This was originally posted at Mormon Matters on Feb 20, 2009. Â I am re-posting it on my website with comments from there.
ByÂ Mormon Heretic
Since Hawkgrrrl does not offerÂ Virtual RS/PH lessons anymore, I thought Iâ€™d try my hand at it this one time. My wife was preparing Lesson 27: Beware the Bitter Fruits of Apostasy, and I couldnâ€™t help but think that this was a perfect bloggernacle discussion.
From the Manual
â€œIn the weeks before and after the completion of the Kirtland Temple in the spring of 1836, the Saints experienced a time of harmony and a rich outpouring of the gifts of the Spirit. But the Prophet Joseph Smith warned the Saints that if they did not continue to live righteously, their joy and unity would not lastâ€¦..â€
â€œAs that year wore on, a spirit of apostasy grew among some of the Saints in Kirtland. Some members became proud, greedy, and disobedient to the commandments. Some blamed Church leaders for economic problems caused by the failure of a Kirtland financial institution established by Church members. This failure occurred in 1837, the same year that a banking panic swept across the United States, compounding the Saintsâ€™ economic problems. As many as two or three hundred members fell away from the Church in Kirtland, sometimes joining with those who opposed the Church to torment and even physically threaten the Saints. Some apostates openly claimed that the Prophet was fallen and tried to have other men put in his place.â€
When Joseph Smith encouraged the saints to move to Kirtland, the city experienced a significant population increase, tripling from 1000 people to 3000 people between 1830 and 1836. Surrounding agricultural areas experienced similar increases in population. The population growth was at least partially responsible for a rapid increase in land prices between 1832 and 1837. Daniel H.Â Ludlow, in â€œChurch History, Selections From the Encyclopedia of Mormonismâ€ tells us â€œThe average price per acre of land sold in Kirtland rose from approximately $7 in 1832 to $44 in 1837, only to fall back to $17.50 in 1839.â€ (p. 283)
Inflation for the period is estimated to be between 25% and 40%. Historian Larry T. Wimmer estimated that the LDS church held approximately $60,000 in real estate at this time. However, it also needed liquidity to repay outstanding loans. The credit needs of the church, growing population and ongoing land transactions required a local bank.
Apostles Orson Hyde and Oliver Cowdery made several attempts to gain a bank charter from the state of Ohio. All attempts were rejected. Smith attributed the failure to anti-Mormon bias. Ohio Legislator Grandison Newell was a professed antagonist of the church, and persuaded three other legislators to vote against the bank charter. However, this Ohio legislature was much more restrictive in issuing bank charters than the previous legislative body. The legislature refused all applications for bank charters (except one) during 1836 and 1837. They cited problems with land speculation, wildcat banking, and counterfeiting as reasons against bank charters.
The Mormons sought a way around this banking problem. With encouragement and advice of non-Mormon legal counsel, theÂ Kirtland Safety Society Anti-Banking Company (KSSABC) was formed as a quasi-bank. Quasi-banks were relatively common in Ohio, and the Whig party (which later gave way to the Republican Party), encouraged businesses to operate as quasi-banks. A Quasi-bank served many of the purposes of a regular bank.
The Kirtland quasi-bank failure was part of theÂ Panic of 1837.Â â€œOut of eight hundred and fifty banks in the United States, three hundred and forty-three closed entirely, sixty-two failed partially, and the system of State banks received a shock from which it never fully recovered.â€ (seeÂ http://www.publicbookshelf.com/public_html/The_Great_Republic_By_the_Master_Historians_Vol_III/thepanic_ce.html) The Panic was followed by a five-year depression. Banks continued to fail, and unemployment shot up throughout the United States. It sounds strikingly similar to our current economic situation.
Smith was blamed by many in and outside the church for the failure of the quasi-bank, and was accused of enriching LDS leadership. Yet, Smith took out a $1,225 loan from a separate bank in order to keep KSSABC solvent. Smith publicly denied claims that the quasi bank was created for the purpose of greed. Smith risked losing as much or perhaps more than anyone else due to bankâ€™s failure.
Apostasy within the Church
Reflecting on the bank failure, LDS ApostleÂ Heber C. Kimball later said that â€œthere were not twenty persons on earth that would declare that Joseph Smith was a prophet of God.â€ Apostle Brigham Young, was one of the few vocal proponents of Smith. Young left Kirtland for Missouri to avoid the dissidents who were angry with Young and threatened him because of his persistent public defense of Joseph Smith.
Apostle William McClellin was one of the most notable church members who lost faith in church leadership. He was one of the original 12 Apostles, called in 1831, and was excommunicated in 1838, in large part due to this banking scandal mentioned in the manual. Following the collapse of the bank, McClellin declared that he had no confidence in the presidency of the church. These comments led to his excommunication for apostasy on May 11, 1838.
Subsequently, he actively worked against the LDS Church and its leaders. Some believe he may have participated in robbing Joseph Smithâ€™s home and stable while Smith was being held in jail. (Joseph had been jailed on charges relating to the banking failure.) Recently,Â Mormon Times addressed a recently discovered notebook of William McClellin.
McLellin never wavered in his support for the Book of Mormon. He experimented with some other Mormon offshoots, such as RLDS and Strangite branches. He unsuccessfully tried to persuade David Whitmer to lead a movement as well.
Questions and Statements to Consider
Armed with this background, what do you think of the following statement from the manual? â€œLosing confidence in Church leaders, criticizing them, and neglecting any duty required by God lead to apostasy. â€œ
Finally, What do you make of McLellin? Did Joseph put too much trust in him?
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