Smith's Ohio Business Enterprises

When Rigdon returned to Ohio with Smith in January, 1831, it

seems to have been his intention to make Kirtland the permanent

headquarters of the new church. He had written to his people from

Palmyra, "Be it known to you, brethren, that you are dwelling on

your eternal inheritance." When Cowdery and his associates

arrived in Ohio on their first trip, they announced as the

boundaries of the Promised Land the township of Kirtland on the

east and the Pacific Ocean on the west. Within two months of his

arrival at Kirtland Smith gave out a "revelation" (Sec. 45), in

which the Lord commanded the elders to go forth into the western

countries and buildup churches, and they were told of a City of

Refuge for the church, to be called the New Jerusalem. No

definite location of this city was given, and the faithful were

warned to "keep these things from going abroad unto the world."

Another "revelation" of the same month (Sec. 48) announced that

it was necessary for all to remain for the present in their

places of abode, and directed those who had lands "to impart to

the eastern brethren," and the others to buy lands, and all to

save money" to purchase lands for an inheritance, even the city."

The reports of those who first went to Missouri induced Smith and

Rigdon, before they made their first trip to that state, to

announce that the Saints would pass one more winter in Ohio. But

when they had visited the Missouri frontier and realized its

distance from even the Ohio border line, and the actual

privations to which settlers there must submit, their zeal

weakened, and they declared, "It will be many years before we

come here, for the Lord has a great work for us to do in Ohio."

The building of the Temple at Kirtland, and the investments in

lots and in business enterprises there showed that a permanent

settlement in Ohio was then decided on.

Smith's first business enterprise for the church in Ohio was a

general store which he opened in Hiram. This establishment has

been described as "a poorly furnished country store where

commerce looks starvation in the face."* The difficulty of

combining the positions of prophet, head of the church, and

retail merchant was naturally great. The result of the

combination has been graphically pictured by no less an authority

than Brigham Young. In a discourse in Salt Lake City, explaining

why the church did not maintain a store there, Young said:--

* Salt Lake Herald, November 17, 1877.

"You that have lived in Nauvoo, in Missouri, in Kirtland, Ohio,

can you assign a reason why Joseph could not keep a store and be

a merchant? Let me just give you a few reasons; and there are men

here who know just how matters went in those days. Joseph goes to

New York and buys $20,000 worth of goods, comes into Kirtland and

commences to trade. In comes one of the brethren. Brother Joseph,

let me have a frock pattern for my wife: What if Joseph says,

'No, I cannot without money.' The consequence would be, 'He is no

Prophet,' says James. Pretty soon Thomas walks in. 'Brother

Joseph, will you trust me for a pair of boots?' 'No, I cannot let

them go without money.' 'Well,' says Thomas, 'Brother Joseph is

no Prophet; I have found THAT out and I am glad of it.' After a

while in comes Bill and Sister Susan. Says Bill, 'Brother Joseph,

I want a shawl. I have not got any money, but I wish you to trust

me a week or a fortnight.' Well, Brother Joseph thinks the others

have gone and apostatized, and he don't know but these goods will

make the whole church do the same, so he lets Bill have a shawl.

Bill walks of with it and meets a brother. 'Well,' says he, 'what

do you think of Brother Joseph?' 'O, he is a first rate man, and

I fully believe he is a Prophet. He has trusted me with this

shawl.' Richard says, 'I think I will go down and see if he won't

trust me some.' In walks Richard. Brother Joseph, I want to trade

about $20.' 'Well,'says Joseph, 'these goods will make the people

apostatize, so over they go; they are of less value than the

people.' Richard gets his goods. Another comes in the same way to

make a trade of $25, and so it goes. Joseph was a first rate

fellow with them all the time, provided he never would ask them

to pay him. And so you may trace it down through the history of

this people."*

* Journal of Discourses, Vol. 1, p. 215.

If this analysis of the flock which Smith gathered in Ohio, and

which formed the nucleus of the settlements in Missouri, was not

permanently recorded in an official church record, its

authenticity would be vigorously assailed.

