Hi, and welcome back. In this episode, we take a look at a situation where Joe’s greed exceeds his grasp, resulting in an oncoming internal firestorm among the leadership and the membership. So, grab your weenie and grab your stick and let’s get the fire started. Speaking of grabbing your weenie, there’s so much financial fuckery going on that Joe doesn’t get around to the other kind until Lucinda Pendleton Morgan Harris, next episode. Sorry ’bout that!
A little money melody to get you in the mood:
And now, our semi-regularly scheduled episode:
By the end of 1836, Kirtland has grown into a community of over 3000. The surrounding area is filling up as well, as Mormonites continue to migrate to Ohio. Land prices have risen from $7 an acre in 1832 to $44 an acre in ’37. Due to land speculation, the land within a half mile of the Kirtland temple is going for $2-4,000 for a quarter acre. (Somebody’s been soaking the suckers, I wonder who?) The church itself owns quite a bit of land, but has a bit of a liquidity problem.
Who has money? Well, banks do and before the “War of Northern Aggression” (that the South starts) banks can print their own money.
Joe claims that he and Big Daddy have a chat on the matter and Big D is all for starting a bank. In the words of Joe’s scribe, Warren Parrish: “I have listened to [Joseph Smith] with feelings of no ordinary kind, when he declared that the audible voice of God, instructed him to establish a banking-anti banking institution, who like Aaron’s rod shall swallow up all other banks (the Bank of Monroe excepted,) and grow and flourish, and spread from the rivers to the ends of the earth, and survive when all others should be laid in ruins.” Plainsville Republican, February 22, 1838
Talk about a solid investment! Guaranteed by GOD HIMSELF to not only succeed but to dominate the entire world’s banking system. (Forget the fact that nobody has any banking experience in the first place. Minor matter!)
In late 1836, Joe sends Orson Hyde (One of Joe’s on-again-off-again 12 Apostles.) to Columbus to get a bank charter from the legislature.
Orson arrives back in Kirtland (1/1/1837) and the news isn’t good. He can’t find even one legislator to sponsor a bill to give them a charter. Joe insists it’s because of anti-Mormonite bigotry, stirred up by a man named Grandison Newell. I’m sure there’s a bit of that, but mostly it’s because the legislature is dominated by hard money Jacksonian Democrats. They only grant one bank charter in two years.
Well, since Joe can’t have a bank, he’ll have an “anti-bank” Thus is born the Kirtland Safety Society Anti-Banking Company (KSSABC). (1/1/1837) (Yah…. I don’t know what an “anti-bank” is either. I looked it up, but the only information I could find referred to KSSABC. It seems that this is the only “anti-bank” that ever existed. So, hang on, maybe by the time this episode is over we’ll both know what this goober is.)
The very next day (1/2/1837) KSSABC opens for business. Sid is made chairman and president. Warren Parrish (He of the last quote.) is bank secretary and teller. And Joe? Well, he’s just a lowly cashier. (Riiiiiiight!) Of course, Joe’s signature is on the money.
The anti-bank is capitalized at $4,000,000. There’s just one problem with that: The backers don’t have near that amount of money or securities. In fact, the total capitalization of all the banks in Ohio is only $9,300,000.
So, if you can’t make it, fake it. For those questioning the capitalization, “Lining the shelves of the [Kirtland Safety Society] bank vault… were many boxes, each marked $1,000. Actually these boxes were filled with ‘sand, lead, old iron, stone, and combustibles’ but each had a top layer of bright fifty cent silver coins.” C.G. Webb W. Wyl: Mormon Portraits p 36 (1886)
This essentially makes the anti-bank, a wildcat bank. Wildcat banks distribute nearly worthless currency backed by questionable securities. This practice is stopped after the passage of the National Bank Act of 1863. However, this is much too late for the suckers who invest in this boondoggle.
One interesting aspect of the anti-bank. It doesn’t keep records of what Joe and the church leadership borrow from the bank. (That’s very convenient.) To be fair, they don’t keep accounts of what the church members deposit either, but they do keep track of their non-Mormonite accounts.
Grandison Newell buys up a lot of KSSABC notes and demands they be redeemed. (1/1837) This probably wipes out almost all the gold and silver the bank has in those boxes.
