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Kirtland Banking Crisis (Part 2): Why it Failed

In my studies of the Kirtland Banking Scandal, I’ve blamed the bank’s collapse on simple ignorance.  Joseph Smith was a prophet, but didn’t know how to make a profit.  However, in talking with Dr. Mark Staker, an anthropologist for the LDS Church History Library, I discovered some nefarious outside influences.  A man by the name of Grandison Newell from a rival bank and competitor, purposely tried to induce a bank run.  Combine that with the fact of a nationwide real estate bubble, and the Banking Panic of 1837 looks even worse than our Great Recession of 2008.  Comparing the causes between 1837 and 2008 shows a similar cause:  real estate speculation.

But it wasn’t just that.  Banking competitor Grandison Newell actively tried to cause a bank run on the Kirtland Safety Society.  Staker says,

While that charter’s still kind of out in limbo, one of those local opponents of theirs, Grandison Newell, he wants to put the bank out of commission, so he goes up and buys up all the banks notes that he can buy, and he comes in and he asks for specie, which is hard currency, gold and silver coins rather than the paper notes and the bank has to trade for those and so all of this currency, all of this specie that’s in the coffers of the bank in the vault, they’re trading out to Grandison Newell and he’s trying to create a run on the bank.

I think the actions of Newell and Johnson are not well known and under-appreciated in the bank’s collapse.  The bank run worked (combined with John Johnson’s sale of bank property which sent real estate prices plummeting.)  In our next podcast, we’ll ask this question.  Given all these reasons for the collapse of the bank, why did Joseph take most of the blame?

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Kirtland Banking Crisis (Part 1): Why a Bank?

The year 1837 was one of the most turbulent periods in all of Mormon history.  It was the year the Kirtland Bank collapsed.  Many, including apostles, lost faith in Joseph Smith and his ability to lead.  Why did Joseph decide that Kirtland needed a bank?  What were the economic reasons behind this?  Historian and Author, Dr. Mark Staker talks about this in his book [Hearken O Ye People:  The Historical Settings of Joseph Smith’s Ohio Revelations] about the Kirtland period.  One of these events dealt that led Mormon leaders to consider a bank was a visit to New York City.

While they’re going out there, they go through New York and they visit Wall Street.  They see these trains.  They see all this industry going on and things.  Oliver Cowdery is writing back these letters and suggesting that banking is something that interested them.  Exactly how that congeals in their minds, what it is that they plan on doing?  Why?  What is it that they see that leads them to these decisions?  They come back and with the idea that they need to have a bank in Kirtland and they need to be able to print their own money to do their own things and it will foster this growth.

Listen to describe other events that led up to the Kirtland Bank.  (In part 2, we’ll discuss events leading to the collapse of the bank.)

 

Kirtland Banking Crisis (Part 1) – Why a Bank?

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Origins of Baptism for the Dead

Baptism for the dead is one of the most unique things Mormons do in all of Christianity.  What were the events that led Joseph to inquire about this practice?  Dr. Richard Bennett, a BYU professor in Church History talks about these events.  They started in Kirtland, although a lot of the events also happened in Nauvoo.

Alvin Smith, Joseph’s brother who died in 1823, was a big supporter of Joseph’s prophetic gift.  Alvin died from what was called bilious colic back in the day.  Doctors gave him some mercury to cure him, which ended up killing him.  The cure was worse than the disease in that case.  A Presbyterian minister said that since Alvin was never baptized, he was consigned to hell.  Joseph Smith, Sr. was so offended that he never joined with any of those protestant churches.  I asked Dr. Bennett if this was the source of Joseph’s thoughts on baptism for the dead.

It’s reasonable to suppose that this was a factor, but it’s impossible to prove.  It is certain though that Joseph Smith, Sr. himself is sick and dying in 1839, before Joseph Smith reveals baptism for the dead, and he dies within days of a few weeks of the announcement and Joseph Smith is clearly thinking about his father and perhaps of Alvin, so you wouldn’t want to dismiss this as immediate factors for it, but you can’t say for certain yet. We haven’t found anything yet where Joseph Smith says, this is where I came up with this idea.  It was a process of revelation.  We talked about the reclamation of revelation.  We have to think about the progression of revelation too.

What is the answer to the Haun’s Mill Massacre?  Joseph now is not just leading a church, people are dying for his religion.  The ante goes up in his mind.  It’s one thing to believe in what I’m telling you but people are giving their lives for it.  The Missouri conflict and conflagration, all those who died in sickness and death, David Patton [an apostle who died at Battle of Crooked River] and all the rest of the young boys and men and all the rest who died at Haun’s Mill, well what’s my answer to this?  What’s the Lord’s answer to this?  I think Joseph was asking the Lord very carefully.  We’re having an H of a time.  What are the answers to this?  I think that’s where you have to see baptism for the dead coming out of a much bigger context.

It should be noted that the Kirtland Temple never had a font.  A previous discussion said it was originally intended to be a school, not a temple, so that may explain some of that.  We talk about the Spirit of Elijah as being a spirit of genealogy work.  Could Elijah’s visit be more properly recognized as sealing dead ancestors through temple work, more so than marriage sealings?  What do you think?

Please consider a donation or purchasing a transcript here or at Amazon so we can put together some documentaries about the progression of temple work.  Please invite your friends and family who have questions about Mormon history to listen to the podcast above, video below so more can find out about this resource to learn more about Mormon history.