Society Anti-Bank Case Study

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KIRTLAND SAFETY SOCIETY Anti-Bank Organized in 1836 and reorganized January 2, 1837. It’s preamble stated: ...for the promotion of our temporal interests, and for the better management of our different occupations, which consist in agriculture, mechanical arts, and merchandising. By November 1837 the bank had entirely failed and closed. Joseph Smith was fined for running an illegal bank. By late 1836 many recent LDS converts had gathered in Missouri and Kirtland, Ohio. The city of Kirtland experienced a significant population increase, growing from approximately 1,000 people in 1830 to 3,000 in 1836, with a similar increase in surrouonding agricultural areas. The population growth was at least partially responsible for a rapid increase…show more content…
283). Generalized inflation during the period accounted for between 25 and 40 percent of the price increase. Although the LDS church held considerable real estate, estimated at approximately $60,000 in equity by historian Larry T. Wimmer, it also needed liquidity to repay outstanding loans. The credit needs of the church, growing population and ongoing land transactions required a local bank. After some discussion by the leadership of the Chruch, LDS apostle Orson Hyde went to the Ohio legislature to request a bank charter while Oliver Cowdery went to Philadelphia and acquired plates to print notes for the proposed Kirtland Safety Society bank. On January 2, Hyde returned to Kirtland emptyhanded. He had been unable to persuade any legislator to sponsor a bill giving KSS a bank charter. LDS church president and prophet Joseph Smith Jr. attributed the lack of sponsorship to discrimination against the…show more content…
Even though their economy was in jeopardy, it could scarcely have suffered such a devastating blow as that which they were themselves preparing to administer to it. ... The Safety Society proposed no modest project befitting its relative worth and ability to pay. Its organizers launched, instead, a gigantic company capitalized at four million dollars, when the entire capitalization of all the banks in the state of Ohio was only nine and one third million. Such presumption could not have escaped the notice of bankers who would have been led to examine its capital structure more closely. ... according to the articles of incorporation capital stock was to be paid in by subscription but that the amount of payments were left to the discretion of the company managers. Furthermore, total issuance of notes was not prescribed, nor was the relation of notes to capital and assets. The members, to be sure, pledged themselves to redeem the notes and bound themselves individually by their agreement under the penal sum of one hundred thousand dollars. But there was no transfer of property deeds, no power of attorney, no legal pains and penalties. To a banker, the articles fairly shouted: 'this is a wildcat,
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