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LDS Perspectives Podcast

LDS Perspectives Podcast

Episode 59: Religious and Financial Crisis in Kirtland with Elizabeth Kuehn

(Released October 18, 2017)

This is not a verbatim transcript.

Some grammar and wording has been modified for clarity.

Russell Stevenson: This is Russell Stevenson, and today we have Elizabeth Kuehn from the

LDS Church History Library here with us in the studio to talk about the

Kirtland Safety Society. Thanks for joining us, Elizabeth.

Elizabeth Kuehn: Thanks for having me.

Russell Stevenson: Elizabeth has a master’s degree in European History from Purdue

University and is currently a PhD candidate at the University of

California, Irvine studying American History.

You’ve done some extensive archival research on the Kirtland Safety

Society over the course of the past few years. I'm curious to know, what is

the latest and most compelling research that’s being done on this subject?

Elizabeth Kuehn: Unfortunately, we don’t have that many extant documents relating to the

Safety Society. One of the key records is a stock ledger that’s in the

possession of the Chicago History Museum. We recently got high-

resolution images of this. In working with those high-res images, we can

kind of make conclusions and extrapolate a lot more data than previous

studies have been able to. We’ll be able to resolve some of the

assumptions that were made based on the use of microfilm and based on

not referencing the primary documents at all.

One of the things that I’ve worked particularly on is essentially tabulating

the income and the accounting — kind of on a larger scale — for what the

stock ledger tells us about when the society is getting species, when

people are paying for their stock, and when they stop paying for it.

There are some early BYU Studies articles in the 70s that approach this

literature, but I hope that we’ve gone a little bit further in [Joseph Smith

Papers] Documents [Volume] 5.

Russell Stevenson: Elizabeth, one of the major questions that Latter-day Saints have about the

Kirtland Safety Society is ultimately, what is it? That’s a term that we

don’t tend to use in 21st century financial parlance, so it can confuse a lot

Episode 59: Religious and Financial Panic in Kirtland with Elizabeth Kuehn

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of people. Why don’t we start with a pretty basic level definition of what it

was?

Elizabeth Kuehn: Absolutely. Fundamentally, the Kirtland Safety Society is a bank. It’s

established as a bank in November of 1836. They write a banking

constitution to create this bank. Then come January, they’re facing some

problems, and they decide to restructure it. It’s at that point that we

introduce the somewhat cumbersome name of Kirtland Safety Society

Anti-Banking Company.

Russell Stevenson: Now when you say “they,” you’re referring to Joseph Smith, Sidney

Rigdon, and who else?

Elizabeth Kuehn: Yes. Joseph Smith and Sidney Rigdon are elected the officers, but we

know that there were around 100 stock holders from mostly the Kirtland

area — mostly members of the church that have paid, or at least

subscribed, to purchase stock in this bank.

Russell Stevenson: Any of these kinds of developments — like building institutions, churches,

or banks — tend to take place in a particular time and a particular context.

Talk to us a little bit about the nature of these kinds of financial

institutions during the early 19th century.

Elizabeth Kuehn: Kirtland — and the bank that they hoped to establish there — is very

much in the vein of kind of frontier community banking. This is a key

feature of 19th century banking. You have the more established banking

houses in New York and New Orleans that are doing kind of transatlantic

levels of trade. On the other hand, you have these very, very small

community banks. Some of these will grow larger with eastern investment,

but you have a sizable number that are just very small, very local, and very

unique to a particular rough, frontier, cash-strapped, western edge of the

United States.

Russell Stevenson: How were some of these local institutions seen by major banking houses?

Elizabeth Kuehn: The major banking houses didn’t interact much with these kind of smaller

level ones except if they were interested in purchasing them and creating a

branch or sister bank in Michigan, Ohio, or somewhere where they can

establish further trade relations.

Russell Stevenson: Were there any kinds of conflict or competition between some of these

local banks and the major banks?

Elizabeth Kuehn: Absolutely. The Commercial Bank of Lake Erie, which is the most sizable

bank in northeastern Ohio and the closest really well-established bank for

the Saints in Kirtland, goes through what Eric Schreiber calls a “deliberate

warfare” between these smaller banks, where they’re essentially trying to

gather the notes of these banks at a discounted rate — so at less than par


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— and then redeem them at par and take specie away from their

competition, essentially.

Russell Stevenson: Now you’re mentioning notes; you’re mentioning specie. According to the

US Constitution, only the United States Congress has the right and

authority to print specie, so what was the role of these notes within the

local Kirtland economy?

