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
lot.*

* 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
workmen.

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
city."

"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,
etc."

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.


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