Before the month is over, (1/23/1837) the “anti-bank” announces it can’t redeem its notes in gold, only in land. (Ooooops!) There’s a minor bank run but the bank survives……for a while. A few days later, (2/1/1837) KSSABC notes are circulating at 12.5 cents on the dollar.
Joe rounds up some non-Mormonites and they apply for a charter again. (2/7/1837) This time it makes it on to a bill, but the bill is rejected.
Joe, Sid, Ollie and Joe’s bro, Hyrum buy the Bank of Monroe (Michigan). (2/10/1837) (I mean, KSSABC is working out sooo well.)They pay the owners $3,000 in Bank of Cleveland notes ( Not KSSABC notes? Hmmm.) and $95 in coin. In return they get $20,026 in Bank of Monroe notes. Joe takes out a loan, (Can you say “personal piggy bank?) and they head back to Kirtland. When they get there, Sid buys 1000 shares of KSSABC with $200 in Monroe notes.
Later in the month, Samuel Rounds files charges against Joe & Sid for illegal banking and issuing unauthorized bank paper. Seems Michigan has a law that says only corporations can own banks and issue money. (You’d think Big Daddy would have clued them in.)
The Bank of Monroe shuts down. (3/13/1837) (A month from buy-out to bank-be-gone? Another shrewd move by the financial geniuses. Of course, Joe has already gotten at least one “off-the-books” loan and probably several others have as well. Btw, I thought Big Daddy said they were going to dominate financial circles. Well, that’s what Joe said he said, and Joe wouldn’t lie now, would he?)
Rounds’ lawsuit against Joe & Sid gets delayed (3/1837) until the fall at which time they are found guilty and fined $1000 each.
In April, Joe takes off to parts unknown just ahead of a constable’s posse. (In fact, he “gets outta Dodge” so fast, he doesn’t even stop to tell Emma.) This keeps happening with increasing frequency over the next few months as visits from creditors, irate depositors and the sheriff keep happening with increasing frequency over the next few months.
By May, the natives are getting restless in Mormonite Land. There’s mutterings of mutiny over Joe’s stewardship (especially his anti-bank stewardship.) It takes both Joe and Sid to calm the cacophony at a Sunday service. (5/28/1837)
A few paragraphs ago, I made a crack about Joe’s “on-again-off-again” apostles. I’ve also been foreshadowing “inner circle” power plays and purges. This is where they start picking up speed. (5/29/1837) The Kirtland high council puts the following on trial:
- David Whitmer Dave was one of the “3 Witnesses“. He’s currently the president of the church in Zion (Although, at this point, the church has been kicked out of Zion.) and Joe’s rightful successor. He’s also the president of the High Council.
- Frederick Williams Fred’s the 2nd Counselor in the 1st Presidency. (Sorta, technically, he’s #3 in line, but it really depends on the power structure at the time.)
- Lyman Johnson Lyman’s one of Joe’s 12 apostles.
- Parley P. Pratt We met P.P.P. briefly in episode 2. By this time, he’s one of the apostles. (The husband of his 9th wife hasn’t caught up with him yet.)
- Warren Parrish Warren, of course, is Joe’s current scribe and secretary as well as bank teller.
Officially, the charge was “Conduct unworthy of their high calling”. Unofficially, it was more akin to “Not supporting the official spin”.
If you read the minutes of the trial, it appears this is primarily Sid’s undertaking. The charges, several members of the court, and the very court itself are challenged. (From the notes of the trial, it has the potential for being a bad sit-com episode.) At the end of the day, all charges are withdrawn.
Joe resigns from the anti-bank. (6/8/1837) Warren Parrish and Fred Williams take over management. I guess they’re back in Joe & Sid’s good graces. (Or are they???)
Later in the month Joe tries to get a warrant accusing Parrish of embezzling $25,000 from KSSABC. The warrant is denied! Probably because Joe can’t even prove the bank has $25,000 left to embezzle. (Which might have something to do with those “off-the book” loans to church leadership.)
