The Mormon Economy in Kirtland, Ohio

THE MORMON ECONOMY IN KIRTLAND, OHIO

By R. Kent Fielding

Kirtland, Ohio, as a gathering place for the Mormons was a choice of lingering expediency rather than of deliberate design, and for that reason its growth during its early years was halting and uncertain. By the time Kirtland entered the consciousness of Joseph Smith, the Mormon Prophet, the church, anxious to build a millennial city of Zion in anticipation of the near advent of Christ, had already been alerted for an uprooting from its inhospitable New York environment and committed sight unseen to some vague location in the West, "on the borders by the Lamanites" which would be designated more precisely when the church made its move. That the New York Mormons came to Kirtland at all was a matter of coincidence and convenience. Parley P. Pratt furnished the first connection when, as a new Campbellite preacher, he left his Ohio home on a missionary tour and became instead a convert to Mormonism. By the time Pratt joined the church, orders for the move to the West had already been given, and Pratt was included in the group chosen to be the advance party sent to "spy out the land." Pratt undoubtedly influenced the group to use the route west that led along the Erie Canal and the lake shore road through the heart of Campbellite territory and to the home of his former colleague and teacher, Sidney Rigdon. His intuitions that the Campbellites would accept Mormonism were correct. The converts gained in northeast Ohio probably more than doubled the size of the new church and, by winning the adherence of Sidney Rigdon, greatly influenced its future course and growth.

It was undoubtedly Sidney Rigdon who persuaded Joseph Smith to move his New York congregation to the more hospitable environment of Kirtland. Rigdon traveled to New York soon after his conversion to meet the Mormon Prophet. Learning of the hostility of New York and of the contemplated removal to the West, he could easily have painted a picture of the friendly reception and opportunities for preaching to unprejudiced multitudes that Ohio would afford. Since Kirtland was on the logical route toward the contemplated homeland, Rigdon's arguments must have seemed alluring and his offer providential. Smith soon ordered his congregation to prepare immediately for removal, this time "to the Ohio" where they would await word from the advance party as to a more precise location for the proposed city of Zion.

Kirtland was not visualized as a homeland for the Mormons, but as a wintering spot, a convenient delay en route leading to the ultimate goal somewhere in Missouri. The Prophet had promised his New York Saints that the Lord would lead them to a land of promise, a land flowing with milk and honey which they should possess as the land of their inheritance. 3 Under his orders they had sold, rented, or abandoned their possessions and moved to do his bidding. It may be that the prospect of claiming for the church the magnificent estate of Leman Copley, a recent Ohio convert who owned more than seven hundred acres of land in the Thompson township, gave the Prophet new ideas suggesting the permanence of the Kirtland location, but the apostasy of Copley, evidently upon learning that he was expected to deed his property to the church, ended the prospect. The New York Saints, who left sometime after their prophet, scarcely paused in Ohio. Less than a month after their arrival and assignment to Copley's farm, they were instructed to "flee to the West," and steps were taken to liquidate the possessions of the Ohio Saints as well in preparation for a general removal.

Like the members from New York, the Ohio Saints had few possessions to delay their departure. They lived principally upon an eighty-acre farm owned by Isaac Morley and evidently had little property of their own. Newell K. Whitney owned a store in partnership with Algernon Gilbert and had purchased a few additional acres of land; Edward Partridge owned a hat business in Painesville. The complete and well-preserved records of Geauga County, Ohio, give no evidence of any further real possessions of significance. Obedient to the call of their prophet, these property owners, following the example of the New York Saints, took steps to' dispose of their holdings and join the move to the West.

When the church left Kirtland for Missouri in June of 1831, there is no indication that they had any intention ever to return again except to complete liquidation of their holdings and to bring their families to Zion. The reason why these plans were not carried out cannot be discussed at length in this article, but it appears that the remoteness of the location, its undeveloped state as well as the unresponsiveness of the Indians and the hostility of the whites, convinced the Prophet that the entire fortune of the church could not be wagered on the possibilities of immediate success in Missouri. Although plans for building Zion were continued, the Prophet returned to Kirtland in the fall of 1831 and issued orders that stopped the liquidation of Kirtland holdings. The Morley farm and some of Newell K. Whitney's property were already gone. Fortunately, Whitney's store had not been sold when the new decision was made. This property was appropriated to the church through the Law of Consecration.