Elizabeth Kuehn: These notes are kind of a stop-gap measure for a lack of currency. Andrew

Jackson had decided to veto or suspend the charter for the Second Bank of

the United States and with this decision essentially eliminated a printed

federal currency. So you see smaller-scale banks fill this void. It’s not

technically federal currency, but it’s circulating in the place of currency.

Russell Stevenson: Okay, so it’s serving as currency even if it is not in fact currency? People

treat it as currency; they respect it as currency; but legally, it’s not.

Elizabeth Kuehn: Right. There’s a further distinction for the notes of the Kirtland Safety

Society because it’s an unincorporated or unauthorized bank. It doesn’t

have the backing of the state legislature to essentially authorize banking

privileges.

Russell Stevenson: Now as I understand it, sometimes there were some sweetheart deals

between some of these major banking houses and, say, governments.

Would you tell us more about that?

Elizabeth Kuehn: Yeah. We know that there’s a lot of corruption, bribery, and, as you said,

sweetheart deals going on between banks and governments. Andrew

Jackson himself engages in this. As he removes the charter, and thus the

Second Bank of the United States, we get something that historians often

refer to as “pet banks,” where he’s selecting individual banks throughout

the country to deposit federal funds in.

Russell Stevenson: The banks even themselves sometimes end up providing revenue for the

functioning of the state government.

Elizabeth Kuehn: Absolutely. Quite a number of banks — particularly these western frontier

states — have state banks or banks that hold the state’s revenue.

Russell Stevenson: You said that the Kirtland Safety Society was unincorporated and not

authorized by the state legislature. What kinds of problems did that present

for the Kirtland Safety Society?

Elizabeth Kuehn: It’s a problem of legitimacy, because there’s this question of “How are

they funded? Are they one of these wildcat banks that will take your

money and run or are they more legitimate?”


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Ohio in particular had done a lot of chartering of banks in the early 1830s.

By the time we get to the mid-1830s, the state legislature is less inclined to

give even more charters out. They’re actually trying to figure out how to

deal with these bank notes that are circulating and often unregulated, so

there’s this kind of scaling back.

In the legislative session that the Kirtland Safety Society tries to petition

for a charter, no banks are allowed a charter. While we do get a sense that

there is some degree of religious prejudice when they come before the

legislature — and they are having a very difficult time finding a politician

to represent them — there is this sense that the state of Ohio has just

eliminated the desire to charter for a while.

Russell Stevenson: Trying to kind of step into that time and place, say you’re Joseph Smith

and you’re trying to set up this Kirtland Safety Society, and the

environment is so hostile. What do you think was going through his head?

What kinds of precedence was he maybe drawing upon?

Elizabeth Kuehn: There’s this common precedent — and we don’t know whether or not

Joseph Smith was aware of it, but he probably knew something about it —

that in Ohio in particular, you get a form of quasi-banking. This is where

institutions like insurance companies, canal companies, or another kind of

institution that has to be chartered before the legislature will tack on a

clause that says, “And we’d like banking privileges.” Often they’re

chartered. The banking aspect may or may not be part of that initial

charter; they might tack it on later, but in this quasi-banking sense, they’re

able to function as a bank even though they aren’t actually solely a bank.

When Joseph forms the Kirtland Safety Society, it’s possible that he’s

going in that direction. It’s also possible that he’s drawing on the example

of earlier banks. There’s one in Mt. Vernon, Ohio, that’s called the Owl

Creek Bank. In 1816 — which is a little bit earlier and in a slightly

different economic context — the Owl Creek Bank is denied a charter by

the legislature. The citizens of Mt. Vernon decide to come together and

say, “Well, we won’t approve of this kind of denial of our charter. We

have this right, and we’re going to move forward with this bank as a

bank.” In the end, they prove their legitimacy and are able to be chartered

several years later. It’s possible that Joseph had something like that in

mind.

Russell Stevenson: You’ve talked about these different possibilities that Joseph Smith was

considering. Now when Joseph Smith established the Kirtland Safety

Society, did he imagine it as a bank or more as something else — maybe

like a joint stock company or a different kind of institution?

Elizabeth Kuehn: The initial idea is definitely a bank. Everything in 1836 points to

establishing a bank. The constitution that they write and ratify in


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November says “bank.” This idea of a joint stock company kind of comes

in with this question of their January 1837 restructuring. We don’t know

exactly what they intended with this restructuring. They call it a “banking

company.”