Jumping ship doesn’t help Joe much. Over the next two years he has 17 lawsuits brought against him, totaling $60,000. (Over $1,260,000 in 2013 greenbacks)
He’s also busted seven times within a four-month period. It cost the
suckers, er…saints (Nah, I was right the first time.) $38,420 for bail money. ($806,820) Fawn Brodie: No Man Knows My History pp. 199-202; Vintage Books (1973)
Speaking of being busted, the next day (6/9/1837) Joe’s on trial in Painsville for “conspiracy to commit murder“. While evidence is given about a plot to kill Grandison Newell and at least two attempts at carrying it out, there is no direct evidence that links Joe to the crime. As close as it gets is Orson Hyde’s testimony that he “seemed much excited and declared that Newell should be put out-of-the-way, or where the crows could not find him; he said destroying Newell would be justifiable in the sight of God, that it was the will of God, &c.” Henry II said something similar about Thomas à Becket back in the 12th century, and we all (should) know how that turned out.
Joe dumps 20,000 shares of KSSABC. (6/20/1837) I guess Joe finally figures out that Big D was pulling his leg (or some other extremity) when he said the anti-bank would dominate the financial world. (Plus, the shares are almost completely worthless at this point.)
Final entry in the KSSABC ledger is recorded. (7/2/1837) The bank doesn’t close on that date, they just quit writing anything down.
Joe, Sid and Tom Marsh split for Canada “on church business”. (7/28/1837) They get back a month later but don’t provide information about what the “business” was.
Meanwhile, back in the power struggle
While Joe’s gone off to Canada, David Whitmer renounces him as a fallen prophet, and along with Ollie & Marty, puts his faith in an ecstatic dancing, seer stone using, prophetess. Lucy Smith, Biographical Sketches, p. 211 (1853) But when Joe gets back, they go back.
Joe denounces the anti-bank leadership that he installed: (8/1837) “I am disposed to say a word relative to the bills of the Kirtland Safety Society Bank. I hereby warn them to beware of speculators, renegades and gamblers, who are duping the unsuspecting and the unwary, by palming upon them, those bills, which are of no worth, here. I discountenance and disapprove of any and all such practices. I know them to be detrimental to the best interests of society, as well as to the principles of religion.” Messenger and Advocate, August 1837 (That fragrance you’re smelling is called “Essence of Scapegoat”. If Warren and Fred are doing this, and they probably are, they’re just following in the footsteps of the master.)
Apostles Luke Johnson, Lyman Johnson, and John Boynton are kicked out of the church. (9/3/1837)
Joe says he has a “revelation” from Big D that W.W. (Willie Wine) Phelps and John Whitmer have done bad things. (9/4/1837) Joe doesn’t elaborate.
What he’s probably talking about is the fact that Willie Wine & John have laid out the Far West town site and the temple lot without talking to him first. (Naughty, naughty!)
Luke Johnson, Lyman Johnson, and John Boynton are brought back into the church and reinstated as apostles. (9/10/1837) (Wow! Banished for one week! I think I’ve previously mentioned “off-again-on-again” apostles. Many more to come.) Joe & Sid deny they had anything to do with the previous week’s excommunications. (Yah, right!)
Joe & Sid leave Kirtland again. This time, they go to Far West, Missouri. (9/27/1837) (“Willie Wine & John “got some ‘splainin’ to do”.) They arrive in late October.I guess they ‘splain’ pretty well, because Willie Wine & John get to keep their positions in the church. However, Fred Williams is dumped as councilor in favor of Joe’s bro, Hyrum. (11/11/1837)
Btw, If you look at the above map, you’ll see a spot marked Adam-ondi-Ahman. MAJOR spot in Mormonite mythology. I’ll explain when I get to the “Mormon War” episode. I’ll also explain why Independence is Zion, and what it was originally. It may come as a bit of a surprise, to say the least!
Along those same lines, (sort of) I’ve got to find an appropriate place to discuss Joe’s thoughts on 1000 year old humans living on the moon. He says they all dress in the “Quaker” style. OoooKaay!
