RS-Lesson 27

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Church Cirriculum

The official church guide can be seen at the Official LDS Church site.

We encourage you to make sure you are familiar with the official church curriculum as the first step in your lesson preparation, as this is the material recommended by the General Authorities of the church.

Supplementary material here is not intended to substitute for lesson preparation, but hopefully it will enhance your preparations for Sunday School.

From the Manual

“In the weeks before and after the completion of the Kirtland Temple in the spring of 1836, the Saints experienced a time of harmony and a rich outpouring of the gifts of the Spirit. But the Prophet Joseph Smith warned the Saints that if they did not continue to live righteously, their joy and unity would not last…..”

“As that year wore on, a spirit of apostasy grew among some of the Saints in Kirtland. Some members became proud, greedy, and disobedient to the commandments. Some blamed Church leaders for economic problems caused by the failure of a Kirtland financial institution established by Church members. This failure occurred in 1837, the same year that a banking panic swept across the United States, compounding the Saints’ economic problems. As many as two or three hundred members fell away from the Church in Kirtland, sometimes joining with those who opposed the Church to torment and even physically threaten the Saints. Some apostates openly claimed that the Prophet was fallen and tried to have other men put in his place.”

Supplementary material

When Joseph Smith encouraged the saints to move to Kirtland, the city experienced a significant population increase, tripling from 1000 people to 3000 people between 1830 and 1836. Surrounding agricultural areas experienced similar increases in population. The population growth was at least partially responsible for a rapid increase in land prices between 1832 and 1837. Daniel H. Ludlow, in “Church History, Selections From the Encyclopedia of Mormonism” tells us “The average price per acre of land sold in Kirtland rose from approximately $7 in 1832 to $44 in 1837, only to fall back to $17.50 in 1839.” (p. 283)

Inflation for the period is estimated to be between 25% and 40%. Historian Larry T. Wimmer estimated that the LDS church held approximately $60,000 in real estate at this time. However, it also needed liquidity to repay outstanding loans. The credit needs of the church, growing population and ongoing land transactions required a local bank.

Apostles Orson Hyde and Oliver Cowdery made several attempts to gain a bank charter from the state of Ohio. All attempts were rejected. Smith attributed the failure to anti-Mormon bias. Ohio Legislator Grandison Newell was a professed antagonist of the church, and persuaded three other legislators to vote against the bank charter. However, this Ohio legislature was much more restrictive in issuing bank charters than the previous legislative body. The legislature refused all applications for bank charters (except one) during 1836 and 1837. They cited problems with land speculation, wildcat banking, and counterfeiting as reasons against bank charters.

The Mormons sought a way around this banking problem. With encouragement and advice of non-Mormon legal counsel, the Kirtland Safety Society Anti-Banking Company (KSSABC) was formed as a quasi-bank. Quasi-banks were relatively common in Ohio, and the Whig party (which later gave way to the Republican Party), encouraged businesses to operate as quasi-banks. A Quasi-bank served many of the purposes of a regular bank.

The Kirtland quasi-bank failure was part of the Panic of 1837. "Out of eight hundred and fifty banks in the United States, three hundred and forty-three closed entirely, sixty-two failed partially, and the system of State banks received a shock from which it never fully recovered." [1] The Panic was followed by a five-year depression. Banks continued to fail, and unemployment shot up throughout the United States. It sounds strikingly similar to our current economic situation.

Smith was blamed by many in and outside the church for the failure of the quasi-bank, and was accused of enriching LDS leadership. Yet, Smith took out a $1,225 loan from a separate bank in order to keep KSSABC solvent. Smith publicly denied claims that the quasi bank was created for the purpose of greed. Smith risked losing as much or perhaps more than anyone else due to bank’s failure.

Apostasy within the Church

Reflecting on the bank failure, LDS Apostle Heber C. Kimball later said that "there were not twenty persons on earth that would declare that Joseph Smith was a prophet of God." Apostle Brigham Young, was one of the few vocal proponents of Smith. Young left Kirtland for Missouri to avoid the dissidents who were angry with Young and threatened him because of his persistent public defense of Joseph Smith.

Apostle William McLellin was one of the most notable church members who lost faith in church leadership. He was one of the original 12 Apostles, called in 1831, and was excommunicated in 1838, in large part due to this banking scandal mentioned in the manual. Following the collapse of the bank, McClellin declared that he had no confidence in the presidency of the church. These comments led to his excommunication for apostasy on May 11, 1838.

At this point, he actively worked against the LDS Church and its leaders. Some believe he may have participated in robbing Joseph Smith’s home and stable while Smith was being held in jail. (Joseph had been jailed on charges relating to the banking failure.) Recently, Mormon Times addressed a recently discovered notebook of William McClellin.

McLellin never wavered in his support for the Book of Mormon. He experimented with some other Mormon offshoots, such as RLDS and Strangite branches. He unsuccessfully tried to persuade David Whitmer to lead a movement as well.

McLellin wasn’t the only one to fall away. All of the Three Witnesses to the BoM were excommunicated at the time of the bank failure: Martin Harris, David Whitmer, and Oliver Cowdery who held the title of Assistant President of the Church.

Additionally, 5 apostles were excommunicated over the bank: McLellin, Lyman Johhnson, Luke Johnson, John Boynton, and Thomas Marsh.

According to Wikipedia, George A Smith (November 15, 1864) attributes the bank failure to Warren Parrish (a former scribe of Joseph Smith.) “Warren Parrish was the teller of the bank, and a number of other men who apostatized were officers. They took out of its vault, unknown to the President or cashier, a hundred thousand dollars, and sent their agents around among the brethren to purchase their farms, wagons, cattle, horses and every thing they could get hold of. The brethren would gather up this money and put it into the bank, and those traitors would steal it and send it out to buy again, and they continued to do so until the plot was discovered and payment stopped.”

Parrish and those supporting him soon claimed ownership of the Kirtland Temple. Eliza R. Snow relates that Parrish and a group of others came into the temple during Sunday services “armed with pistols and bowie-knives and seated themselves together in the Aaronic pulpits, on the east end of the temple, while father Smith and others, as usual, occupied those of the Melchizedek priesthood on the west.”[14] Parrish’s group interrupted the services and, according to Snow “a fearful scene ensued—the apostate speaker becoming so clamorous that Father Smith called for the police to take that man out of the house, when Parrish, John Boynton, and others, drew their pistols and bowie-knives, and rushed down from the stand into the congregation; John Boynton saying he would blow out the brains of the first man who dared to lay hands on him.” Police arrived and ejected the troublemakers, after which the services continued.[15]

Warren Parrish, Martin Harris, Luke Johnson and John Boynton took control of the Kirtland Temple and they and their High Council excommunicated Joseph Smith and Sidney Rigdon, who fled to Far West.

According to Apostle John Boynton, Joseph Smith did say the bank “was instituted by the will & revelations of God, & he had been told that it would never fail.” President Smith replied that “if it had been declared…that unless the institution was conducted on righteous principles it would not stand.”

One other observation. This anti-bank and the anti-Nephi-Lehies share an interesting similarity in the use of “anti”.

Questions and Statements to Consider

  • Armed with this background, what do you think of the following statement from the manual? “Losing confidence in Church leaders, criticizing them, and neglecting any duty required by God lead to apostasy. “
  • What do you make of McLellin? Did Joseph put too much trust in him?