Chapter XXXI: Mormon Banking

The prophet's attempt at financiering--Mr. Smalling's
letter.

Allusion has been made to the attempts at financiering in which the Mormon prophet and his coadjutors embarked, before leaving Kirtland. The facts connected with this are presented in a clear light by Mr. Smalling, of Kirtland, in a letter addressed to Mr. Lee, of Frankford, Pa. An effort having been made at that village to establish a Mormon society, the Mormon preacher at the close of his lecture invited any one, who chose, to ask questions, or offer remarks. Mr. Lee being present arose, gave his views of the new sect, which were not very complimentary, and among other facts presented before the audience a ten dollar bank note issued by Smith and Rigdon, which he declared was a gross fraud, as they had never obtained a charter for a bank, and did not pretend to redeem their notes. Mr. Lee was quite brow-beaten by the Mormon preacher. To satisfy himself and the public, Mr. Lee wrote to Kirtland, and obtained a letter in reply from Mr. Smalling, from which we make the following extracts:

_Kirtland, Ohio, March 10th, A. D. 1841._

DEAR SIR:

By request, and the duty I owe to my fellow-man, I
consent to answer your letter, and your request as to
Joseph Smith, Jr., and the Safety Society Bank of the
Latter Day Saints, as they call themselves at the
present, or Mormons. The followers of Smith believe him
to be a prophet, and he had a revelation that the
church must move to the Ohio, which they did, selling
their possessions and helping each other as a band of
brothers, and they settled in this place. The Smith
family were then all poor and the most of the church. I
visited them in 1833, they were then building a temple
to the Most High God, who, Smith said, would appear and
make his will known to his servants, and endow them
with power in their last days that they might go and
preach his gospel to all nations, kindred tongues, and
people. For this purpose they wrought almost night and
day, and scoured the branches in the east for money to
enable them to build. The people consecrated freely, as
they supposed for that purpose, for they supposed they
were to be one in the church of Christ, for so Smith
had told them by his revelations, and that they must
consecrate all for the poor in Zion. Thus many did
until they finished the temple, and in the meantime the
building committee built each of them a house, Sidney
Rigdon and Joseph Smith, Jr. By this time the leaders
of the church, Smith, Rigdon, Carter and Cahoon, I may
say, all the heads of the church, got lifted up in
pride, and they imagined that God was about to make
them rich, and that they were to suck the milk of the
Gentiles, as they call those that do not belong to the
church, or do not go hand in hand with them. From this
you can see they have a great desire for riches, and to
obtain them without earning them. About this time they
said that God had told them, Sidney and Joseph, that
they had suffered enough and that they should be rich;
and they informed me, that God told them to buy goods
and so they did, to some thirty thousand dollars, on a
credit of six months, at Cleveland and Buffalo. In the
spring of 1836 this firm was, I believe, Smith, Rigdon
& Co. It included the heads of the church. In the fall,
they formed other companies of their brethren, and sent
to New York as agents for them, Hiram Smith and O.
Cowdery, and they purchased some sixty or seventy
thousand dollars worth, all for the church, and the
most of them not worth a penny, and no financiers. At
this time the first debt became due and not any thing
to pay it with, for they had sold to their poor
brethren, who were strutting about the streets in the
finest broadcloth, and imagining themselves rich, but
could pay nothing: and poverty is the mother of
invention. They then fixed upon a plan to pay the debt.
It was, to have a bank of their own, as none of the
then existing banks would loan to them what they wanted
and the most refused them entirely. They sent to
Philadelphia and got the plates made for their Safety
Society Bank, and got a large quantity of bills ready
for filling and signing; and in the meantime, Smith and
others, collected what specie they could, which
amounted to some six thousand dollars. The paper came
about the first of January, 1837, and they immediately
began to issue their paper and to no small amount: but
their creditors refused to take it. Then Smith invented
another plan, that was to exchange their notes for
other notes that would pay their debts, and for that
purpose he sent the elders out with it to exchange, and
not only the elders, but gave large quantities of it to
others, giving them one half to exchange it, as I am
informed by those that peddled for him. Thus Smith was
instrumental in sending the worthless stuff abroad, and
it soon came in again. There was nothing to redeem it
with, as Smith had used the greater part of their
precious metals. The inhabitants holding their bills
came to inquire into the Safety Society precious
metals: the way that Smith contrived to deceive them
was this: he had some one or two hundred boxes made,
and gathered all the lead and shot that the village had
or that part of it that he controlled, and filled the
boxes with lead, shot, &c., and marked them, one
thousand dollars, 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 two hundred
thousand dollars in specie, and he opened one box and
they saw that it was silver, and they hefted a number
and Smith told them that they contained specie. They
were seemingly satisfied and went away for a few days,
until the elders were sent off in every direction to
pass their paper off: among the elders were Brigam
Young, that went last, with forty thousand dollars;
John F. Boynton, with some twenty thousand dollars;
Luke Johnson, south and east, with an unknown quantity.
I suppose if the money you have was taken of those, it
was to Smith's and their profit; and thus they
continued to pass and sell the worthless stuff until
they sold it at twelve and a half cents on the dollar,
and so eager to put it off at that, that they could not
attend meeting on the Sabbath,--but they signed enough
at that price to buy one section of land in the
Illinois. There was some signed with S. Rigdon,
cashier, and J. Smith, Jr. president, for the purpose,
as it was then said, that if they should be called upon
when they could not well redeem, that they would call
them counterfeit, but they had no occasion to call any
counterfeit, for they never redeemed but a very few
thousand dollars, and there must be now a great many
thousands of their bills out. There was some which
others signed _pro. tem._ that were genuine too, the
name of F. G. Williams, N. K. Whitney, and one
Kingsbury, all those are genuine.