It was around the nucleus of Whitney's store and the Law of Consecration that the economic strength of Kirtland was husbanded. The Law of Consecration was given to the church by Joseph Smith in a series of revelations beginning early in 1831. According to the law, a person upon becoming a member of the Mormon Church was to deed all of his property to the organization in fee simple. He would then receive from the church a conditional grant called an inheritance, which he might operate during his lifetime or during his continuance in the church. If he should leave the church, he would lose his original property as well as his inheritance. Although this was the law, it was not formally followed in Kirtland. Evidently members merely pledged their property to the church with an "oath and covenant" and retained title in their own name." They received the advice and counsel of the Mormon bishop or his agent concerning the use of their property and were expected to make an accounting to him at the end of the year as to the results of their operation. It was expected that all amounts over and above what was necessary to provide for their "wants and needs" would be donated to the church. Evidently the contributions of the members were generous, for the church was able to undertake the construction of a spacious and imposing building, which ultimately cost $40,000, buy additional property both in Kirtland and in Missouri, buy printing presses, make extensive expenditures for support of missionaries, and care for their poor. There is no doubt but that these consecrations and donations were the chief revenue of the church throughout the Kirtland years.

Newell K. Whitney. Around the nucleus of his store and the Law of Consecration the economic strength of Kirtland was husbanded.

The original Whitney store. Today it stands 100 feet in back of its former location is used for storage.

It has been said that the operation of the Law of Consecration was informal in Kirtland. The single exception to that statement is perhaps the most noteworthy economic development during the early years of the church. The properties of Newell K. Whitney were formally appropriated to church use in March, 1832, through an organization called the United Firm or the United Order. The organization was known in the county records as Newell K. Whitney and Company. It was created, according to the church account, to care for the poor, to manage the storehouse, and to regulate affairs of the church both in Zion and in Kirtland. Effectively it was the governing body of the church, and its members included the highest church leaders. It was also the only visible means of support for these leaders. There was an air of secrecy and mystery about it as its members were known by unique Book of Mormon sounding code names. Originally it consited of Newell K. Whitney, Sidney Rigdon, and Joseph Smith. In April, 1832, the United Order was expanded to include Oliver Cowdery and Martin Harris. The only economic asset at first was Whitney's store, but as consecrations and donations flowed in, new business enterprises were commenced and additional purchases of property were made. From time to time, as need arose, the group expanded to include some new figure vital to an emerging plan. Such an addition was made in 1833 when Smith saw that his Missouri Zion was not likely to be realized soon and expressed the need to build and grow by transferring projects originally intended for Zion to the Ohio city. The church needed property upon which to lay the foundations for a city and a house of worship. Accordingly, Frederick G. Williams was admitted to the United Firm and with him came his farm of 142 acres situated on the heights overlooking the valley of the East Chagrin River and the old village of Kirtland. The Williams farm was an excellent beginning, but more was needed for the extensive building program. Land must be had for lumber, for millsites, for brick clay, and for stone. Several non-Mormon landholders were approached, but only one new property was purchased. The farm of Peter French, oldest settler in the township, was desired for its brick clay and its kiln. French had used the kiln successfully to build the first brick house in the area, and the Mormons wanted it to build a brick meetinghouse. French agreed to sell the 103 acres for five thousand dollars. The church could raise only two thousand dollars cash, but Joseph Coe, chairman of the building committee, signed a mortgage for the balance.

The next addition to the United Firm was made in consequence of these arrangements. Frederick G. Williams, with a crew of men, sought to make bricks, but experienced insurmountable difficulties which made it advisable to abandon the project. Although the land was valuable for farming and joined the Williams farm on the north to make available a larger city site, the church evidently felt it could not afford to leave its money invested for such a purpose, and neither could it afford to pay the balance due on the mortgage. At this critical juncture a conference was called to determine what should be done. The decision was to admit John Johnson to the United Firm and have him "seek diligently to take away the encumberances that are upon the house." Johnson was accordingly admitted, paid the mortgage and the farm became the property of the United Firm under the name of Newell K. Whitney and Company. The decision to retain the French farm was a fortunate one, for although the Kirtland leaders evidently thought they were building their meetinghouse on the northeast corner of the Williams farm, property descriptions being what they were, they actually made their beginning on the French farm.

The United Firm acquired some additional property, mostly for purposes connected with the needs of temple building during 1833; but early in 1834 it was decided to terminate the organization. According to the Law of Consecration, all of these properties belonged to the church and the only thing that could properly be done was to assign definite stewardships to each member of the firm. Since this was not done, the fiction of a Law of Consecration becomes evident. For an indicated value received, titles to each of the properties evidendy owned by the firm were made over to the private ownership of the individual partners. Sidney Rigdon received his place of residence and a tannery; Martin Harris was given the right to operate the French farm providing he allowed Joseph Smith to direct the use of the proceeds; John Johnson received his place of residence and the right to subdivide the farm which had been purchased with his money, though for the present the title was retained by Newell K. Whitney and Company; title to the Williams farm passed to Joseph Smith, Jr., and its operation was left to the Smith family; Williams received the property on which he was living and shared the printing establishment with Oliver Cowdery; Newell K. Whitney got his store back and an ashery as well. By 1834, then, the church owned no property in Kirtland. Legally, even the temple, whose walls were now rearing upward, was located on property purchased by Johnson and was owned by the Newell K. Whitney Company.

