venture and the institution had been organized outside the law. Heber C. Kimball later was to comment that at this moment, 'there were not twenty persons on earth that would declare that Joseph Smith was a prophet of God.' Six of the apostles came out in open rebellion....Joseph first established the bank by revelation and then had to later admit that because of poor management and other internal and external conditions the project was a failure." ("Joseph Smith As An Administrator," M.A. thesis, Brigham Young University, May 1969, pp. 80, 81, 82, 85, 86 and 88, as it appears in Mormonism - Shadow or Reality? pp. 533)
| Most Mormons know a little about the Kirtland bank but of course, church-published material spins the issue to make Joseph Smith come out looking completely innocent of any wrongdoing. What the church doesn't tell you is that:
- When Smith and friends applied for a state bank charter, they were turned down. Smith had already had bank note printing plates made which read "Kirtland Safety Society." After their charter was rejected, Smith ordered the notes to be issued anyway, but they were stamped to read "Kirtland Safety Society Anti-Banking Co.", so as to skirt the lack of bank charter.
- After the bank and the Kirtland community failed, several former bank executives (all Mormons) testified that Smith and Rigdon had placed a chest filled with junk in their bank's vault, with a thin layer of silver coins on top, to serve as the bank's "capital."
- Half of the original twelve apostles, and more than half of the total church membership, left the church because of the Kirtland failure.
- In the midst of the troubles, Smith sought to escape them by going on a five-week "mission trip" to Canada. Upon his return, he found that half of his church members had "rallied around a young girl who claimed to be a seeress by virtue of a black stone in which she could read the future. David Whitmer, Martin Harris, and Oliver Cowdery, whose faith in seer stones had not diminished when Joseph stopped using them, pledged her their loyalty, and F.G. Williams, Joseph's First Counselor, became her scribe." (No Man Knows My History, p. 205.) (This tells us a lot about the mental states of the "witnesses" to the alleged golden plates.)
- Upon being charged with bank fraud, Smith and Rigdon were forced to flee Kirtland on horseback at night to escape mobs who wanted to avenge their financial losses.
| William Law was Joseph Smith's counselor in the First Presidency of the Church during the Nauvoo era. He was for a time a trusted intimate of the prophet. Law described Joseph in a way not generally reported to believers:
"One of Joe Smith's weakest points was his jealousy of other men. He could not bear to hear other men spoken of. If there was any praise it must be of him; all adoration and worship must be for him. He would destroy his best friend rather than see him become popular in the eyes of the church or the people at large. His vanity knew no bounds. He was unscrupulous; no man's life was safe if he was disposed to hate him. He sat the laws of God and men at defiance."
One of Joseph's ambitions was to resolve the heavy debt incurred by the church by establishing the Kirtland Safety Society Bank on January 1, 1837. However, due to being denied this privilege by the Ohio legislature, he established the Kirtland Safety Society Anti-Banking Company the following day. The bank was said to have been established through revelation from God, and it was rumored that Joseph predicted that like Aaron's rod, the bank would swallow up all other banks "and grow and flourish, and spread from the rivers to the ends of the earth, and survive when all others should be laid in ruins." (According to Warren Parrish, who succeeded Joseph as cashier of the bank, in a letter dated March 6, 1838 in Zion's Watchman. This letter was certified to be a statement of fact by Luke Johnson and John F. Boynton (former apostles) and Sylvester Smith and Leonard Rich (former seventies).)
The Messenger and Advocate published an appeal for investors which said:
"…we invite the brethren from abroad, to call on us, and take stock in our Safety Society; and we would remind them also of the sayings of Isaiah…'Surely the isles shall wait for me, and the ships of Tarshish first, to bring thy sons from far, their silver and their gold (not their bank notes) with them, unto the name of the Lord thy God.'" (The parenthetical expression is part of the original text, reprinted in History of the Church, Vol. 2, p. 473)
According to several individuals that left the church, the bank was established on fraudulent claims of capital security. They related that the bank vault was lined with many boxes, each marked $1,000. These boxes were actually filled with "sand, lead, old iron, stone, and combustibles," but each had a top layer of bright fifty-cent silver coins. Anyone suspicious of the bank's stability was permitted to lift and count the boxes. According to C. G. Webb:
"The effect of those boxes was like magic. They created general confidence in the solidity of the bank and that beautiful paper money went like hot cakes. For about a month it was the best money in the country." (Interview by W. Wyl. See Mormon Portraits, p. 36; also Oliver Olney: Absurdities of Mormonism Portrayed, p. 4; the letter of Cyrus Smalling in E. G. Lee, The Mormons, or Knavery Exposed, p. 14; and Fawn Brodie, No Man Knows My History, pp. 194-8).