In Ohio, a banking company was essentially synonymous with “bank.” It’s

possible that even there, they’re just trying to find a work-around to create

an unauthorized bank. That’s kind of what they seem to be doing. In all of

their legal records after this point, they still tend to use the term “bank.” In

all the reminiscent accounts from individuals in Kirtland call it the “bank”

as well.

Russell Stevenson: Sounds like it’s sort of in this gray area where no one really knows what it

is.

Elizabeth Kuehn: Absolutely. It’s very much in this extralegal area. I think Joseph and the

other Saints were aware that it was very rarely enforced and that this

wasn’t something that the state really had a hand in regulating, so even if

they were kind of functioning outside the limits of what the legislature had

approved, there was very little chance of them being brought up on

charges.

Now of course, they are brought up on charges because of one of our

favorite anti-Mormons of northeastern Ohio, Grandison Newell, who is

really this intense antagonist for the Saints.

Russell Stevenson: I would imagine as Joseph Smith is making these kinds of decisions that

he at least has some sense of how the institution may be vulnerable to

some of these kinds of charges. Do we have any evidence of that?

Elizabeth Kuehn: We have very limited evidence. There is a really interesting thirdhand

account in records that are taken from witness statements at a trial in the

summer of 1837. This is a trial where Grandison Newell had accused

Joseph Smith of trying to assassinate him, so there’s the broad array of

witnesses that are brought in.

Orson Hyde in his testimony says that he, Joseph, and several other men

were in the bank, and in this instance they were talking about the statutes

and the legal parameters in Ohio. Hyde says that Joseph said essentially

that he was aware of this statute, and he didn’t think anyone would bring

charges against them except for Grandison Newell. Of course, pertaining

to the criminal charge, Hyde says that Joseph then alludes that someone

should “take care of him” — so that’s kind of used to, maybe in terms of

the witness statement for the criminal trial, suggest that Joseph Smith

wanted someone to “take care of” Grandison Newell.

Now throughout the trial, the judge throws it out and says that there’s no

grounds for this, so Joseph is let off without any charges — but there are


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these interesting moments where you see this bank as a gathering point for

the community as well as Joseph being aware of the limitations of the

bank.

Russell Stevenson: Now the following year, Hyde ends up going through his own kind of

apostasy. He begins making statements regarding Joseph Smith’s

intentions and the Latter-day Saints in Missouri. Is there any possibility

that we’re seeing a predecessor to that apostasy at this time in 1837?

Elizabeth Kuehn: Possibly. Hyde also walks in on the setting apart blessing for Heber C.

Kimball and the mission to England. In the manuscript history of the

church, he tells — or at least it’s written from his perspective — that his

heart was softened. There seems to be some kind of antagonism, some

kind of tension between Hyde and Joseph during this summer — as there

are with several other members of the Twelve.

Russell Stevenson: Certainly. So who exactly was behind the lawsuit regarding Joseph

Smith’s Kirtland Safety Society? Was it Grandison Newell or was it

somebody else?

Elizabeth Kuehn: Grandison Newell doesn’t actually bring the charge. He has a man named

Samuel Rounds who, essentially, it appears brings the charge for Newell.

We don’t have any concrete documentation that Newell is behind Rounds

bringing the charge, but everything later on suggests that Newell had

coerced or maybe bribed Rounds into bringing this charge.

One of the reasons why Newell may not be the one bringing this charge

himself is because he would be liable under the same statute for

prosecution because he had dealt in the notes.

Russell Stevenson: What ultimately became of this lawsuit?

Elizabeth Kuehn: The charges are initially brought against Joseph Smith, Sidney Rigdon,

Newell K. Whitney, Warren Parrish, Frederick G. Williams, and Horace

Kingsbury. Kingsbury, Williams, and Whitney had all acted as pro

tempore officers in the earliest moments of the bank and in the first week

of its operation in January — and they’re essentially let off the hook.

Parrish himself is also not brought on trial for various reasons. One of

those reasons may be that Rounds knew — or Grandison Newell coercing

Rounds — that Joseph and Sidney had been elected officers and were the

ones who most prominently signed the notes, so there was a stronger case

against them.

Russell Stevenson: You say there was a stronger case against them. Was that primarily the

motivation or was there some potential political or even religious issues

underlying this?


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Elizabeth Kuehn: There are definitely political issues. Grandison Newell is doing everything

he can to destabilize the Kirtland Safety Society Bank and to really kind of

get people to question its legitimacy. It was already rocky without a

charter, and it’s suggested in reminiscent accounts that he was establishing

runs on the bank to drain its species. We have one or two accounts of that

and probable times that he might have done that. Yet, this lawsuit is

another way to attack the legitimacy of the bank.