Other than the holdings enumerated above, there was very little property owned by Mormons in Kirtland township. The county land and tax records reveal the surprising fact that in 1833, with the Mormon population approximately one hundred and fifty persons, only slightly more than four hundred acres of land were owned by church members. More than half of this amount was owned or controlled by Joseph Smith and John Johnson. Even in 1836, with the population totaling approximately three thousand persons, property ownership had advanced to only seventeen hundred acres. The figures indicate a fourfold increase in land against a twentyfold increase in population. Furthermore there had been a tendency in the intervening years for those who had large holdings to divide them so that they could have furnished no more than subsistence plots to their owners. By 1836 there were only thirty parcels of land owned by Mormons in Kirtland township that were larger than twenty-five acres. It is not at all certain that even these were being operated as farms. A thorough search of the records for adjoining townships failed to reveal that there were Mormon holdings in those areas. It is quite evident that the Mormons failed to develop a sufficiently broad land ownership to provide them with an agricultural base for their economy. It is, of course, entirely possible that some of them worked for local farmers, rented land without acquiring title, or that they entered into purchase agreements which were never consumated. But the evidence seems conclusive that the early Mormons did not enter farming as a vocation. In view of their subsequent experience in Far West and Nauvoo as well as on the Iowa plains and in the Salt Lake Valley where their engagement in agriculture was substantial, the Kirtland situation seems anomalous. It may be that they had to learn to farm in order to survive. It seems likely also that many of them lived in Kirtland in a state of anticipated motion, prepared to leave on call and living meantime either on capital liquidated when they joined the church and heeded the summons to gather to Kirtland, or subsisting on credit until their situation should improve. It is evident in any case that many of them were not selfsustaining. The records of the church are filled with testimony that the branches and missions sent their poor to Kirtland and to Zion where they ate up resources that were sorely needed for other purposes.

The Mormon weakness in agriculture was not compensated for by industrial strength. Kirtland's industrial capacity was well developed by 1836, but it was not under control of the Mormons. On at least one occasion, Smith and Cowdery had prayed that certain wealthy owners of land and industry in that area would yield to the gospel, but none of them had done so, and there had not been sufficient money to buy their property. The industrial facilities here, had they been owned by the church, would have furnished an excellent economic base from which to expand as population grew. The sawmills and gristmill, the carding, fulling, and clothing factories owned by the non-Mormons, together with the Mormon owned ashery, tannery, shoeshop, forge, and pottery, would have furnished employment for a number of their own people and supplied many of their basic needs. They could have added such export products as carriages, wheels, cabinets, window sashes, and leather goods, easily produced by their own craftsmen, and built a sound economy. Without some industrial potential they could not hope to support a large population. Duplicating the existing facilities by developing water-power potential was not possible in the Kirtland area. There was some possibility in the use of the more expensive power source of steam, and a beginning on a steam plant was actually made. But developing such a source would likely be as expensive as buying the existing operations, and production costs would be considerably higher than with water power.

The chief economic activity in Kirtland from 1833 to 1836 appears to have been temple building. Working on the temple furnished jobs for Mormon mechanics and craftsmen; supplying materials for temple construction employed additional men in stone quarrying and lumbering. Money to meet the costs of these activities came partly from donated labor and partly from church expenditure. It seems likely that the entire economy in these years depended largely upon the church as a source of revenue. Persons employed on the temple or by its suppliers by their purchases furnished income for other craftsmen, laborers, and merchants. Unfortunately, this economy came to an end with the completion of the temple in 1836, and no substitute for it was projected by the church. In the absence of a sound agriculture and industry, this termination was disastrous.

A further weakness in the Mormon economy was to be found in the unusual proliferation of merchants which occurred in 1836. The firm of Newell K. Whitney and Company had originally supplied the needs of the church; but with the launching of the temple project, a temple committee consisting of Hyrum Smith, Jared Carter, and Reynolds Cahoon had set up a store especially to take care of the needs of the temple and of its builders. Others had followed. On the temple lot itself was located Whitmer, Rich and Company; while just south of the church buildings stood the long established store of Joseph Smith, the Prophet. John Boynton, Lyman Johnson, and Jonathan Hale had gone into business, as had Jacob Bump, Orson Hyde, and Edmund Bosley as well as Parley Pratt and John Goodson. Orson Hyde, looking to the needs of the future, had purchased two lots near the Whitney store in Kirtland Flats, and his wife, Marinda Johnson, soon chose a location midway up the hill to the temple. Besides these, there were a number of informal business arrangements affecting the leaders of the church in a variety of groupings. Now it was Rigdon, Smith, and Cowdery that signed a note for merchandise; now Smith, Whitney, and Rigdon; others were signed by Cahoon, Johnson, Smith, and Cowdery; by Smith, Whitney, and Rigdon; by Cahoon, Johnson, Hyde, and Whitney; or by Smith, Dayton, and Slitor, as opportunity arose.

