Welcome to Gospel Tangents.
I’m your host Rick Bennett.
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Here’s our final episode on the Kirtland Banking Scandal.
Given the reasons cited in our previous episode
Grandison Newell trying to create a run on the bank,
as well as John Johnson selling lands that
was serving as collateral for the bank,
why was Joseph blamed?
Are there other reasons that we need to talk about?
Mark:  Well Joseph Smith, as he withdraws
from the bank back in June 9th, 1837,
he says I’m not going to be involved anymore.
Whether guilt or compassion for everybody else
or whatever, he begins to take on the debts
of all these individuals who have been losing money
under his—
people who have gotten loans
to operate businesses, and probably primarily
it was the church,
he’s calling in all those debts
and trying to settle the books.
You look at Newell K. Whitney’s Day Book
from that time period,
it becomes a bank ledger in and of itself.
People owe Whitney money and Joseph Smith
is taking on their debts,
and there are quite a few individuals.
There is piping for a steam engine pipe
for the sawmill that the church is using.
They used for Joseph Smith’s temple.
Joseph Smith takes on the debts for all of that sawmill
construction and I believe that the church still
owns that sawmill so it was a church debt,
but whoever had taken that on, Joseph
Smith is now taking that on himself
and he’s gathering all these other debts
as well so that he becomes responsible for that.
I think that principally his interest is in settling
those debts, making sure that it all gets settled,
and he has specific individuals who were assigned
to make sure all of those payments are made
and that everybody is paid off in this process,
but it also puts him up to be the fall guy
when all the debts,
when everything collapses,
he is the one that’s owing all of this,
and so I don’t know if he wants to protect
everybody from all of the subsequent lawsuits.
There probably is that motivating factor,
but I think it’s also to make it easier for him
to settle all of these debts that are
incurred for church activities and other things
that they have been doing as part of this process.
While he’s doing that, Grandison Newell is taking
out legal action against Joseph Smith for operating
this institution without a charter, because banks
needed a charter even though all these other organizations
are operating without them, if you were to be a bank
you had to have a charter.
There’s public sympathy for these institutions.
Somebody else tried to do a similar thing
and charge a community that had a bank note operation.
They were trying to try them for operating without a bank charter.
The jury didn’t even leave the jury box,
They delivered a non-guilty verdict.
They looked at all the evidence and said
he’s not guilty because they considered that even though he’d done that,
that was just kind of normal practice everybody
needed to do to make finances work because the
federal government wasn’t issuing paper money.
It was all private institutions that were doing this at that time.
Now did that exonerate Joseph for operating
the institution without a bank charter?
No because he ended up being tried
and convicted for that.
But did Joseph have honorable intentions through the whole thing?
Absolutely.  He tried to make every effort
to pay off all the debts that were incurred
in the process and even the very last night of his life,
while he was laying on the floor in Carthage Jail,
he’s still dreaming about those Kirtland troubles
and he’d been weeks before that sending letters
out to people and warning people not to
take Kirtland bank notes.  They weren’t good anymore.
It haunted him for a long time afterward.
But he was tried.  He was convicted.
Grandison Newell was the one that led the
whole thing and as the one promoting it,
he got paid half of the fine,
so he got paid $500,
and the other $500 was supposed to go to the government.
The judge listed all this and the prosecuting attorney
were both Grandison’s business partners and so it was hard
for them to come up with any other decisions than one
in favor of Grandison Newell.
Newell later double-dipped and he got paid the other half
as well, so he got twice as much money as he
was legally owed for this whole affair so he came out doing very well
in the whole thing, made a lot of money.
GT:  What was Joseph convicted of then?
Mark:  He was convicted of operating a bank without a charter.
GT:  Oh, ok.
Mark:  Was it justified?  I don’t think so.
I think you could make a case that the
conviction was not legally valid but I’m not
an attorney and I’m not really in a position to judge that,
and so I’m hoping that the attorneys will
all get together and look at that carefully
and decide among them whether he deserved
the conviction or not, but it happened.
GT:  Well I’ll have to ask Richard Turley.  Isn’t he an attorney?
Mark:  He is.  He can tell you.
GT chuckling:  Well I’ll talk to him.
Well, I really appreciate you taking your time
to talk about this with us.
It’s a fascinating discussion and
I know that I need to let you go.
Once again, thank you for being here on Gospel Tangents!
We’ll talk to you later.
Mark:  You’re welcome.
I hope you enjoyed our conversation
about the Kirtland Banking Crisis and
and I’d like to thank Mark Staker for spending so much
time with us talking about the Kirtland era.
In our next episode we’ll talk to Dr. Richard Bennett,
BYU professor in Church History and Religion,
and we’ll ask about the Kirtland Temple.
It was more open to the general public than our modern LDS temples.
Dick:  There was no chapel in Kirtland.
There was no chapel in Nauvoo.
We were building temples long before
we built chapels, so yes it was an assembly place.
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