Later enterprises at Kirtland, undertaken under the auspices of

the church, included a steam sawmill and a tannery, both of which

were losing concerns. But the speculation to which later Mormon

authorities attributed the principal financial disasters of the

church at Kirtland was the purchase of land and its sale as town

lots.* The craze for land speculation in those days was not

confined, however, to the Mormons. That was the period when the

purchase of public lands of the United States seemed likely to

reach no limit. These sales, which amounted to $2,300,000 in

1830, and to $4,800,000 in 1834, lumped to $14,757,600 in 1835,

and to $24,877,179 in 1836. The government deposits (then made in

the state banks) increased from $10,000,000 on January 1, 1835,

to $41,500,000 on June 1, 1836, the increase coming from receipts

from land sales. This led to that bank expansion which was

measured by the growth of bank capital in this country from

$61,000,000 to $200,000,000 between 1830 and 1834, with a further

advance to $251,000,000.

* "Real estate rose from 100 to 800 per cent and in many cases

more. Men who were not thought worth $50 or $100 became

purchasers of thousands. Notes (sometimes cash), deeds and

mortgages passed and repassed, till all, or nearly all, supposed

they had become wealthy, or at least had acquired a

competence."--Messenger and Advocate, June, 1837.

The Mormon leaders and their people were peculiarly liable to be

led into disaster when sharing in this speculators' fever. They

were, however, quick to take advantage of the spirit of the

times. The Zion of Missouri lost its attractiveness to them, and

on February 23, 1833, the Presidency decided to purchase land at

Kirtland, and to establish there on a permanent Stake of Zion.

The land purchases of the church began at once, and we find a

record of one Council meeting, on March 23, 1833, at which it was

decided to buy three farms costing respectively $4000, $2100, and

$5000. Kirtland was laid out (on paper) with 32 streets, cutting

one another at right angles, each four rods wide. This provided

for 225 blocks of 20 lots each. Twenty-nine of the streets were

named after Mormons. Joseph and his family appear many times in

the list of conveyors of these lots. The original map of the

city, as described in Smith's autobiography, provided for 24

public buildings temples, schools, etc.; no lot to contain more

than one house, and that not to be nearer than 25 feet from the

street, with a prohibition against erecting a stable on a house


* Millennial Star, Vol. XIV, pp. 438-439.

Of course this Mormon capital must have a grand church edifice,

to meet Smith's views, and he called a council to decide about

the character of the new meeting-house. A few of the speakers

favored a modest frame building, but a majority thought a log one

better suited to their means. Joseph rebuked the latter, asking,

"Shall we, brethren, build a house for our God of logs?" and he

straightway led them to the corner of a wheat field, where the

trench for the foundation was at once begun.* No greater

exhibition of business folly could have been given than the

undertaking of the costly building then planned on so slender a

financial foundation.

* Mother Smith's "Biographical Sketches" p. 213.

The corner-stone was laid on July 23, 1833, and the Temple was

not dedicated until March 27, 1836. Mormon devotion certainly

showed itself while this work was going on. Every male member was

expected to give oneseventh of his time to the building without

pay, and those who worked on it at day's wages had, in most

instances, no other income, and often lived on nothing but corn

meal. The women, as their share, knit and wove garments for the


The Temple, which is of stone covered with a cement stucco (it is

still in use), measures 60 by 80 feet on the ground, is 123 feet

in height to the top of the spire, and contains two stories and

an attic.

The cost of this Temple was $40,000, and, notwithstanding the

sacrifices made by the Saints in assisting its construction, and

the schemes of the church officers to secure funds, a debt of

from $15,000 to $20,000 remained upon it. That the church was

financially embarrassed at the very beginning of the work is

shown by a letter addressed to the brethren in Zion, Missouri, by

Smith, Rigdon, and Williams, dated June 25, 1833, in which they

said, "Say to Brother Gilbert that we have no power to assist him

in a pecuniary point, as we know not the hour when we shall be

sued for debts which we have contracted ourselves in New York."*

* Millennial Star, Vol. XIV, p. 450.

To understand the business crash and scandals which compelled

Smith and his associates to flee from Ohio, it is necessary to

explain the business system adopted by the church under them.

This system began with a rule about the consecration of property.

As originally published in the Evening and Morning Star, and in

chapter xliv of the "Book of Commandments," this rule declared,

"Thou shalt consecrate all thy properties, that which thou hast,

unto me, with a covenant and a deed which cannot be broken," with

a provision that the Bishop, after he had received such an

irrevocable deed, should appoint every man a steward over so much

of his property as would be sufficient for himself and family. In

the later edition of the "Doctrine and Covenants" this was

changed to read, "And behold, thou wilt remember the poor, and

consecrate thy properties for their support," etc.