The position of the Mormon merchant was, under existing arrangements, particularly vulnerable. Goods were, of necessity, purchased on credit. They were, also of necessity, sold on credit. An insecure economy had developed which kept the merchants in constant fear of failure for insufficient funds to meet their obligations when due. If there should be a lapse in flow of money, such as was threatened by the limitation of church expenditures upon completion of the temple, they would inevitably be caught between creditor notes due and debtor bills unpaid. The arrangement thus far, however, had evidently been a profitable one even though precarious, for the merchant class was expanding, paying high prices for their building locations, and being accommodated by generous suppliers of credit. Through the summer and fall of 1836, as church expenditures slackened and sources of income declined and disappeared, these merchants resupplied their diminishing stocks by new loans and continued their policies of liberal credit allowances to the members of the church.

If the church leaders saw the condition of their economy, there is no evidence that they moved effectively toward appropriate solutions. The situation seemed to call for continued church spending for a time to keep the economy alive. A movement at the same time to arrange a selective migration so as to build up the agricultural and industrial potential would seem to have been essential. Unfortunately the genius which Brigham Young exhibited years later in the setdement of Utah was not yet in evidence; perhaps it took the early failures to promote that genius. In any event, the leaders took steps which reflect either their lack of comprehension of the problems they faced or their lack of ability to control their members to achieve the desired ends.

What the leaders did do was to urge a gathering of the Saints and apply the full pressure of the church to accomplish it. They apparently believed that an increase of numbers would solve the existing problems and create additional economic opportunity. In a series of decisions, they arranged their credit problems, bought more lands and prepared them not for agriculture but for subdivision into housing lots, and committed their resources in a type of industrial development — all of which had their rationale in the supposed virtues of the "gathering." They organized a bank, bought lands for housing, and began the construction of a steam sawmill with the evident purpose of converting lands into a city and providing jobs for craftsmen and laborers in building homes for the incoming Saints. Unfortunately this kind of economic activity merely created a city without providing a reason for its existence and dried up sources of capital by encouraging spending for lots and homes. It simply provided for an exchange of goods and services within the Mormon economy without establishing a basic productivity that would provide a surplus which could be exchanged for necessary imports from sources outside the church. Furthermore, it posed the double threat of an inundation of the poor such as had bled the Missouri city of Zion of her strength and led in part to her downfall in 1833 and the equally destructive unleashing of a spirit of speculation which would prevent legitimate economic activity.

The plan worked poorly from the beginning. Forewarned by the failure of Zion, church leaders sought to control migration more closely, but they used the same techniques that had failed before. Persons were ordered to send their monies ahead and were requested to stay where they were unless recommended by a competent church authority. But the impulse to gather was, once more, strongly felt by the poor and scarcely heeded by the independent. Kirtland was soon overrun with indigents. Furthermore, the impact of the migration upon Kirtland was heightened by developments in Missouri. Through 1835 and early 1836, there had been much talk of returning to Zion in Jackson County, Missouri, and the tentative date of September, 1836, had been set and was anticipated with much hope by some of Kirtland's leaders. Instead, the Missouri Mormons were again evicted, this time peacefully, by their temporary hosts in Clay County. The Mormons moved northward, but W. W. Phelps wrote that the lands in that part of Missouri were most certainly those spoken of in the Book, of Mormon as the "land of desolation." The possibility of going to Wisconsin was discussed, but there was little enthusiasm for it. The Saints gathered to Kirtland in large numbers, some of them to buy a house lot and settle there permanently, others to bide their time until more favorable circumstances should suggest a removal farther west, but few of them, apparently, with resources or interests appropriate to the solution of Kirtland's problems.

In the meantime, as summer passed into fall and early winter, church expenditures on the temple ceased and no new employment projects were launched. The incoming Saints made plans to build houses and stores, and productive activity turned in the direction of supplying their needs, but they had little cash to match their demands and made their orders in anticipation of finding sources of income. The stocks of the merchants dwindled, and there was no cash to requisition new supplies. Accordingly, they signed notes payable in three months, six months, or a year, and businessmen in Painesville, Cleveland, New York, as well as local men of means, trusted the reputation for honesty which had been earned by the precarious but honest dealings of the Mormon community. The stock of credit goods, unless paid for in cash when due, threatened the reputation of the church in general and the solvency of certain church leaders in particular. It was necessary that something be done and very soon.

As the Mormon leaders became aware of the urgency of their economic situation, they moved to remedy it. They needed money immediately and in large quantities. The first effort to secure it was one of sheer romantic hopefulness. Late in July, in company with Rigdon, Cowdery, and his brother Hyrum, the Piophet went to Massachusetts in anticipation of finding a treasure said to have been buried beneath an old house in Salem. No treasure was found, and the seekers returned to Kirtland in September with only the comfort of Smith's assurance that the Lord would give them power to pay their debts. Just slightly more than a month later a new plan, equally the child of desperation, had been devised. The complex problems of debts, credit, capital needs, employment, housing, land expansion, subdivision, and building up a Stake of Zion, all found their answer in a master project which, in November, assumed tangible form in the organization of the Kirtland Safety Society Bank Company.