Meanwhile, back in Kirtland, people are getting more and more pissed off about this whole banking bullshit. With no records, they can’t prove it in court, but they’ve lost a lot of money. In a lot of cases, all their money. “It was natural that blame for the entire situation should be charged against the Prophet. They had gathered to Kirtland at his command; the idea of purchasing housing lots in the great subdivision scheme had his full support; he had inferred that the bank would not only succeed, but would one day be the most powerful institution of its kind” The Growth of the Mormon Church in Kirtland, Ohio,” typed copy, p. 233 as it appears in Mormonism – Shadow or Reality? p. 533)
As apostle Heber Kimball put it: “There were not twenty persons on earth that would declare that Joseph Smith was a prophet of God” Fawn Brodie: No Man Knows My History p. 203; Vintage Books (1973)
A number of church leaders decide it’s time to dump Joe. Apostles Luke Johnson and John Boynton (I think they were still pissed off about being excommunicated for a week.); Joe Coe, a high council member; and our boy Warren Parrish are the coup leaders. To add pressure, Warren begins to bad-mouth Joe about how he ran the bank.
The Kirtland high council promises “reform”. (10/18/1837) They agree to meet in a week to “commence pruning the vine of God in Kirtland. and thus continue the work evening after evening. until it shall be wisdom to stay the hands.” In other words, their “reform” is to kick out the loudest complainers. (aka “Dissenters”)
KSSABC collapses. (11/1837)
It’s been dead for a long spell. They’re just getting around to burying it.
Nobody really knows how much this “anti-bank” costs its Mormonite depositors since there aren’t any itemized accounts of their claims. Non-Mormonites are a totally different kettle of fish. Years later there are still outstanding debts to non-members and organizations totaling over $150,000 ($3,150,000)
The Panic of 1837 has been brought up as a cause of the failure. And, while it really doesn’t help the situation, the “Panic” doesn’t really hit Ohio for two more years. ’37 & ’38 are actually good years in Ohio with bumper crops and good farm prices.
- Let’s start with Big D’s “prophecy”. I quoted Warren earlier, but his statement was backed up at the time by several church leaders. Either B.D. or Joe is a liar. Your choice. (S.U.: 0; S.Y.: 1)
- Had plates printed before getting bank certification. (S.U.: 1; S.Y.: 1)
- Couldn’t get certification passed in legislature. (S.U.: 2; S.Y.: 1)
- Created world’s only “anti-bank”, which was really just a “wildcat bank”. (S.U.: 2; S.Y.: 2)
- Lied about the capitalization. (S.U.: 2; S.Y.: 3)
- Lied about securities ($1,000 boxes) on premises. (S.U.: 2; S.Y.: 4)
- Church leader loans “off the book” (S.U.: 2; S.Y.: 5)
- Mormonite deposits “off the book” (S.U.: 2; S.Y.: 6)
- Illegally bought a bank in Michigan. (S.U.: 3; S.Y.: 6)
- Joe immediately took an “off the book” loan from Bank of Monroe. (S.U.: 3; S.Y.: 7)
- Bank of Monroe closes after just a month. (S.U.: 4; S.Y.: 7)
While there are some definite “screw ups”, mostly it looks like a “screw you” operation. This fiasco is creating major schisms within the ruling body of the church.
Joe and Sid get back to Kirtland (12/10/1837)
The Kirtland council starts pruning the complainers. (12/1837) Cyrus Smalling, a member of the 1st Quorum of the Seventy (To Mormonites, the level right below apostle.); Joe Coe, a member of the high council (Joe had put up 1/3 of the mummy money back in ’35.); Marty Harris (Don’t worry. Marvelous Marty will be back in ’40 for a little while.); Luke Johnson (again); John Boynton (again); and Warren Parrish (surprise, surprise) all get excommunicated. This is just the start. The fecal matter finds the air flow generator big time in ’38. (Stay tuned!)
Next time, Joe and the gang split town permanently, the pruning continues in earnest and we’ll meet Joe’s next sexual conquest…er, wife? (She’s already married, but little details like that don’t mean a lot to “god’s anointed prophet”.)
In the meantime or in between time, if someone offers you some KSSABC bank notes, grab ‘em. They’re worth a lot of money as collector’s items. A $20 note goes for $2,750.
Non illigitamus carborundum! (Don’t let the bastards get you down!)