Russell Stevenson: During this time, we also see a tremendous Ohio land boom.

Elizabeth Kuehn: Yeah.

Russell Stevenson: Prices in land are going through the roof, right? It’s worth much, much

more. It increases by incredible degrees between 1830–1836. What role

did that play in all this? Was that a symptom of something? Did that cause

certain developments?

Elizabeth Kuehn: The inflation is staggering. It’s also a real difficulty for the Kirtland Saints

because you have a lot of growth in Kirtland from 1835–1837. It’s just

phenomenal growth in Kirtland — the population almost doubles. Most of

that is converts to Mormonism who are gathering to Kirtland.

You see these new converts who have often used all their resources to get

to Kirtland that then face these exaggerated, inflated prices. Interestingly

enough, in the fall of 1836, one thing that Joseph did in trying to establish

the church business-wise was that he purchased a significant amount of

land. He purchases around 400 acres, mostly on promissory notes, loans,

and promises of later payment.

This large amount of land, we think it served dual purposes in that the

Saints could then buy the land from Joseph at a much lower rate rather

than the highly inflated rate of the surrounding [speculators], and it also

probably served as collateral for the bank — security for the bank notes.

Russell Stevenson: Typically when you see profound inflation, it’s because of an influx or

currency or an influx of specie. Could you walk us through that as well?

Elizabeth Kuehn: Sure. In 1836, Andrew Jackson had signed into law a law called the

Specie Circular. This required specie payments — or payments in gold

and silver coins — for all purchases of government land. Before this law

went into effect, people could use these spurious bank notes. They could

use other loans and other less legitimate, less solid means of acquiring

land, which was driving up the inflation because there was such high

demand.

Russell Stevenson: When you’re dealing with all of this currency, and it doesn’t necessarily

have any kind of rounding or legitimacy, they have less confidence in it,

so therefore they demand more of it. Is that a fair conclusion?


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Elizabeth Kuehn: I think it is, yeah.

Russell Stevenson: You mentioned earlier that many of the people who helped to form the

Kirtland Safety Society were Latter-day Saints, but there were some who

were not Latter-day Saints. How about you tell us about those who were

not Latter-day Saints and why they would have invested in this institution

that was developed by people who were seen as religious radicals?

Elizabeth Kuehn: Yeah. It’s really interesting. We don’t have really good records for that

many stock holders. There are some that appeared possibly to be

merchants in the area that maybe are buying in for economic reasons. One

of the largely anti-Mormon papers comments that they’re highly skeptical

of the Mormon bank, but at the same time, they say, “This could be a real

benefit to this area because we need more specie. We need this kind of

economic stability that a bank will bring.”

There is this kind of reluctant admittance that it could be useful, even if it

is these religious radicals who say they see angels and have all of these

visionary experiences. Everyone’s kind of wary, and there’s a great deal of

religious prejudice in the press. But at the same time, there’s also this kind

of acknowledgement that a growing community the size of Kirtland was

really kind of ripe for a bank, and the area needed one.

Russell Stevenson: We’ve established the economic context, right? The Kirtland Safety

Society, they were already kind of on shaky ground. They were a quasi-

banking institution at best that did not enjoy state legitimacy. Many people

saw their notes as being potential spurious and not necessarily grounded in

specie. Eventually the Kirtland Safety Society collapses. How about you

walk us through the Kirtland Safety Society at its high point (if there was

such a point) to its low point?

Elizabeth Kuehn: Its highest point is probably when they open an office. That happens in

early January of 1837. That’s when we see — and where we get the only

records we have — loans being made. You get this idea that it is

functioning in the way that Joseph had hoped and is really helping the

economy and helping provide the funds that the Saints need to create

businesses or build homes or do these kinds of things that he saw to really

create a gathering place for the Saints.

Of course by the end of that month — the last few weeks of January —

there’s a closure. This closure is written up in Cleveland as a failure of the

bank. Some accounts are circulated that it fails less than a month into its

existence. It’s only a 24-hour closure as best as we can find. Wilford

Woodruff in his journal says that they have threats from northeastern Ohio

— kind of the Mentor–Painesville area — of a mob coming to destroy

their bank.


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Then one of the Cleveland papers that’s sympathetic to the Saints kind of

depicts this mob that attacks the bank. We don’t know if this is a figment

of that editor’s imagination or if this is actually based in a real account,

but there’s some kind of threat and the bank closes very briefly.

