CHAPTER 5.

1837.

KIRTLAND BANK-A PRIVATE ENTERPRISE-ARTICLES OF AGREEMENT-PURPOSE NOT FRAUDULENT-SPIRIT OF SPECULATION— JOSEPH SMITH RESIGNS-HE PUBLISHES A WARNING-KELLEY'S LETTER.

THE year 1837 commenced in Kirtland by a movement upon the part of some of its citizens to establish a general banking business. Though this was never a Kirtland Bank. church measure, some of the leading men of the church engaged in the enterprise. The fate of this enterprise was an unfortunate one. The financial stringency of 1837, under which many older and better established institutions went down, combined with the opposition urged by the enemies of the church, and probably with some mismanage. ment, insured its failure. Stories were put afloat that the officers of the bank had stolen the funds. No institution of the kind ever failed without such reports being circulated. In this case where there was so much religious opposition to the stockholders and officers, these reports would, of course, be more likely to obtain. We therefore beg the indulgence of the reader while we give some items regarding A private enterprise. this institution, which do not properly come under the head of church history, because of its having been an individual or private enterprise.

A meeting of the Kirtland Safety Society was held at Kirtland, Ohio, on January 2, 1837, of which the following are the minutes:

"Minutes of a meeting of the Members of the Kirtland Safety Society,' held on the 2d day of January, 1837.

"At a special meeting of the Kirtland Safety Society,' two thirds of the members being present, S. Rigdon was called to the chair, and W. Parrish chosen secretary.

Articles of agreement.

"The house was called to order, and the object of the meeting explained by the chairman; which was: First, to annul the old constitution, which was adopted by the Society, on the 2d day of November, 1836; which was, on motion, by the unanimous voice of the meeting, annulled. Second, to adopt articles of agreement, by which the Kirtland Safety Society' are to be governed.

"After much discussion and investigation, the following Preamble and Articles of Agreement were adopted by the unanimous voice of the meeting:

"We, the undersigned subscribers, for the promotion of our temporal interests, and for the better management of our different occupations, which consist in agriculture, mechanical arts, and merchandising, do hereby form ourselves into a firm or company for the before mentioned objects, by the name of the Kirtland Safety Society Anti-Banking Company,' and for the proper management of said firm, we individually and jointly enter into and adopt the following articles of agreement:

"Art. 1. The capital stock of said society or firm shall not be less than four millions of dollars; to be divided into shares of fifty dollars each; and may be increased to any amount, at the discretion of the managers.

"Art. 2. The management of said company shall be under the superintendence of thirty-two managers, to be chosen annually, by, and from among, the members of the same; each member being entitled to one vote for each share, which he, she, or they, may hold in said company; and said votes may be given by proxy, or in propria persona.

"Art. 3. It shall be the duty of said managers, when chosen, to elect from their number, a Treasurer and Secretary. It shall be the further duty of said managers to meet in the upper room of the office of said company, on the first Mondays of November and May, of each year, at nine o'clock, a. m., to inspect the books of said company, and transact such other business as may be deemed necessary.

"Art. 4. It shall be the duty of said managers to choose from among their number, seven men, who shall meet in the upper room of said office on Tuesday of each week, at four

o'clock, p. m., to inquire into and assist in all matters pertaining to said company.

"Art. 5. Each manager shall receive from the company one dollar per day for his services when called together at the annual and semiannual meetings. The Treasurer and Secretary and the seven, the committee of the managers, shall receive a compensation for their services as they shall be agreed by the managers at their semiannual meetings.

"Art. 6. The first election of managers, as set forth in the second article, shall take place at the meeting of the members to adopt this agreement, who shall hold their offices until the first Monday of November, 1837, unless removed by death or misdemeanor, and until others are duly elected. Every annual election of managers shall take place on the first Monday of November in each year. It shall be the duty of the Treasurer and Secretary of said company to receive the votes of the members by ballot, and declare the election.

"Art. 7. The books of the company shall be always open for the inspection of the members.

"Art. 8. It shall be the duty of the managers of the company to declare a dividend once in six months; which dividend shall be apportioned among the members, according to the installments by them paid in.

