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Kirtland Banking Crisis (Part 3): Joseph Blamed

Here’s our final episode on the Kirtland Banking Scandal.  (Here is Part 1.)  I always blamed Joseph’s financial troubles on lack of business sense, but it seems like there were other people conspiring against him.  Given the reasons cited in our previous episode, Grandison Newell trying to create a run on the bank, as well as John Johnson selling lands that was serving as collateral for the bank, why was Joseph blamed? Are there other reasons that we need to talk about?  Dr. Mark Staker, anthropologist at the LDS Church History Library said,

Whether guilt or compassion for everybody else or whatever, he begins to take on the debts of all these individuals who have been losing money under his—people who have gotten loans to operate businesses, and probably primarily it was the church, he’s calling in all those debts to try to settle the books.

Newell took Joseph to court.

Now did that exonerate Joseph for operating the institution without a bank charter?  No because he ended up being tried and convicted for that.  But did Joseph have honorable intentions through the whole thing?  Absolutely.  He tried to make every effort to pay off all the debts that were incurred in the process and even the very last night of his life, while he was laying on the floor in Carthage Jail, he’s still dreaming about those Kirtland troubles and he’d been weeks before that sending letters out to people and warning people not to take Kirtland bank notes.  They weren’t good anymore.  It haunted him for a long time afterward.

It was a very interesting episode!  I’d like to thank Dr. Mark Staker for spending so much time telling us about the Kirtland Era of Mormonism!  Check out the video below, or a transcript at Amazon or here on our website!

https://gospeltangents.com/shop/transcripts/kirtland-banking-crisis-part-3-joseph-blamed/

 

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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?

Please get a transcript here or at Amazon to help support more podcasts and documentaries such as this.

https://gospeltangents.com/shop/transcripts/kirtland-banking-crisis-part-2-why-it-failed/

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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?