Right after this closure, Joseph Smith, Sidney Rigdon, Hyrum Smith, and

Oliver Cowdery go to Michigan and form some type of agreement, some

type of partnership with the Bank of Monroe in Michigan. There’s very

little documentation for that, so it’s really hard to tell exactly what they’re

doing, but Oliver Cowdery is put on the board of directors for that bank,

and there seems to be some kind of alliance between the two institutions.

Russell Stevenson: Would it be maybe a kind of bail out?

Elizabeth Kuehn: It’s possible that they were looking at functioning under the charter of the

Bank of Monroe had and kind of acting as a branch of that bank in Ohio.

It’s not clear if they understood all of the technicalities of interstate

chartering and banking. It’s also possible that they were just forming an

alliance with another bank that would kind of have their back in terms of

specie and legitimacy, to say, “Look, this bank that does have a charter is

backing us.”

That doesn’t end up panning out all that well. The Bank of Monroe

actually closes by April and fails — possibly because of the loans that

they give the Kirtland Society that are not repaid. It’s hard to tell exactly

what caused it, but that’s definitely a factor.

Then Oliver Cowdery leaves Michigan and returns to Kirtland and is

residing in Kirtland by April, so it’s a pretty short-lived stint. It’s also in

March that Joseph Smith sends Brigham Young and Willard Richards east

on a financial or business mission. We don’t know the full details of this

mission, but it appears that they’re trying to bargain with creditors for the

stores and maybe even get donations or funding for the bank.

This is kind of a rocky time, and then with the Panic of 1837 in early May,

you see the economy really bottom out. This really creates problems. This

is when banks across the nation will suspend specie redemption, and the

Kirtland Safety Society actually seems to continue a little bit beyond the

point that the authorized and legislated, approved banks do.

By June, Joseph is kind of reading the signs of the times. We know that he

seems to want to close the bank before it fails, but the bank directors

decide that that’s not what they want to do, so Joseph and Sidney step

down as elected officials and are replaced by Frederick G. Williams and

Warren Parrish — both of whom were disaffected by the church at this

time. We kind of see that playing into some of the frustration here. Joseph


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has distanced himself by June and July of 1837, and that’s also when he

sells his stock in the bank.

Russell Stevenson: Now why did Frederick G. Williams and Warren Parrish want to continue

the Kirtland Safety Society when it was pretty clear that it was looking

unstable?

Elizabeth Kuehn: I think they have this idea that maybe they can make it successful — that

maybe if you just try a little bit harder, you’ll make some money.

Russell Stevenson: None of them took Joseph seriously as a financier.

Elizabeth Kuehn: I think there are a lot of doubts about his temporal abilities and if he’s led

the church in ways that make sense economically. Of course, you’d had

this sense of almost a failure of his prophecies for Kirtland. He’d really

depicted it to, according to Wilford Woodruff, as what would become a

grand city and a city that would be very well-established in trade and had

really encouraged the Saints to invest in the city. Of course, then you have

the Panic of 1837, where unfortunately it’s a complete reversal of that.

Russell Stevenson: When we talk about the Panic of 1837, and we talk about bank panics, the

way that many 21st century Americans — especially when we’re talking

about bank panics of times past, before the internet and the digital age —

visualize It’s a Wonderful Life.

George Bailey, he has a savings and loan company and all these people

run into the bank, and they want to withdraw their money. He says, “Well,

you know, your money’s in this person’s home, and your money’s in that

person’s home.” How about you walk us through what this looked like

within the Latter-day Saint context in Kirtland.

Elizabeth Kuehn: The interesting thing about the Kirtland Safety Society is that it’s not a

deposit bank, so it doesn’t have that It’s a Wonderful Life connection

because it isn’t actually my money in your home, right? It’s funded based

on shareholders or on equity, so it’s stock holders who have subscribed for

stock and are essentially slowly paying for that stock, and that’s the

funding for the bank. The bank exists because John Johnson and Oliver

Cowdery and Emma Smith have all paid a portion for the stock of that

bank.

Russell Stevenson: That’s why some people tend to argue that it is as much a joint-stock

company as it is a bank.

Elizabeth Kuehn: It has been argued that it was a joint-stock company, and with the shift in

this company rhetoric of the organizing of documents in January, it’s

possible that they’re going in that direction — but all 19th-century banks

essentially did hold stock jointly, so it’s kind of a distinction without a real

difference in that a bank should have stock held jointly, and they seem to


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want to run it as this quasi-bank. So it’s possible that it functioned as a

joint-stock company, but most things did.