Banks are usually organized to afford profitable returns for otherwise idle capital. The Mormon bank was organized in an effort to make capital out of idle land dirough the process of housing subdivision. Smith had already experienced the relation between land and capital when he and Oliver Cowdery had signed a note in July, 1836, payable in September with Missouri lands, and had received for it, $621.32. The method suggested itself to the Kirtland situation. With land as a capital base, a bank could issue notes in the form of loans to individual land purchasers and secure the loan with a mortgage on the land. The mortgage could then be used as an asset on which to issue more notes, or it could be discounted for specie or sound notes at another bank. Notes could also be issued on deposits received. Smith could not have been unaware that by such devices the original capital could be expanded several times over. The Bank of Canton, Ohio, before it failed, circulated twenty-three dollars in notes for every dollar of specie in its vaults. Even the conservative Bank of Geauga at Painesville, with a paid-in capital of just $67,000, had accumulated deposits and evidences of debt to justify a circulation of $196,000. The Bank of Geauga survived the depression of 1837. This was the age of "wildcat banking," and the Mormon enterprise compares well with some of the more extravagant enterprises. Some had started with only pledges for capital; some evidently with even less. A contemporary Michigan bank that failed was discovered to have no assets and $38,000 worth of liabilities; another had only seven coppers when it ceased operations; while a third had only a table for assets. Getting a bank started would offer no difficulty for the Mormon leaders since notes issued would have unlimited circulation among the church members due to their confidence in their leaders. Establishing the currency outside of the community would be their greatest problem. If they were successful at it, Mormon merchants might convert their foreign debts into debts at the bank, giving their own people the benefit of the interest; mortgages could be converted into specie at other banks, and goods received for forwarding could be sold for valid bank notes; specie outside the Mormon area and all the gold and silver in Mormondom could be requisitioned in exchange for bank notes or received as savings deposits. Specie was critically short throughout the West and paper was freely circulated. If a reputation for honesty could be established, it was not likely that excessive demands for specie payment would be made.

If plans had been carefully laid and modestly carried out there was room for hope that some kind of Mormon financial institution might succeed. The Mormons had a choice between establishing a regularly chartered bank or a joint stock association with limited monetary privileges. The latter type of institution might issue promissory notes of short duration and in limited number, but it depended wholly upon the reputation of its organizers for its success as its notes were not collectable by state authority. Among the Mormons themselves, and those with whom they habitually did business, their credit was good and their notes would have had full currency. Such an organization would have afforded a new form of credit where such arrangements were already in effect and would not have risked everything on general public acceptance of their notes. But apparently the need of money was too urgent and the envisioned project too vast to admit of such modest beginnings.

The decision was made to engage in banking as a regular institution with full power to issue notes and receive deposits. Such privileges were regulated by charter rights granted by the state legislature. When the Mormon bank was planned, Orson Hyde was sent to Columbus for a charter, and at the same time Oliver Cowdery was directed to Philadelphia to secure plates and printed bank notes. Cowdery shortly returned with the plates and notes, but Hyde did not get the charter. "Because we were Mormons," Smith said, "the legislature raised some frivolous excuse on which they refused to grant us those banking privileges they so freely granted to others."

The reason the Mormons did not get their charter is by no means as simple as Smith indicated. As a matter of fact, the legislature did not refuse the charter; there is no evidence to sustain the idea that it was even asked to grant one. No bills to establish a Mormon bank were ever considered by the legislature. It is conceivable, as Smith suggests, that religious prejudice was a factor in the failure to receive a charter. It may have operated to prevent the introduction of a petition for a charter, but it is not likely; prejudice seems more like a ready excuse than a valid reason. The county delegates to the legislature were Senator Ralph Granger, of Fairport, and Representatives Seabury Ford, of Burton, and Timothy Rockwell, of Painesville. All were natives of Connecticut with residence in Ohio varying from ten to thirty years, and likely had some knowledge of Mormonism. Their attitude toward their Kirtland neighbors is unknown, but they were all prominent men and well-regarded. Ford later became governor of the state, Granger served as president of Willoughby College, and Rockwell was a director of the proposed railroad from Wellesville to Fairport. Political prejudice is another possible inference for refusal to ask for a charter. All of the delegates were Whigs, whereas the Mormons were Democrats. However, the legislature itself had a democrat majority in each house. It seems most likely that Hyde was persuaded of the uselessness of submitting a petition in view of the control of the legislature by the anti-bank democrats. In any case, no new banking privileges were granted to any petitioners by the state legislature in its 1836-37 session.

Even if the legislature had been willing to grant charters to any of the seventeen applicants or to the Mormons, it is unlikely that they could have acted in time to help the Mormon situation. Their sessions commenced on the fifth day of December, and ended the following April third. Under the best of circumstances it is not likely that a charter could have been obtained before late March when most bills were passed. The Mormons could not wait.