The church have not now nor never had any common
stock,[6] all that has been consecrated, Smith and the
heads of the church have got, and what they get now
they keep, for to show this I send you a revelation
which is as follows:--Revelation given July 9th, 1837,
in far west, Caldwell county, Missouri,--O Lord, show
unto us, thy servants, how much thou requirest of the
properties of thy people for a tything? Answer: Verily,
thus saith the Lord, I require all their surplus
properties to be put into the hands of the bishop of my
church of Zion, for the building of mine house, and for
the laying the foundation of Zion, and for the
priesthood, and for the debts of the presidency of my
church, and this shall be the beginning of the tything
of my people, and after that, those who have been
tythed, shall pay one-tenth of all their interest
annually, and this shall be a standing law unto them
forever, for my holy priesthood saith the Lord: Verily,
I say unto you, it shall come to pass, that all those
who gather unto the land of Zion, shall be tythed of
their surplus properties, and shall observe this law,
or they shall not be found worthy to abide among you;
and behold, I say unto you, if my people observe not
this law to keep it holy, and by this law sanctify the
land of Zion unto me that my statutes and my judgments
may be kept thereon, that it may be most holy; behold:
Verily I say unto you, it shall not be a land of Zion
unto you, and this shall be one example unto all the
states of Zion, even so. Amen. They left here in a
great hurry, as there was many debts against them, for
the principal part that Smith had was borrowed, as also
the heads of the church in general, and they had to
keep the poor brethren lugging their boxes of silks and
fine clothes from place to place, so that they should
not be taken to pay their just debts, and mostly
borrowed money, until they succeeded in getting them
off in the night. They were pursued, but to no effect,
they had a train too numerous, so the people could not
get their pay, and thus they have brought destruction
and misery on a great many respectable families, that
are reduced to distress, while they live in splendour
and all kinds of extravagance. These statements are
well known here, and I presume will not be contradicted
there, unless by some fanatic that has no knowledge of
things as they do exist, or those deeply interested in
the frauds of the saints themselves.

I am yours, &c.,
CYRUS SMALLING, _of Kirtland, Ohio_.

FOOTNOTES:

[6] Instead of the stock being common, it appears the intention of the ringleaders is to monopolize it, and leave their poor dupes at last to shift for themselves.