Russell Stevenson: Right. So saying that it’s a joint-stock company versus a bank, it’s not

really a meaningful distinction, as you say?

Elizabeth Kuehn: Not historically. It has been used in other arguments to kind of justify why

Joseph maybe should not have been brought up on the statutes that are

used against him to form that lawsuit because he was running a company

and not a bank. Those statutes also clearly say that any institution that’s

issuing bills will be considered a bank, regardless of what it calls itself.

Russell Stevenson: The Kirtland Safety Society falls apart in about the summer of 1837.

Elizabeth Kuehn: Right.

Russell Stevenson: This causes a massive — at least to use a 21st century parlance — faith-

crisis within the Latter-day Saint community.

Elizabeth Kuehn: Absolutely.

Russell Stevenson: But what was the nature of this faith crisis? Who were the people who

were leading the charge? Who were the people who were the most vocal

in their criticism about Joseph Smith, who were those who were the most

staunchly defensive of Joseph Smith, and how did they defend him?

Elizabeth Kuehn: The faith crisis seems to center on a lot of individual issues that people

had with Joseph. Financial concerns are a huge part of this and that kind of

failure-prophecy, where so many people had invested a great deal and a lot

of hope, optimism, and ambition in this kind of dream of a Kirtland that is

a stake of Zion — this great gathering place. What they get in the end is

actually loans that are being called in, land that they can’t sell, and other

economic issues.

Parley P. Pratt is one of the first to put his frustrations into writing. He

writes kind of an attack letter to Joseph in late May, where he accuses

Joseph of using his position as church leader to benefit himself and of

encouraging the Saints toward speculation. It even accuses him of

extortion.

One of the core points of Pratt’s letter is this idea that he had purchased

land from Joseph, and Joseph had promised him that he wouldn’t be

financially injured by this — that it would be to his benefit. I think in

fairly dire financial straits himself, Joseph turns over this promissory note,

probably, that Pratt had given him to pay for this land to the Kirtland

Safety Society bank. Then the bank, represented by Sidney Rigdon, comes

to Pratt saying, “If you can’t pay this, we’ll take your land and the house

that you built on this land.”


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That’s kind of the situation facing Pratt — he could lose his home; he

could lose his land; he could lose all that he had hoped for in this growing

community of Kirtland. He understandably lashes out at Joseph and says,

“You’ve led us all astray.”

Warren Parrish is the first to talk about Joseph as a false or fallen prophet.

I think largely tied to this idea of a failed prophecy. “You told us we were

going to be prosperous, and instead we got the Panic of 1837 and

economic collapse. It went opposite to what you were saying.”

There’s also this sense of frustration with the control that Joseph has and

the hierarchy of the church that he’s creating. Several feel that they don’t

have the places they deserve. Warren Parrish seems to chafe under that as

well. He had been Joseph’s right-hand man; he’d been his scribe. Joseph

had spoken very fondly of Parrish in 1835, calling him “my beloved

scribe.” Yet by 1837, we see a Parrish that is very distant from Joseph and

is very aggressively calling him a liar and a fallen prophet.

It’s hard to unpack all of the reasons for this, but I think a lot of it comes

down to their expectations of Joseph Smith as a prophet. There seems to

be this expectation that he should have known that the economic collapse

was coming. He should have had this foreknowledge and been able to

warn them rather than leading them down a path that would be even worse

in the long-run.

Russell Stevenson: Tell me, then, about those who were Joseph Smith’s defenders.

Elizabeth Kuehn: Absolutely. Joseph actually does something really interesting in sending

Heber C. Kimball — who is one of his defenders — to England on a

mission. He loses both Heber C. Kimball and Willard Richards — two

men who had been very valiant toward the church and very much

supporters of him. He sends them off to proselyte in Great Britain.

He does, however, keep Brigham Young by his side, and we know that

Brigham is a staunch defender of Joseph and will even defend him years

and years later through discourses that he gives as prophet of the church in

Utah, where he talks about Joseph’s generosity as well as his reluctance to

exercise the extent of his ability either in this banking sense or this

mercantile sense to say, “You owe me; I’m taking you to court.”

We never see Joseph litigate on any of the debts that his family or close

friends had against his institutions, whether it be his store or the Kirtland

Safety Society bank. As cashier of that store, it was well within his right to

take every single stock holder who had failed to pay the expected amount

to court to get that income.

Russell Stevenson: He didn’t pursue his own interests as aggressively or as vigorously as he

could have, according to the law.