By a "revelation" given out while the heads of the church were in

Jackson County, Missouri, in April, 1832 (Sec. 82), a sort of

firm was appointed, including Smith, Rigdon, Cowdery, Harris, and

N. K. Whitney, "to manage the affairs of the poor, and all things

pertaining to the bishopric," both in Ohio and Missouri. This

firm thus assumed control of the property which "revelation" had

placed in the hands of the Bishop. This arrangement was known as

The Order of Enoch. Next came a "revelation" dated April 23,

1834. (Sec. 104), by which the properties of the Order were

divided, Rigdon getting the place in which he was living in

Kirtland, and the tannery; Harris a lot, with a command to

"devote his monies for the proclaiming of my words"; Cowdery and

Williams, the printing-office, with some extra lots to Cowdery;

and Smith, the lot designed for the Temple, and "the inheritance

on which his father resides." The building of the Temple having

brought the Mormon leaders into debt, this "revelation," was

designed to help them out, and it contained these further

directions, in the voice of the Lord, be it remembered: "The

covenants being broken through transgression, by covetousness and

feigned words, therefore you are dissolved as a United Order with

your brethren, that you are not bound only up to this hour unto

them, only on this wise, as I said, by loan as shall be agreed by

this Order in council, as your circumstances will admit, and the

voice of the council direct.....

"And again verily I say unto you, concerning your debts, behold

it is my will that you should pay all your debts; and it is my

will that you should humble yourselves before me, and obtain this

blessing by your diligence and humility and the prayer of faith;

and inasmuch as you are diligent and humble, and exercise the

prayer of faith, behold, I will soften the hearts of those to

whom you are in debt, until I shall send means unto you for your

deliverance.... I give you a promise that you shall be delivered

this once out of your bondage; inasmuch as you obtained a chance

to loan money by hundreds, or thousands even until you shall loan

enough [meaning borrow] to deliver yourselves from bondage, it is

your privilege; and pledge the properties which I have put into

your hands this once.... The master will not suffer his house to

be broken up. Even so. Amen."

It does not appear that the Mormon leaders took advantage of this

authorization to borrow money on Kirtland real estate, if they

could; but in 1835 they set up several mercantile establishments,

finding firms in Cleveland, Buffalo, and farther east who would

take their notes on six months' time." A great part of the goods

of these houses, "says William Harris, "went to pay the workmen

on the Temple, and many were sold on credit, so that when the

notes became due the houses were not able to meet them."

Smith's autobiography relates part of one story of an effort of

his to secure money at this trying time, the complete details of

which have been since supplied. He simply says that on July 25,

1836, in company with his brother Hyrum, Sidney Rigdon, and

Oliver Cowdery, he started on a trip which brought them to Salem,

Massachusetts, where "we hired a house and occupied the same

during the month, teaching the people from house to house."* The

Mormon of to-day, in reading his "Doctrine and Covenants," finds

Section 111 very perplexing. No place of its reception is given,

but it goes on to say:--

* Millennial Star, Vol. XV, p. 281.

"I, the Lord your God, am not displeased with your coming this

journey, notwithstanding your follies; I have much treasure in

this city for you, for the benefit of Zion;...and it shall come

to pass in due time, that I will give this city into your hands,

that you shall have power over it, insomuch that they shall not

discover your secret parts; and its wealth pertaining to gold and

silver shall be yours. Concern not yourself about your debts, for

I will give you power to pay them.... And inquire diligently

concerning the more ancient inhabitants and founders of this

city; for there are more treasures than one for you in this


"This city" was Salem, Massachusetts, and the "revelation" was

put forth to brace up the spirits of Smith's fellow-travellers. A

Mormon named Burgess had gone to Kirtland with a story about a

large amount of money that was buried in the cellar of a house in

Salem which had belonged to a widow, and the location of which he

alone knew. Smith credited this report, and looked to the

treasure to assist him in his financial difficulties, and he took

the persons named with him on the trip. But when they got there

Burgess said that time had so changed the appearance of the

houses that he could not be sure which was the widow's, and he

cleared out. Smith then hired a house which he thought might be

the right one,--it proved not to be,--and it was when his

associates were--becoming discouraged that the ex-money-digger

uttered the words quoted, to strengthen their courage. "We speak

of these things with regret," says Ebenezer Robinson, who

believed in the prophet's divine calling to the last.*

* The Return, July, 1889.

