Kirtland Bank Failure

I was invited to be a guest contributer over at Mormon Matters.  In 1838, there was a crisis in the church.  A bank failure in Kirtland caused many church members to question the leadership ability of Joseph Smith.  Lesson 27 deals with the crisis in very general terms, but I’ve learned much more.  Five apostles were excommunicated, the Three Whitnesses were excommunicated, and some breakaway members actually excommunicated Joseph Smith and Sidney Rigdon.  It was a very tumultious period for the church.  The full post can be found here.  Anyway, how would you have reacted in those circumstances?

18 comments on “Kirtland Bank Failure

  1. Heretic: I would love to read your post, but I am having the same problem getting into it at Mormon Matters. I guess it is a problem with the browser I use, but I am not too tech-savvy, and cannot work my way around the problem.

  2. I added my post to the priesthood lesson at http://ldssundayschool.org so you can see it there. Of course, you won’t see the comments, but it only had about 10 or so.

    I really like Firefox, and have noticed that Explorer has more problems.

  3. Mormon heretic-

    I cannot get the post on Mormon matters to work either and all the other posts come up so I think it is a problem with the post not our browser.

    Where did the information come from about the excommunications you are referring to? Is it a reliable source?

    For me, unless I was constantly seeking the Lord’s guidance in relation to Joseph Smith it would have been very easy to walk away from him. I am the type to ask the Lord about everything I struggle with more than anyone else so I would have relied on what I felt He was saying to me. It would have been much too confusing otherwise to listen to all the different voices. That’s how I believe I would have reacted to the circumstances at the time.

  4. Jen and Teacher,

    I just tried to pull up my post on Mormon Matters in Explorer, and it does not pull up for me either. I think it is a browser problem. I’ll contact someone at MM and see if anything can be done. Were you able to pull it up on LDS Sunday School?

    Jen, this is a pretty well documented event. Much of the stuff is well-footnoted in Wikipedia, and more information can be found in both “Rough Stone Rolling”, and “An Insider’s View of Mormon Origins.” Of course, anti-mormons love to use the bank failure and claim that Joseph was part of a great coverup and fraud. The LDS priesthood manual mentions the bank failure, but when you read it, you have no idea how significant of a problem this was. While the bank certainly was mismanaged, there were some nationwide problems with land speculation which contributed to the problem as well.

    I don’t believe these national bank problems were ever really solved until after the Great Depression of the 1930’s. (I believe that some of the deregulation of banks in the Clinton administration are the source of the problems we have today. Of course, Bush didn’t bother to offer any regulations of the banks either, but that’s the topic for another post…)

    If you read RSR, you’ll find that the US was in quite a few Depressions. I didn’t know about the depression of 1787, (soon after US independence), or all the other depressions.

    As I said on MM, Certainly, Joseph was a much different leader than our current leaders. We don’t trust Pres Monson with running a bank. If the bank was mismanaged (as it was in this case), I can’t imagine that it would be inappropriate to “lose confidence”, and “criticize” the leaders of the bank, even if they happen to be church leaders. We certainly are criticizing all the bankers at Bear Stearns, Citibank, etc for their mismanagement of mortgage loans.

    Certainly, if I had lost my life savings, I’d be pretty upset. On the other hand, there were some economic problems that contributed to the banking problems. It’s easy for me to be understanding of those problems 150 years later, but if I had lost money, I’d have definitely lost confidence and criticized, and I don’t view that as inappropriate in this situation.

  5. Mormon heretic-

    My kids have been told at school that they cannot use Wikipedia as a source because it is unreliable, that is why I asked about the reliability of the sources.

    I will read the post tomorrow (on the other website you mentioned) and then comment further. Thanks!

  6. Jen,

    Yes, I agree that Wikipedia is not always reliable. However, I think it can be a good place to start to do some research. Certain articles have no footnotes and should be read with caution. Others, like the ones I have referenced, have many footnotes, and I think are more reliable.

