From Fanny Alger to the Kirtland Bank

During their July-September 1836 east coast trip following Emma’s discovery of Joseph and Alger together, Joseph and three of the church’s most important leaders, Oliver Cowdery, Sidney Rigdon, and his brother Hyrum Smith, visited New York City. In the nation’s financial capital, they found, according to Cowdery, that “There is money yet in Wall Street, and ‘Draper, Underwood,’ and others, ready to help incorporated bodies to plates and dyes, to make more.” Cowdery’s statement that these New York outfitters would help “incorporated bodies” to “make more” money was quite literal. Banks at this time could print their own notes—currency—and Smith and the accompanying church leaders had substantial debt that they needed currency to pay. The church’s top leaders would soon open the Kirtland Bank, with their “first recorded activity concerning starting a bank” being this stop in New York to negotiate with Understood, Bald, Spencer, and Huffy, the firm that would print their bank notes. Cowdery’s initial inquiries in New York about how to print notes for a church-sponsored bank led, about six weeks after their return, to Cowdery acquiring the needed plate sand dyes for printing this scrip. On January 2, 1837, the church leaders inaugurated their bank.

From the start trouble plagued the Kirtland Safety Society Banking Company, which was unluckily chartered three months before the tremendous run on US banks known as the Panic of 1837. Poor management and a run on redemptions organized by dissenters led the bank to temporary closure by January 23, just three weeks after opening, but the bank remained falteringly in operation through spring and into summer. Smith and Rigdon continued to urge the saints to support the society in April, but the national crisis triggered by New York banks suspending specie payments on May 10 shuttered all attempts to keep it alive. By July 7, Smith and Rigdon had resigned as officers of the society, and the society’s reins were taken by Frederick G. Williams and Warren Parrish. Church members suffered financial losses from the bank’s failure amounting to perhaps $40,000, sparking considerable ecclesiastical dissent.

Meanwhile, anger over the previous year’s Alger scandal had not disappeared: the situation had not only preceded the bank crisis, but arguably helped cause it. Had the discovery of Smith and Alger’s relationship given him strong incentive to leave Kirtland for Salem when he did—stopping at New York City along the way—the saints might have avoided the misfortune of establishing an undercapitalized bank on the eve of one of the greatest banking crises in the nation’s history. Doubts about Smith’s integrity raised by the Alger rumors further aggravated these troubles, undermining trust in him at precisely the moment when trust was most needed to encourage bank patrons to invest and exercise patience in redeeming their notes.

The major role played by the Alger relationship and its intertwining with banking issues, is indicted by Benjamin F. Johnson’s recollection of Warren Parrish’s attempt to convert him to the dissenter movement. Parrish, who spoke against Smith in the temple in June 1837 and took over Smith’s role as bank cashier in July, also led an armed takeover of the temple by dissenters and the establishment of a reformist Church of Christ later in the year. Benjamin Johnson described Parrish attempting to recruit him with reports that “himself and Oliver Cowdery did know that Joseph had Fannie Alger as wife, for they were spied upon and found together.” And, as discussed below, Parrish also purveyed rumor that the Alger relationship was adulterous, leading Apostle David W. Patten to visit Parrish to hear the rumor for himself. It thus seemed to Johnson that “the suspicion or knowledge” of Smith’s relationship with Alger “was one of the causes of apostasy and disruption at Kirtland.”

When criticism of Smith’s private conduct and the failure of the Kirtland bank spilled over into actual threats of violence in April 1837, Smith again left Kirtland with Rigdon to go into hiding. Emma, naturally, was concerned for Joseph’s safety; yet this concern mingled with another. With her husband away from her at an unknown place and in unknown company, the previous year’s family scandal weighed on her mind. On April 25, almost exactly nine months after finding her husband alone with Alger, Emma closed her letter to him, “I pray that God will keep you in purity and safety till we all meet again.”