Nathaniel Wiewora discusses the history of the Kirtand Bank and its reception among 19th-century Evangelical Protestant critics of the Church.
Nathaniel Wiewora, Sins of Christendom: Anti-Mormonism and the Making of Evangelicalism (Urbana: University of Illinois Press, 2024), 69-72
Evangelicals and the Kirtland Safety Society
All of the charges against Mormonism’s economic practices that denigrated the character of Joseph Smith and characterized the ultimate aim of Mormonism as profit-making came together with the rise and fall of the Kirtland anti-banking safety society. The leaders of Mormonism created this bank to address the relatively common problem of lack of currency on the western frontier of the United States, a problem that led Smith to run short of money to pay for the laborers and materials for the large temple being built at Kirtland. He directed some of his subordinates to obtain a charter and raise the necessary capital for their bank. Smith, with his grandiose plans, wanted his hank to be the largest in Ohio. He planned a capitalization of over four million dollars, so he quickly signed up several hundred subscribers. These subscribers had little hard money to commit, so most pledged whatever land they had to the bank.
Many groups and individuals on the frontier in the antebellum period established unsanctioned wildcat banks to provide needed capital for their enterprises. Antebellum Americans often turned to paper bills from unregulated nonbank institutions during periods of economic downturn or when state regulations prohibited legal banks from circulating currency. Known as shinplasters because of the poor quality of the paper money, these bills operated on the fringes of legality and undermined American confidence in paper money. Dismissed in some places, these paper bills often found acceptance in places, such as the western frontier, lacking confidence or quantity of government-sanctioned currency.
The leaders of Mormonism did not wait to see if the state of Ohio would approve their proposed bank charter before beginning operation. They began to print money and offer credit in 1837. Despite the bank’s acting like a legitimate financial institution, the inherent difficulties of starting a bank—lack of knowledge and poor funding—combined with political animus led the Ohio Legislature to deny the Safety Society an official charter. Joseph Smith responded creatively by rebranding the bank. No longer a normal bank, he named it an “anti-banking company.” Smith and the other leaders of the bank collected all of the already-printed currency and affixed the word “anti-“ before the word “banking.” Subscribers evidently did not embrace this attempt at rebranding because depositors immediately began to attempt to exchange their paper notes for hard currency. Within just a few weeks the bank ran out of capital. The value of the existing notes plummeted to zero and the subscribers who had put up the bulk of the initial capital lost their entire investment. After limping along for a few month, Joseph Smith publicly disowned the entire enterprise in the late summer of 1837.
Although the Kirtland bank had a relatively short existence, it took an outsized role in the antebellum evangelical concerns about Mormonism’s economic practices. Evangelicals used the bank to reinforce anti-Mormon charges of financial deception in the name of religion, the contemptible character of Joseph Smith, and the project of counterfeiting currency by the leaders of Mormonism. Joshua Himes pronounced the officers of the bank “guilty of downright swindling.” He believed that the leaders of Mormonism had planned this conspiracy to defraud their followers for years. Their sinister plan, he believed, began with the establishment of a mercantile house to make the mass of Mormon converts indebted to them. Since Kirtland and its environs had little cash, the leaders of Mormonism paid their workers with promissory notes, or they allowed them to purchase goods on credit. When the debts of these workers came due, few had the money to repay them. Himes argued that Smith then economically exploited the workers through the chartering of his bank. This new bank ultimately had the same effect as the commercial house. It enriched Smith, but impoverished the mass of Mormon converts. This did not surprise Himes, who concluded “as regards the pecuniary transactions of the Mormons . . . Smith uses his power for his own benefits.”
Opposition to the Mormon bank and the economic practices of Mormonism bound together evangelicals by giving them the common antagonist of a religious crook, James M’Chesney and David Reese were both prominent New York evangelicals. They disagreed on a number of issues, mostly related to the size and scope of the Benevolent Empire. What these evangelical adversaries could agree on was that the Mormon bank was part of a larger cultural moment of self-aggrandizement. They both believed ignorance had entered the “laudable enterprises” of medicine and politics because of the selfish desire of deceit and knavery. Deceitful individuals in these various professions used advertising and other marketing techniques to prey on weak-willed individuals in order to built up their own net work and power. M’Chesney and Reese believed the Mormon bank acted in the same fashion, making explicit comparisons between these similarly deceptive movements. Just as politicians used every trick and tool of deceit possible to “gain the ascendency over their fellows by every artifice in their power,” the leaders of the Kirtland bank acquired wealth and prestige through the same means.
Assisted largely by the reportage of E. G. Lee, antebellum evangelicals came to understand the actions of the Mormon bank in the context of the antebellum practice of counterfeiting currency. Lee was a Philadelphian who evidently challenged several Mormon elders at a meeting in his hometown. While his practice motivations and personal background are unknown, the text of Lee’s response reveals how he characterized Mormonism as a financial fraud for locally specific and religious reasons. Self-identified as a Protestant Christian of some tripe, but apparently not a member of any organized religious group, Lee viewed contemporary Mormonism as “dishonest swindling.” To demonstrate the disgraceful conduct of Smith and the other leaders of Mormonism, Lee reprinted a letter by Cyrus Smalling, an excommunicated member of the Mormon Church. In this account, Smalling charged the leaders of Mormonism with opening up a bank to pay off a large number of debts, acquiring a large quantity of bills for “filing and signing.” When people began to grow suspicious of the bank notes issued at Kirtland, Smalling commented that Smith used his church to get out of his financial difficulties. Mormon missionaries exchanged Kirtland Safety Society notes in places unaware of their true value at the same time they attempted to attract new converts throughout the nation. Smalling said that people caught on to this subterfuge, and Smith ad to search for other solutions. He furthered his deception, according to Smalling, by having 100-200 boxes made. Smith filled these boxes with all the lead and scrap metal he could gather in Kirtland, and then wrote $1,000 on each box. When people arrived to investigate the financial stability of the bank, Smith would show them a bank vault filled with over $200,000. Smalling concluded that if Smith would put all of this work into fashioning these Potemkin lockboxes, and the leaders would manipulate anyone or anything for financial gain. Reprinted by Lee, this account circulated widely in evangelical circles.
Antebellum evangelicals deployed a diverse and sometimes contradictory set of charges against Mormon economic practices. The claims that Joseph Smith was an indolent money digger who used the black arts to locate treasure defined Mormonism’s spiritual economy as pre-modern. By hunting for treasure, Smith participated in a materialistic faith that responded, in part, to the anxieties created by the emerging market economy. The economic order in antebellum American had become more complex, impersonal, and interdependent. Participants in the supernatural economy, like Joseph Smith, recognized that their economic livelihood rested on distant factors far beyond their control. Recovering treasure promised quick wealth and a sense of power. Existing alongside and sometimes uneasily with this premodern characterization was a more modern critique that claimed Joseph Smith was too good at the market. Evangelicals saw Smith’s accumulation of wealth driving the creation and operation of Mormonism. His counterfeiting, exploitation, profiteering, and speculation allowed him to exploit the burgeoning national market economy for his own gain.