Brought face to face with apparent financial disaster, the next

step taken to prevent this was the establishment of a bank. Smith

told of a "revelation" concerning a bank "which would swallow up

all other banks." An application for a charter was made to the

Ohio legislature, but it was refused. The law of Ohio at that

time provided that "all notes and bills, bonds and other

securities [of an unchartered bank] shall be held and taken in

all courts as absolutely void." This, however, did not deter a

man of Smith's audacity, and soon came the announcement of the

organization of the "Kirtland Safety Society Bank," with an

alleged capital of $4,000,000. The articles of agreement had been

drawn up on November 2, 1836, and Oliver Cowdery had been sent to

Philadelphia to get the plates for the notes at the same time

that Orson Hyde set out to the state capital to secure a charter.

Cowdery took no chances of failure, and he came back not only

with a plate, but with $200,000 in printed bills. To avoid the

inconvenience of having no charter, the members of the Safety

Society met on January 2, 1837, and reorganized under the name of

the "Kirtland Society Anti-banking Company," and, in the hope of

placing the bills within the law (or at least beyond its reach),

the word "Bank" was changed with a stamp so that it read

"Anti-BANK-ing Co.," as in the facsimile here presented.

W. Harris thus describes the banking scheme:--

"Subscribers for stock were allowed to pay the amount of their

subscriptions in town lots at five or six times their real value;

others paid in personal property at a high valuation, and some

were paid in cash. When the notes were first issued they were

current in the vicinity, and Smith took advantage of their credit

to pay off with them the debts he and his brethren had contracted

in the neighborhood for land, etc. The Eastern creditors,

however, refused to take them. This led to the expedient of

exchanging them for the notes of other banks.

Accordingly, the Elders were sent into the country to barter off

Kirtland money, which they did with great zeal, and continued the

operation until the notes were not worth twelve and a half cents

to the dollar."*

* "Mormonism Portrayed," p. 31

Just how much of this currency was issued the records do not

show. Hall says that Brigham Young, who had joined the flock at

Kirtland, disposed of $10,000 worth of it in the States, and that

Smith and other church officers reaped a rich harvest with it in

Canada, explaining, "The credit of the bank here was good, even

high."* Kidder quotes a gentleman living near Kirtland who said

that the cash capital paid in was only about $5000, and that they

succeeded in floating from $50,000 to $100,000. Ann Eliza,

Brigham's "wife No. 19," says that her father invested everything

he had but his house and shop in the bank, and lost it all.

* "Abominations of Mormonism Exposed" (1852), pp. 19, 20.

Cyrus Smalling, one of the Seventy at Kirtland, wrote an account

of Kirtland banking operations under date of March 10, 1841, in

which he said that Smith and his associates collected about $6000

in specie, and that when people in the neighborhood went to the

bank to inquire about its specie reserve, "Smith had some one or

two hundred boxes made, and gathered all the lead and shot the

village had, or that part of it that he controlled, and filled

the boxes with lead, shot, etc., and marked them $1000 each.

Then, when they went to examine the vault, he had one box on a

table partly filled for them to see; and when they proceeded to

the vault, Smith told them that the church had $200,000 in

specie; and he opened one box and they saw that it was silver;

and they were seemingly satisfied, and went away for a few days

until the elders were packed off in every direction to pass their

paper money."*

* "Mormons; or Knavery Exposed" (1841).

Smith believed in specie payments to his bank, whatever might be

his intentions as regards the redemption of his notes, for, in

the Messenger and Advocate (pp. 441-443), following the by-laws

of the Anti-banking Company, was printed a statement signed by

him, saying:--

"We want the brethren from abroad to call on us and take stock in

the Safety Society, and we would remind them of the sayings of

the Prophet Isaiah contained in the 60th chapter, and more

particularly in the 9th and 17th verses which are as follows:--

"Surely the isles shall wait for me, and the ships of Tarshish

first, to bring thy sons from far, their silver and their gold

with them, unto the name of the Lord thy God.