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Elizabeth Kuehn: Absolutely, yeah.

Russell Stevenson: What kind of arguments did Brigham Young use to defend Joseph Smith?

Elizabeth Kuehn: One of the arguments that he uses — and this is hard to set and it could

either be referring to Kirtland or Nauvoo — is that he talks about how

Joseph as a merchant would have people come in and ask for goods, but

often they wouldn’t be able to pay for those goods. Rather than denying

them those goods, he would give them even at loss to himself for fear that

by being very strict and very hard, he would lose people as followers; that

they would turn away from a really kind of draconian or cruel mercantile

demeanor.

Russell Stevenson: Brigham Young once publicly said, “I am very well aware of Joseph

Smith’s deficiencies as a man of temporal affairs.”

Elizabeth Kuehn: Right.

Russell Stevenson: It’s clear that Brigham Young was aware of Joseph Smith’s weakness; he

was aware that Joseph Smith really didn’t know what he was doing when

it came to business. So how did he work through that?

Elizabeth Kuehn: I think he and several others are able to say, “I will follow him. I have a

testimony of him as a prophet, and these temporal manners are less

important to me; I can move past them. These aren’t going to be the things

that break me.”

Russell Stevenson: See, that’s interesting to me, because if you look at the law of consecration

being applied in Independence, Missouri, that law was very temporally

based. It had to do with the giving, exchanging, and using of land. There

was no way to separate Joseph Smith’s law in that regard from temporal

affairs, yet here you are in Kirtland doing just that. You say, “Okay,

there’s Joseph Smith the prophet, then there’s Joseph Smith the financier,

the banker, and the rather deficient guardian of temporal affairs.”

Are you seeing the contrast that I am?

Elizabeth Kuehn: I don’t think it’s quite as distinct as that. I don’t know if in being able to

move forward from these kind of failed financial prophecies that they’re

thinking of Joseph in these two very separate roles. We know that some

dissenters — Joseph Coe, for example — essentially say, “I think I’d be

better at the temporal affairs than Joseph would be.” We know that Joseph

and a lot of the others who are involved in the bank have very little

banking knowledge or experience, so they really are kind of at a deficit.

But at the same time, I think you have a lot of silent acceptance of

Joseph’s limitations and a willingness to try out this hopeful venture then a

willingness to say, “Okay, it didn’t work.”


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Wilford Woodruff is one of the great examples of this. He puts in $5.00,

and it pays for stock. Then in May when things aren’t looking very good,

rather than raising all of these objections to Joseph, he just says, “Can I

have my $5.00 back?” He withdraws it and goes on his merry way.

There’s no faith crisis for him.

Russell Stevenson: Interesting. Is it correct, then, that Joseph Smith prophesied that the

Kirtland Safety Society would be successful?

Elizabeth Kuehn: That’s a really interesting question. Technically, he did not. Wilford

Woodruff records in his journal that on the first day that the notes were

available and exchanged, that Joseph had said that he had a revelation that

the bank would be successful if executed on righteous principles. Later, in

a meeting on September 3, 1837, when John F. Boynton will bring up this

very question of “Well, the bank was founded on revelation. How could it

fail?” Joseph will correct him and say, “I never said that. I said that it had

to be conducted on righteous principles, and it was not.”

There is this sense that he’s not only defending the failure of the bank, but

also limiting the revelation. This isn’t a continuation of the United Firm.

This isn’t something that we have a revelation laying out exactly what

they should do. It seems more as if he’s receiving direction to try

something out or that he, Sidney Rigdon, and others have said, “A bank

looks really promising. Let’s move forward with this.” You kind of get the

revelation after the fact saying, “Okay, this is what you want to try. Try it.

If you function in the way that it’s supposed to, it can be successful.”

Russell Stevenson: Joseph Smith says that it was not governed on righteous principles. Was

he implicating himself? He was kind of heading up the thing. Was he

admitting his own unrighteousness?

Elizabeth Kuehn: It’s possible that he’s acknowledging some faults. He doesn’t make that

clear in those September 3rd meetings. It’s also possible that he’s pointing

to mismanagement by Warren Parrish. Parrish was doing something

untoward. Heber C. Kimball later suggests that Warren was doctoring the

books. Brigham Young in accounts suggests that Parrish is putting used

notes back into circulation, probably under his own name — using notes

that had been paid off and then recirculating those.

Parrish is accused of doing a lot of disingenuous things. We don’t have

good documentation for any of those, but it’s possible that Joseph is kind

of pointing the finger at Parrish, who took over after him in the June–July

1837 period. He ultimately is the one to collapse the bank.