When news came that no charter was to be had, the Mormon situation became desperate. The old problems remained, and the expenses already undertaken in anticipation of forming a bank offered new ones. Quick action seemed necessary, and a decision was made to' put an end to the projected Kirtland Safety Society Bank Company and to form, in its place, a joint stock association for the management of the common concerns of the stockholders. The new company was obviously designed in an effort to meet the terms of the law granting limited money privileges to business organizations. A new name was necessary for the new institution, and a solution was devised to salvage the investment in the plates and printed notes and at the same time clearly indicate that banking was not its object. Thus was formed the Kirtland Safety Society Anti-Banking Company. Some of the notes for the old organization were inked over on the local press with a prefix and a suffix to the word bank, and they were ready to commence operations.

As it was projected, there was never the slightest chance that the Kirtland Safety Society Anti-Banking Company could succeed. Even though the Mormon economy was in jeopardy, it could scarcely have suffered such a devastating blow as that which they were themselves preparing to administer to it. There were many good reasons why banking — or antibanking — was not the solution to their problems early in the year 1837. Proper notice of any one of them should have directed their efforts in more hopeful directions.

The Safety Society proposed no modest project befitting its relative worth and ability to pay. Its organizers launched, instead, a gigantic company capitalized at four million dollars, when the entire capitalization of all the banks in the state of Ohio was only nine and one-third million. Such presumption could not have escaped the notice of bankers who would realize that such an amount of money could not be paid in, and would have been led to examine its capital structure more closely. They would have noted, upon examination, that according to the articles of incorporation capital stock was to be paid in by subscription but that the amount of the first subscription was not stated, and further payments were left to the discretion of the company managers. Furthermore, total issuance of notes was not prescribed, nor was the relation of notes to capital and assets. The members, to be sure, pledged themselves to redeem the notes and bound themselves individually by their agreement under the penal sum of one hundred thousand dollars. But there was no transfer of property deeds, no power of attorney, no legal pains and penalties. To a banker, the articles fairly shouted: "This is a wildcat, beware!"

A further error was in the issuance of bills of small denominations. Although there was a general circulation of ones and threes throughout the state, there was widespread dissatisfaction with them since they were, in many cases, counterfeit or issued by companies or institutions with insecure financial structures. There had been pressure exerted by both federal and state authority to discontinue the issuance of such bills; and the Ohio Legislature, in March, 1836, had passed a law laying a tax of 20 per cent on the dividends of all banks which would not give up the right, by July 4, 1836, to issue bills less than three dollars in value. By July, 1837, there were to be no bills issued for less than five dollars in value. This provided another ground for suspicion, for the Mormon issue was heavy in small bills.

Even under the most advantageous conditions, the year 1837 was no proper time to start a bank. Even a cursory reading of the newspapers of the time indicated the fact that the country was far extended on credit and that there was a desperate shortage of specie — conditions portentous of depression. The vigor with which the public domain was being taken up and the rapidity of the westward movement led to many misgivings. Payments for land were frequently made in depreciated, and often worthless, paper currency; and the opinion arose that unless the country were returned to a specie basis, honest folk would be defrauded by speculators, and the West would be enthralled to the money lenders of the East. The opinion was evidently based on political rather than on economic considerations; but, ostensibly to check speculation in lands, to stop the flow of depreciated notes into the national treasury, and to remove the menace of economic bondage, the Specie Circular was issued in July, 1836, by President Jackson. It required that after August 5, following, nothing except gold and silver might be accepted by land agents for purchases of the public domain. The circular failed to end speculation in lands, but it did cast more doubt upon the worth of paper currency and increase the pressure for the short supply of specie. With nothing but confidence in the future to sustain the paper issues, it was inevitable that these pressures would soon undermine that confidence and precipitate a panic. For an organization without liquid capital to anticipate success under such circumstances was to hope for a great stretch in the laws of probability.

Although any one of these errors could have wrecked the bank, they were all minor in comparison with the fatal one — the vain hope that public opinion could be favorably disposed to a Mormon bank. The church leaders were at least conscious of the need of cultivating public opinion and printed an extra edition of their paper for that particular purpose. But opinion was not persuaded. The repercussions were loud and violent. The first reaction came from Cleveland. The Weekly Advertiser published an account of the forthcoming bank on December 29, and commented favorably on it. The following week, the extra was received together with the information that the bank had been changed into an "anti-bank." The Advertiser was still favorable, but the Weekly Gazette reacted indignantly at what it considered to be a base fraud, "a kind of radicalism that would flourish better in Michigan than Ohio," and cynically commented that the bills probably rested on a spiritual basis, for there were no responsible individuals whose honesty or honor was pledged for their redemption. The Advertiser charged the Gazette with religious prejudice and cited the Articles of Association and especially the redemption pledge as evidence of good faith. The Gazette, thereupon, also analyzed the articles, calling attention to their weaknesses and asserting that they guaranteed nothing at all. They noted that its president was Sidney Rigdon, "a notorious hypocrite and knave," and as for the pledge of honor, they added, did not these same people pledge their word to the existence of gold plates? A Gazette reader wrote the editor that politics prompted the attitude of the Advertiser and the Cleveland Herald as well. Their support of the Mormon money in defiance of law, he said, was an effort to break the bank monopoly by resort to mobocracy.