    Most of this information is found in early pioneer journals, and seems to be corroborated by other independent historians as well, so I feel pretty confident in the information I have presented. As I said it is found in RSR and Insider’s as well.

    Also, I found out that that Explorer has some problems with other posts, on Mormon Matters as well. My contact at MM is not a tech expert, but he uses Mozilla without problems. That is another free browser that people may want to try. (Firefox is free to download as well.)

  7. Fwiw, I love Firefox – especially since it’s free. I’d never go back to Windows Explorer.

    Back to the regularly scheduled program. *grin*

  8. I think the cirucumstances surrounding the bank failure would have been very difficult to swallow. It is obvious how many of the men reacted and I am curious to know how women reacted to the situation. I wonder if they would have been more or less likely to leave the church, etc. I really think I would have been praying a lot back then about the leadership of the church and what to do about it, but if I was married I am sure that my husband’s decisions would have great influence over what I could and could not do.

  9. I downloaded FireFox and was then able to access your post on MM. Looks like a winner. Thanks!

  10. Yes, Jen, I agree with your sentiments.

    Today in church, I was looking at D&C 118:4-6, and noticed it talked about replacing the apostles who had fallen. The new apostles were John Taylor, John E. Page, Wilford Woodruff, and Willard Richards. Of course this is significant given the fact that the original apostles had been called just 3 years earlier.

    It must have been a very trying time. David Whitmer, is quoted as saying, “if you believe that God spake to us three witnesses by his own voice, then I tell you that in June, 1838, God spake to me again by his own voice from the heavens and told me to ‘separate myself from among the Latter Day Saints, for as they sought to do unto me, so it should be done unto them.'” (This is found in Dialogue on page 176.)

    This had to be an extraordinarily difficult time. While Martin Harris and Oliver Cowdery eventually rejoined the LDS church, Whitmer never did.

  11. MH – what are the best sources you have found to get up to speed on the Kirtland anti-bank? It seems that there are a few good articles by Dale W. Adams but that there isn’t a whole lot out there on the matter. I am just now rereading Rough Stone Rolling and I found the whole bank business fascinating and would like to learn more about it. Any suggestions?

  12. Sanford,

    I think Wikipedia gets an unfair bad rap. I think it’s a wonderful starting place. I know several people in academia who will start with Wikipedia, and then branch out to the references. Of course, they’ll never quote Wikipedia, rightfully so, but I think it is a wonderful starting place.

    If you go to the Wikipedia reference for the Kirtland Safety Society, you’ll see plenty of references to BYU Studies. Let me list them below.

    * Adams, Dale W. Chartering the Kirtland Bank. BYU Studies 1983, Vol. 23, No. 4, pp. 467-482.

    * Bitton, Davis. The Waning of Mormon Kirtland. BYU Studies 1972, Vol. 12, No. 4, p.455.

    * Fielding, Robert Kent. The Growth of the Mormon Church in Kirtland, Ohio. Ph.D. Diss., Indiana University, 1957.

    * Hill, Marvin S., C. Keith Rooker, and Larry T. Wimmer, The Kirtland Economy Revisited: A Market Critique of Sectarian Economics. BYU Studies 1977, Vol. 17, No. 4, p.389.

    * Ludlow, Daniel H., Editor. Church History, Selections From the Encyclopedia of Mormonism. Deseret Book Co., Salt Lake City, UT, 1992. ISBN 0-87579-924-8.

    * Partridge, Scott H. The Failure of the Kirtland Safety Society. BYU Studies 1972, Vol. 12, No. 4, p.437.

    * Peck, Reed (September 18, 1839), Reed Peck manuscript, Quincy Adams City, Illinois, http://en.wikisource.org/w/index.php?title=Reed_Peck_manuscript&oldid=391716 .

    * Sampson, D. Paul and Larry T. Wimmer. The Kirtland Safety Society: The Stock Ledger Book and the Bank Failure. BYU Studies 1972, Vol. 12, No. 4, p.427.