William Parrish, secretary for Joseph and cashier of the bank for a short time, wrote in 1838:
"I have been astonished to hear him declare that we had $60,000 in specie in our vaults and $600,000 at our command, when we had not to exceed $6,000 and could not command any more; also that we had but about ten thousand dollars of our bills in circulation when he, as cashier of that institution, knew that there was at least $150,000." (Letter to Zion's Watchman, published March 24, 1838. Cyrus Smalling also wrote that Joseph had collected only $6,000 in specie. See E. G. Lee, The Mormons, or Knavery Exposed, p. 14)
It should be noted that Parrish left the church following this fiasco and began openly to describe Joseph's banking methods. He was later accused of absconding with $25,000, probably in bank notes which ultimately proved worthless.
On January 27, less than a month after the bank's opening, the Painesville Telegraph reported that Joseph had "shut up shop…saying he would not redeem another dollar except with land." Everyone with Kirtland anti-bank bills now realized their quandary and tried desperately to get rid of them. By February 1 the bills were selling for 12 ½ cents on the dollar. (According to Cyrus Smalling. See E. G. Lee, The Mormons, or Knavery Exposed, p. 14. Also William Harris: Mormonism Portrayed (Warsaw, Illinois, 1841), p. 30)
From the beginning, the bank had been operated illegally and Joseph was eventually ordered by the courts to pay the standard $1,000 penalty as well as court costs (see Chardon, Ohio, courthouse, Vol. U, p. 362). Needless to say, the dissolution of the bank and the catastrophic effects it held for those that trusted Joseph's word resulted in widespread disillusionment with the prophet. Under accusations of fraud, Joseph threatened to excommunicate any Saint who brought suit against a brother in the church. As Heber Kimball put it, during this time "there were not twenty persons on earth that would declare that Joseph Smith was a prophet of God." (Sermon delivered September 28, 1856. Journal of Discourses, Vol. 4, p. 105)
To be fair, many other banks failed during the "panic of 1837" and Saints who were ready to apostatize decided that Joseph's speculation looked more like an indiscretion than grand larceny. As related by Christopher Cary:
"It was marvelous to see with what tenacity they held to their faith in the prophet, when they knew they had been robbed, abused and insulted." (Pioneer and Personal Reminiscences, p. 45)
However, given the dishonest claims that appear to have been made regarding the bank's capital, the seemingly prophetic promises of prosperity in return for investment, and the fact that Joseph authorized and perpetuated the illegal operation of the bank in the first place, I personally consider this a poor reflection on Joseph's character and his ability to act under inspiration from God.
| || It's Not Just What Ol' Joe Was Convicted For - What Else Was He Never Convicted For? |
Wednesday, Jan 28, 2009, at 07:39 AM
Original Author(s): Mootman
Topic: KIRTLAND BANK -Link To MC Article-
| ↑ |
| "Smith knew a good thing when he saw it, and in 1836, the best thing by far was land speculation. With the westward drive, land values were shooting up at such a frenzied rate that fortunes could be made virtually overnight. By the mid-thirties Smith had already spent every dollar he had buying up land around the Mormon community in Kirtland, hoping that a railroad would run a line somewhere across his property and make him a rich man. When he ran out of his own money, he started looking for other people's money to use. The best way to attract money, of course, was to open a bank, and in 1836, coincidentally, the Lord commanded him to do just that.
"There was just one problem: you had to HAVE money to open a bank. Never a stickler for details, Smith went out and borrowed the money to open the Kirtland Safety Society Bank and have plates made up for printing the currency the bank would issue. To assure depositors that their money would be secure, he filled several strong boxes with sand, lead, old iron, and stones, then covered them with a single layer of bright fifty-cent silver coins. Prospective customers were brought into the vault and shown the heaping chests of silver. 'The effect of those boxes was like magic,' claimed one witness. 'They created general confidence in the solidity of the bank, and that beautiful paper money went like hot cakes. For about a month it was the best money in the country.'
"Smith wasn't fazed a bit when the state legislature refused to grant his bank a charter. With only a few additions to the printing plates (why waste money to have new ones made up?), the Kirtland Safety Society Bank became the Kirtland Safety Society Anti-Banking Co. As far as Smith was concerned, a company, unlike a bank, didn't need a charter.
"The faithful, of course, didn't care what it was called. It was enough for them that the bank was run by Joseph Smith. What safer place could they put their money than in the hands of the Prophet? Lest they miss the message, Smith wrote an article for the Mormon newspaper inviting his flock to 'take stock in our safety society.... We would remind them also of the sayings of the prophet Isaiah,...which are as follows: 'Surely the isles shall wait for me, and the ships of Tarshish...to bring...their silver and their gold (not their bank notes) with them, unto the name of the Lord they God...' Smith added the parenthetical to the biblical text as a discreet reminder that his bank wanted deposits in hard coin, not in notes drawn on other banks.
"After only a few months of operation, the Anti-Banking Co. collapsed. The single layer of silver coins didn't last long once the notes started coming in. Meanwhile, the Ohio state legislature, unamused by Smith's semantic games, charged him with operating an unchartered bank and fined him $1,000. To collect, however, they had to get in line with the other investors who were suing Smith (thirteen suits were filed against him between June 1837 and April 1837). On the night of January 12, 1838, Smith, like many other speculators, declared bankruptcy with his feet, fleeing Kirtland and his followers under cover of darkness. In his imaginative account of the event, Smith later claimed he left Kirtland 'to escape mob violence, which was about to burst upon us under the color of legal process to cover the hellish designs of our enemies.'