"Art. 9. All persons subscribing stock in said firm shall pay their first installment at the time of subscribing, and other installments from time to time, as shall be required by the managers.

"Art. 10. The managers shall give thirty days' notice in some public paper, printed in this county, previous to an installment being paid in. All subscribers residing out of the State, shall be required to pay in half the amount of their subscriptions at the time of subscribing; and the remainder, or such part thereof, as shall be required at any time, by the managers, after thirty days' notice.

"Art. 11. The Treasurer shall be empowered to call special meetings of the managers whenever he shall deem it necessary, separate and aside from the annual and semiannual meetings.

"Art. 12. Two thirds of the managers shall form a quorum to act at the semiannual meetings, and any number of the seven, the committee of the managers, with the Treasurer and Secretary, or either of them. may form a quorum to transact business at the weekly meetings, and in case none of the seven are present at the weekly meetings, the Treasurer and Secretary must transact the business.

"Art. 13. The managers shall have power to enact such by-laws as they may deem necessary from time to time, provided they do not infringe upon these articles of agreement.

"Art. 14. All notes given by said society, shall be signed by the Treasurer and Secretary thereof, and we, the individual members of said firm, hereby hold ourselves bound for the redemption of all such notes.

"Art. 15. The notes given for the benefit of said society shall be given to the Treasurer in the following form: 'Ninety days after date, we jointly, and severally, promise to pay A. B. or order, -dollars and- -cents, value received.' A record of which shall be made in the books at the time, of the amount, and by whom given, and when due, and deposited with the files and papers of said society.

"Art. 16. Any article in this agreement may be altered at any time, annulled, added unto, or expunged by the vote of two thirds of the members of said society, except the fourteenth article; that shall remain unaltered during the existence of said company. For the true and faithful fulfillment of the above covenant and agreement, we individually bind ourselves to each other, under the penal sum of one hundred thousand dollars. In witness whereof we have hereunto set our hands and seals, the day and date first above written." -Millennial Star, vol. 15, pp. 843, 844.

Purpose not

A close inspection of Article 14 of the foregoing should convince anyone that the purpose of this company was not fraudulent, for they, the members of the firm, fraudulent held themselves individually responsible for the redemption of every note signed by the Treasurer and Secretary of the society. Men do not usually involve all they have in an effort to defraud.

Again: Article 16 binds them to each other severally and

individually in the sum of one hundred thousand dollars for the true and faithful fulfillment of the covenant and agreement set forth in these articles.

Whatever may have been the subsequent action of individuals, this institution was manifestly founded in good faith, and with no design of fraud.

Spirit of

As early as May, 1837, there was a spirit of speculation in Kirtland, affecting, among others, some of the leading men of the church; and it is possible that under speculat on this influence some of them, including some of those connected with the bank, did things of questionable propriety and honesty. This spirit, with its legitimate tendencies, was condemned by Joseph Smith, and by others of high standing. Of this Joseph wrote:

"At this time the spirit of speculation in lands and property of all kinds, which was so prevalent throughout the whole nation, was taking deep root in the church. As the fruits of this spirit, evil surmisings, fault finding, disunion, dissension, and apostasy followed in quick succession, and it seemed as though all the powers of earth and hell were combining their influence in an especial manner to overthrow the church at once, and make a final end. Other banking institutions refused the Kirtland Safety Society's' notes. The enemy abroad and apostates in our midst united in their schemes, flour and provisions were turned towards other markets, and many became disaffected towards me as though I were the sole cause of those very evils I was most strenuously striving against, and which were actually brought upon us by the brethren not giving heed to my counsel.

"No quorum in the church was entirely exempt from the influence of those false spirits who were striving against me for the mastery; even some of the Twelve were so far lost to their high and responsible calling as to begin to take sides, secretly, with the enemy."- Millennial Star, vol. 16, page 11.

On the date of July 7, 1837, Joseph writes:

"Some time previous to this I resigned my office in the 'Kirtland Safety Society,' disposed of my interest therein, and withdrew from the institution; being fully aware, after