    * Tanner, Jerald and Sandra. Mormonism, Shadow or Reality by ]], Chapter 35. Utah Lighthouse Ministry 1964, ISBN 99930-74-43-8.

    I will add that the Tanners are excellent historians, but many consider them anti-mormons. So use that information as you will. During the Mark Hoffman forgeries, it was the Tanners who first believed the Hoffman documents were fakes, because they didn’t match the history. So, while you may not agree with the Tanners conclusions on various topics, that doesn’t mean their facts are necessarily wrong. I know that many BYU apologists don’t dispute facts with Tanners, but rather they dispute conclusions.

    Another reference is An Insider’s View of Mormon Origins by Grant Palmer. To be fair, Grant was disfellowshipped for writing the book. He is a former institute teacher, and still believes the church is true, but his conclusions are more critical of Joseph Smith than say Richard Bushman. His book is also used as a textbook for the Community of Christ (RLDS.)

    So, if you’re looking for balanced truth, I think there are plenty of sources. It should be remembered that the bank failure wasn’t the only reason for members falling away. Joseph was quite deceptive in his revelations regarding polygamy. Oliver Cowdery was never told, and found out about it through rumors of Joseph committing adultery. I think Oliver’s disagreement over polygamy and the bank failure were both major factors in Oliver’s excommunication.

    Even in the D&C 132, read the chapter summary on plural marriage. It says the revelation was officially recorded in 1843, but parts were known as early as 1831. There were some real nasty rumors about adultery during this time of 1838, so we shouldn’t think that the bank failure was the only reason church members became disillusioned.

    Additionally, the slavery issue was a big issue in Missouri. Joseph was considered an abolitionist, and Missouri was a slave state, so there were some definite tensions. I think that these slave issues contributed directly to Joseph’s murder. This might explain why Brigham Young chose a different path regarding the slave issue.

    We think our times of Prop 8 times are tough, but I think this early church period was much tougher, and much more divisive.

  13. […] “I do not believe John the Baptist ever ordained Joseph and Oliver–(See my post on the Kirtland Bank Crisis for more info on these […]

  14. Tara,

    I thought I’d ask this question over here. So if you lost your life savings in the Kirtland Bank collapse, would you have criticized Joseph and Sidney for their mismanagement? Would this criticism lead you to apostasy, as the church manual seems to imply?

  15. That’s a difficult question to answer accurately. Having the advantage of hindsight, and not actually having lived and suffered through the event myself, I honestly don’t know how I would’ve reacted. I hope that I would be understanding and forgiving, but I honestly don’t know. I think if my testimony were strong enough and if my faith were worth more to me than any earthly treasure, I would be able to do that. As far as criticism leading to apostasy, I believe that it can. But I don’t think that it would necessarily lead to that in all cases. I’ve been guilty of being critical (not vocally mind you) of local leaders, but it hasn’t led to my apostasy. I think there are levels of criticism, and you can get away with some. But if you start calling leaders uninspired and letting your criticisms eat away at you, then it can definitely lead to apostasy.

  16. Yes, Tara, I think it is a very difficult question to answer. We don’t think twice about throwing the Enron, Citibank, or Fanny Mae executives under the bus. Joseph deserves some blame here, but it is evident that the national banking crisis also bears some blame.

    I know Brigham Young was true to the prophet, and I am curious if Heber C Kimball’s statement, “there were not twenty persons on earth that would declare that Joseph Smith was a prophet of God” was an exaggeration. I don’t think it was too far from the truth. Certainly it would have been difficult to mentally separate Joseph the banker from Joseph the prophet.

  17. […] Pingback: Kirtland Bank Failure — Mormon Heretic […]

  18. […] of Mormonism’s original Quorum of Twelve.  Following the completion of the Kirtland Temple, the Kirtland Bank failed (as did many other banks nationwide), and Joseph Smith was charged with mismanagement of the bank […]

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