Russell Stevenson: When you say we know he was doing something untoward, do we know

that based on the comments of Brigham Young and Heber C. Kimball —

both of whom were some of Joseph Smith’s closest advocates?


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Elizabeth Kuehn: It does seem to be solely from them. Samuel Whitney (Newell K.

Whitney’s brother), who is no supporter of the church, also in his later

discussions about the bank with Newell, suggests that Parrish is actively

still trying to change the names on the bank books. That’s a less close to

Joseph source to suggest that Parrish is manipulating facts.

Russell Stevenson: What would you say the applicability is of this incident to 21st century

Mormonism?

Elizabeth Kuehn: I think there are a couple things. One, I think we need to understand the

Kirtland Safety Society in the context that it existed. Oftentimes it’s

presented as this weird or reckless endeavor when actually, it’s kind of

born out of ambition, and it makes a lot of sense for them to try. Even their

detractors note that it makes sense. Joseph tries it, and it fails. He’s

disappointed by this, but it doesn’t consume him. He’s able to move on.

Many others are able to move on.

Joseph Young will later in Utah call this a stumbling block for the Saints

— a moment where they have to decide whether or not Joseph is a prophet

and whether or not they will follow him. I think, for me, that’s the larger

take away. This question of “What are the expectations of a prophet?” and

looking closely at this period of dissent, this period of faith crisis, and

these questions of “Where do you draw your lines? How do you voice

your disagreement?”

We see many different examples of this across the spectrum with the

Kirtland Saints from Parley P. Pratt who comes out really strong and

angry, then is one of the most repentant. Then you have the quiet

acceptance of Wilford Woodruff and the staunch acceptance of Brigham

Young, who maybe realizes some of the shortcomings but is able to move

forward.

Then I think you also get some really nice recognition in the letters of

Vilate Kimball, where she recognizes what the dissenters are feeling and

experiencing. They feel betrayed; they feel this sense of being unheard;

they’re not being part of the decision making process that they want to be

part of. She says, “You know what? I feel a lot of sympathy and pity for

them, but the Lord requires His people to be chastened.” That’s kind of

where she ends it, with this expectation of, “You kind of have to get in

line with the Prophet if you’re going to continue with the Saints.”

Russell Stevenson: Excellent. I think those are all very interesting and compelling angles to

this rather complicated issue. It’s an issue that deals with specie, 1830s

finance laws, bank vetoes, and all these things that feel so distant and

separate from the world we know today.


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But as we know, when we’re studying history, to some extent we should

be able to extract insight and foresight from them as we manage our day-

to-day lives as well as managing our world views and belief systems.

Elizabeth Kuehn: Absolutely.

Russell Stevenson: In one of Truman G. Madsen’s lectures, he commented in regards to the

stock ledger and its discovery. He said, “We can finally know that Joseph

Smith was fundamentally an honest and upstanding man.”

Do you think that, based on your rather extensive archival research of the

subject, that his assessment in correct?

Elizabeth Kuehn: Joseph loses more than any other individual in this endeavor. We don’t

have an exact amount, but it’s at least $6000, which is substantially more

than any other stock holder. For those who want to frame this as fraud, for

those we want to frame this as Joseph using the bank for his own means

— he loses substantially more than anyone else. I think he’s willing to

tolerate that loss in this effort to help the Saints and to use the bank for

what he sees its needs for: to help the church.

Russell Stevenson: Does he take efforts to repay those to whom he’s indebted?

Elizabeth Kuehn: We think so. There’s not really great documentation for this. Oliver

Granger and Jared Carter are the individuals who are put up as agents for

the bank. Stock is sold to them. It appears that for the stock that’s given to

them, they are repaying those individuals for that stock. Say I transfer you

two of my shares of stock. They would repay what you had paid me for

that.

There does seem to be some good faith efforts on his part, but the laws of

the state of Ohio also didn’t require him, after the bank had failed, to make

those kind of payments.

Russell Stevenson: Thanks so much for joining us, Elizabeth.

Elizabeth Kuehn: Thanks for having me.

Disclaimer: LDS Perspectives Podcast is not affiliated with The Church of Jesus Christ

of Latter-day Saints. The opinions expressed on this episode represent the

views of the guys and the podcaster alone, and LDS Perspectives Podcast

and its parent organization may or may not agree with them. While the

ideas presented may vary from traditional understandings or teachings,

they in no way reflect criticism of LDS Church leaders, policies, or

practices.

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