"To prevent his creditors from hounding him to his new home in Nauvoo, Illinois, Smith declared legal bankruptcy, but not before transferring many of his assets to his wives, children, friends, and associates--some 105 people in all. (In 1844, the year of Smith's death, these transfers were declared fraudulent and illegal.)"
(The Mormon Murders: A True Story of Greed, Forgery, Deceit, and Death, Steven Naifeh and Gregory White Smith, 1988, pp. 25-26, Chapter 6)
AND WHAT DO THE LATEST 'OFFICIAL' MORMON AUTHORITIES HAVE TO SAY ABOUT ALL THIS????
"Conflict also increased at church headquarters in Kirtland. In seeking to establish a sacral society directed by prophetic leadership, JS crossed conventional boundaries between religious and secular affairs. For him, God's commandments made no distinction between the spiritual and the temporal. Subjecting oneself to a religious leader's direction in temporal matters clashed with American ideals of unfettered individual freedom. As the Mormon population of Kirtland continued to grow, JS and his associates conceived expansive plans for that community. A pivotal element was a bank, which could help provide capital for development. Though they were unable to obtain a state charter--an ultimately fatal flaw--they nevertheless established a financial institution in January 1837. The 'Kirtland Safety Society' faltered early, due in part to negative publicity, the refusal of many area banks to accept Safety Society notes, and the predatory actions of outsiders who systematically acquired it notes and quickly demanded payment in specie, thus depleting its reserves. The Safety Society suspended such payments in late January, then failed several months later during the recession that gripped the United States. Stresses related to the bank failure, mounting personal debt of Kirtland Mormons, and church indebtedness due to construction of the House of the Lord caused some to question the scope and legitimacy of JS's prophetic leadership. Some of JS's closest associates became disaffected. Prominent among the defections were JS's former secretary Warren Parrish, several apostles, a number of the members of the Quorom of the Seventy, and the Three Witnesses to the Book of Mormon plates. Their discontent escalated from dismay with JS's financial leadership to rejection of his religious leadership.
"Such views eventually spread to nearly one-third of the church's general leadership...Declaring JS a fallen prophet, Parrish and others attempted to establish a church of their own and to take control of the House of the Lord. Oliver Cowdery, saddled with crushing personal financial losses, privately disparaged JS. Some dissidents sought to replace JS with David Whitmer as church president. Frederick G. Williams clashed with JS over the Safety Society. Compounding JS's problem was the antipathy of numerous non-Mormon residents of Kirtland and vicinity, many of whom used both the legal system and threats of violence to harass him and the Latter-day Saints."
(The Joseph Smith Papers, Church Historian's Press, p. 227)
Anybody smell a little obfuscation?
And a little cult tactics of "maintaining a sense of outside persecution"? (See "Children and Cults: A Practical Guide", Journal of Family Law, Volume 29, Number 3, 1990-91)
| || Meanwhile, Over At The Madhouse, Denial C. Peterson Is Claiming Victory |
Monday, Aug 17, 2009, at 07:47 AM
Original Author(s): Sl Cabbie
Topic: KIRTLAND BANK -Link To MC Article-
| ↑ |
| I topped another thread, this time on a historical issue that was also "addressed" at the recent FAIR Conference. This bit of historical revisionism involved events leading up to Joseph Smith and Sidney Rigdon fleeing Kirtland ahead of a mob outraged at the financial ruin Smith's operations had brought down around them . . .
Here's the thread, where "poster" asks for rebuttals about claims that the "Kirtland Anti-Banking Society" wasn't in violation of Ohio laws at the time . . .
Who can offer the best rebuttal to this apologist spin
Over at MAandD, Peterson (who elsewhere once wondered, apparently in all sincerity, whatever it he was in denial about--uh Danny, that's why they call it that) posted this thread . . .
I do not know enough about this issue,but please offer your thoughts on this latest spin?
I just wanted to call everybody's attention to the transcript that has been posted at FAIR of McKay White's excellent presentation on the Kirtland Bank (aka the Kirtland Safety Society), which has often been used by critics to attempt to paint Joseph Smith as corrupt . . .
I addressed the issues on JS's corruption on the other thread (and others are welcome to add to it; that particular era of history isn't a strong suit of mine or even one I find particularly interesting), but Peterson's shoddy scholarship is evident; a more accurate title would've been the "Kirtland Anti-Bank."
Of course if he did that, people might start asking questions, and he wouldn't be a willing participant in the shell game that author White presents here (Bullchip warning, likely squishy ones):
Best I translate Peterson's "Reformed Nibleyese" on that "critics . . . attempt to paint Joseph Smith as corrupt" howler: a more accurate statement would be "objective historians use to detail Joseph Smith's actions and manipulations."
Readers are free to draw their own conclusions about JS's integrity after reading how the Kirtland strong boxes were filled with lead and stones and covered with a layer of silver half dollar coins to create the impression of far greater assets than the operation actually possessed . . .
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