"For brass I will bring gold, and for iron I will bring silver,


The Messenger and Advocate (edited by W. A. Cowdery), of July,

1837, contained a long article on the bank and its troubles,

pointing out, first, that the bank was opened without a charter,

being "considered a kind of joint stock association," and that

"the private property of the stockholders was holden in

proportion to the amount of their subscriptions for the

redemption of the paper," and also that its notes were absolutely

void under the state law. The editor goes on to say:--

"Previously to the commencement of discounting by the bank, large

debts had been contracted for merchandise in New York and other

cities, and large contracts entered into for real estate in this

and adjoining towns; some of them had fallen due and must be met,

or incur forfeitures of large sums. These causes, we are bound to

believe, operated to induce the officers of the bank to let out

larger sums than their better judgments dictated, which almost

invariably fell into or passed through the hands of those who

sought our ruin.... Hundreds who were enemies either came or sent

their agents and demanded specie, till the officers thought best

to refuse payment."

This subtle explanation of the suspension of specie payments is

followed with a discussion of monopolies, etc., leading up to a

statement of the obligations of the Mormons in regard to the

discredited bank-notes, most of which were in circulation

elsewhere. To the question; "Shall we unite as one man, say it is

good, and make it good by taking it on a par with gold?" he

replies, "No," explaining that, owing to the fewness of the

church members as compared with the world at large, "it must be

confined in its circulation and par value to the limits of our

own society." To the question, "Shall we then take it at its

marked price for our property," he again replies, "No,"

explaining that their enemies had received the paper at a

discount, and that, to receive it at par from them, would "give

them voluntarily and with one eye open just that advantage over

us to oppress, degrade and depress us." This combined financial

and spiritual adviser closes his article by urging the brethren

to set apart a portion of their time to the service of God, and a

portion to "the study of the science of our government and the

news of the day."

A card which appeared in the Messenger and Advocate of August,

1837, signed by Smith, warned "the brethren and friends of the

church to beware of speculators, renegades, and gamblers who are

duping the unwary and unsuspecting by palming upon them those

bills, which are of no worth here."

The actual test of the bank's soundness had come when a request

was made for the redemption of the notes. The notes seem to have

been accepted freely in Pittsburg, Pennsylvania, where it was

taken for granted that a cashier and president who professed to

be prophets of the Lord would not give countenance to bank paper

of doubtful value.* When stories about the concern reached the

Pittsburg banks, they sent an agent to Kirtland with a package of

the notes for redemption. Rigdon loudly asserted the stability of

the institution; but when a request for coin was repeated, it was

promptly refused by him on the ground that the bills were a

circulating medium" for the accommodation of the public, "and

that to call any of them in would defeat their object.**

* "Rocky Mountain Saints," p. 71.

** "Early Days of Mormonism," p. 163.

Other creditors of the Mormons were now becoming active in their

demands. For failing to meet a note given to the bank at

Painesville, Smith, Rigdon, and N. K. Whitney were put under

$8000 bonds. Smith, Rigdon, and Cowdery were called into court as

indorsers of paper for one of the Mormon firms, and judgment was

given against them. To satisfy a firm of New York merchants the

heads of the church gave a note for $4500 secured by a mortgage

on their interest in the new Temple and its contents.* The

Egyptian mummies were especially excepted from this mortgage.

Mother Smith describes how these relics were saved by "various

stratagems" under an execution of $50 issued against the prophet.

* Ibid., pp. 159-160.

The scheme of calling the bank corporation an "anti-banking"

society did not save the officers from prosecution under the

state law. Informers against violators of the banking law

received in Ohio a share of the fine imposed, and this led to the

filing of an information against Rigdon and Smith in March, 1837,

by one S. D. Rounds, in the Geauga County Court, charging them

with violating the law, and demanding a penalty of $1000 They

were at once arrested and held in bail, and were convicted the

following October. They appealed on the ground that the

institution was an association and not a bank; but this plea was

never ruled upon by the court, as the bank suspended payments and

closed its doors in November, 1837, and, before the appeal could

be argued, Smith and Rigdon had fled from the state to Missouri.

Smith's First Visits To Missouri Founding The City And The Temple Smith's Picture Of Himself As Autocrat facebooktwittergoogle_plusredditpinterestlinkedinmail