In Painesville, the reaction was equally spirited and divided. The antagonistic Telegraph regarded the bank as an out-and-out fraud and suggestively warned the organizers that the statute prohibiting unauthorized banking was still in force and that a reward of one thousand dollars awaited any person who should apprehend violators. The Republican was sympathetic. It felt that restrictions on banking created unwarranted special privileges which a democracy ought not tolerate. It regarded the Mormon institution as an effort to break the monopoly and applauded it, but, at the same time, it advised its founders to make their effort a clear-cut issue by openly publishing their intent and by demonstrating their ability to redeem their notes when presented.

Southeast of Kirtland, at Ravena, the editor of the Ohio Star, long opposed to the Mormons, emptied his quill of venom. "Rags, Mere Rags!" began his column. "The Mormons of Kirtland not content with exclusively monopolizing the Golden Bible, and the mortal remains of some old Patriarchs, are making themselves friends of the mammon of unrighteousness." He doubted seriously that there was any specie behind the circulation and denied the rumor that the banks in Painesville and Cleveland received or paid out the bills.

Meantime, the great experiment had been launched. From its place of business in the old Peter French brick home, at the crossroads near Johnson's tavern and Whitney's store in Kirtland Flats, the issuance of Kirtland Safety Society Anti-Banking Company notes commenced on January 6. Smith advised his church members to bring their silver and gold (not their bank notes) and take stock in the company; but with a commendable caution, he wisely went to Painesville the day prior to the opening of business, where he and Rigdon signed a note for three thousand dollars from the Bank of Geauga, payable in forty-five days. The bank was obviously begun on a shoestring, and a borrowed one at that, but no one knew how thin and worn the string was until it was revealed that even the plates from which the notes had been printed had been purchased on credit.

In view of what has been presented heretofore, it could not be expected that the Mormon bank would succeed, but evidently, for a time, it was welcomed and accepted. Among the Mormons and those like them not disposed to ask for specie, the bills circulated at par and were a tremendous help to Kirtland's sagging economy. There was an especial briskness in partaking of the stocks of the merchandise houses, and for several months land transfers were facilitated with unaccustomed dispatch. For a time, even suspicious persons who presented their bills for payment were accommodated. Even when specie was exhausted, certain persons accumulated Kirtland notes and exchanged them in the Mormon community for land, so that there was an air of prosperity that deceived many into thinking that the bank was on the verge of establishing its credit and, thus, the credit of the church. When specie was no longer to be had, Kirtland bills became objects of speculation and were received and paid out at widely varying discount rates.

Details concerning the operation of the bank are unknown. No records have been preserved, and all of the principle parties to it either say nothing or are very general in their accounts. The critical problem, obviously, was to obtain sufficient specie or acceptable bank notes to meet the demand for payments. As creditors brought their bills for redemption, and persuasion failed to keep them in circulation, the little available specie was paid out. The articles of the association required that the organizers make the notes good either by paying in subscriptions for capital stock or "under the penal sum of one hundred thousand dollars"; but there is no evidence to indicate that the directors called for subscriptions or invoked the penalty. What they did do is not set forth with any conclusive authority. Smith, together with Cowdery and Rigdon, went to Michigan "on bank business," but what they did is unknown. It is further said that they resorted to subterfuge in order to keep up public confidence by obtaining "one or two hundred boxes" each of which was marked "one thousand dollars" but which were actually filled with sand and shot. According to the report a few of them were open for the inspection of the doubters and were layered with gold and silver coins. This same type of story appears indescriptions of other wildcat banks and is of doubtful validity. A report later made by onetime Mormon, Cyrus Smalling, says that Smith sent out leaders of the church with quantities of Kirtland notes with a charge to exchange them for specie or valid notes at any available rateand that he allowed them to keep 50 per cent of the proceeds as their commission. Whether these steps were taken is open to' question.

Whatever measures desperation may have called for were unavailing, and after a lingering hopeless effort extending past midsummer the bank plunged with the entire Mormon economy into a sea of insolvency.

The life the bank may have had among the non-Mormons in the community, died first. The signal for its demise was given when Samuel D. Rounds entered suit in February, 1837, for himself and for the state of Ohio, under the 1816 statute for illegal banking. In separate suits, he sought convictions against Sidney Rigdon, Warren Parrish, and Newell K. Whitney on the same charge. Unless that case could be won there was not a chance for survival of the bank. When Smith's demurrer to the declaration of the plaintiff was overruled by the court in June, even though the case was continued for jury trial, he must have known that die bank was finished. Smith does not mention the trial in his journal, but likely it loomed large in his estimate of the total situation. Sometime previous to July, possibly as early as May, he withdrew from the society, affirming that it was founded upon righteous principles, but that an age of "darkness, speculation and wickedness" would not allow it to continue operations. Even the faithful Saints refused to accept Kirtland notes at par after July, 1837. So far in ruin was the Kirtland bank as early as May that it wasunable to benefit by the general suspension of specie payments which came at that time throughout the nation.

The causes for the failure of the Mormon bank are sufficiendy apparent in the errors incident to its founding, and were freely admitted in the official paper of the church at the time. Later, however, neither the Mormons nor their enemies were content to see the rise and fall of the bank in terms of these facts. There is little to support the claims of the opponents of the church that there was deception and fraud in the bank from beginning to end. On the other hand, the tendency of the church to find excuses for failure which do not reflect quite so strongly upon the judgment of its leaders lacks substantial factual foundation. It is alleged that the fall of the bank was caused by the poor business conditions and the nation-wide bank failures of 1837. It is evident from a study of the situation that although the causes are similar, they are not identical. And it seems most probable that, if there had been no panic of 1837, the Mormon bank, launched and operated as it was, could not have endured for long. The failure to produce sufficient goods to support themselves and the tendency to use up their energies in speculations were as true of the Mormons as of any of their contemporaries. The Saints were not the victims of the folly of others, but of their own folly. A further excuse for failure was evolved in the general bitterness and apostasy which followed in the wake of economic disaster. The story was told that Warren Parrish, leader of the apostate faction, had stolen twenty-five thousand dollars of the bank's money, and that he had been guilty of private speculations and mismanagement. These notions were widely repeated and generally accepted among the faithful Saints as the reason for the bank's failure. It is most likely that the story is not true. No official record exists which charges Parrish with culpability, and he lived for several years, following the incident, as a religious leader in Kirtland. Still later, he became a minister in the Baptist church. As an officer of the bank, he may have retained possession of money printed by the society after it had declined in value. If Cyrus Smalling's story is true, Parrish may have been a commission agent for the bank and by that means have come into legitimate possession of large numbers of bank notes. It is known that Brigham Young, who had no official position in the bank, had large quantities of Kirtland notes, and that they were the official currency among the Saints soon after their arrival in Salt Lake Valley. Yet he is not accused of fraud or theft.

There has been a natural, although regrettable, tendency among the Mormons to try by any device to clear Joseph Smith of blame for the failure of the bank; but he cannot logically be freed from all responsibility. The decision to establish a bank and later an antibank had been partly his. The bank had failed during the period in which he was one of its chief directing officials. He did not protest, so far as preserved accounts record, nor withdraw, until the ruin of the bank became a part of the general national ruin and identified with it.

Even though his own revelations pronounce him as without competence in temporal matters, Smith learned much from his experience. In Far West, Missouri, where the next Mormon city was commenced, he forbade debt for church building and prevented the formation of a church agency for building a new temple. In Nauvoo, he became an economic czar regulating land sales and industrial development. The Mormon church today has an unusual aversion to debt which may in part stem from the experiences of the Kirtland period.

The failure of the bank, although it destroyed their economy, did not immediately end the Mormon hope of retaining their city in Kirtland. Throughout 1837 a desperate and at times heroic effort was made to salvage their affairs from the ruin of bankruptcy. Outlying members were urged to contribute to the rescue of Kirtland. In September a drive involving more than one hundred elders, fully supported by church officials and under the personal leadership of Bishop Newell K. Whitney, set forth on the errand of rescue. These efforts were unavailing. The burden of debt was too heavy, and one Mormon firm after another found itself in county court for failure to pay overdue notes. The sheriff was a regular visitor in Kirtland seizing land and personal property and selling it for debts. All the accumulating evidence of failure undermined church confidence in Joseph Smith, and the organizations of the church proved inadequate to cope with what might more properly be called rebellion than apostasy. In September Joseph Smith and Sidney Rigdon went west again, the first time since their trip with the army to rescue Zion in 1834. While there they were caught up once more in the optimism of the West — the cheap land, the vigor of elemental labor, and the lack of such complications as attended eastern life. Smith's published intention to return to Kirtland only long enough to arrange his affairs before moving west for a new start was the signal for the end of Kirtland as a Mormon center. New dissent broke out which flared into uncontained rebellion against the Prophet's leadership. In January, 1838, hard after the departure of his chief lieutenant, Brigham Young, and two days ahead of the process serving sheriff, Joseph Smith left Kirtland never to return. His affairs were left in the capable hands of William Marks. Many others simply abandoned their property, defaulted their debts, and fled in midwinter leaving behind a snarl of property questions, unsettled court claims, their homes and beloved temple. Joseph was the heart of Zion. Without him and devoid of faithful Saints, Kirtland fast deteriorated into obscurity from which it never recovered.

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