Question: What was the Kirtland Safety Society "anti-bank"?

Table of Contents

Question: What was the Kirtland Safety Society "anti-bank"?

Given that banking was in its infancy, the Saints were not sophisticated in their understanding of how a bank worked

Even Brigham Young, an astute businessman, was confused. Brigham deposited a note with his mark on it.[1] He was shocked to receive the same note in payment from someone else a few days later! It seems that Brigham thought that the bank kept his note for him, and did not allow it to circulate. He thought of a 'bank' as something more like a safe deposit box—one puts their valuables in, and the bank keeps those same valuables safe, does not lend them out, and returns the exact same items back when asked. Brigham did not understand that a bank keeps a record of money deposited, but uses the funds deposited to make loans and investments, and to pay other creditors.[2]

In principle, the Kirtland Safety Society was to use land and specie to back its notes

The notes would then circulate and function as “money,” which would allow the cash-strapped Kirtland economy to function.

The Kirtland Safety Society was reconfigured as an "anti-banking company" after it failed to receive a charter as a bank

After failing to receive a charter for a bank, the KSS was hastily reconfigured as "a joint stock association, with limited power to issues notes" called the "Kirtland Safety Society Anti-Banking Company."[3] This so-called "quasi-bank" style of operation permitted a commercial enterprise to effectively function as a bank without a bank charter. Other such quasi-banks were already organized in Ohio before the KSS, and even after the bank failures of 1837 (when Joseph Smith and others were prosecuted for operating an illegal bank), Ohio did little to act against other quasi-banks until 1873.[4] Significantly, though, the KSS also had no corporate charter that could be "interpreted loosely" to allow for banking activities, and some authors regard this as the single biggest reason for its failure,[5] although others have argued that the KSS was not unique, since "[t]here were other unauthorized banks in Ohio during this period and some encouragement was received from anti-Democratic newspapers to establish such institutions."[6]

On 2 January 1837, Joseph also obtained a loan of $3,000 from the Bank of Geauga, a clear sign that non-Mormon bankers did not regard Joseph has over-extended or carrying too much debt.[7]

The Kirtland Safety Society was an unwise venture that was probably illegal, though legal counsel was divided on that matter at the time

The intent of Church leaders does not seem to have been to break the law, but to solve a vexing problem which thousands of others also faced. The failure of the bank was not due to mismanagement or a desire to enrich individuals, but due to the relatively fragile nature of the time’s financial infrastructure, and the economic conditions of 1837. The lack of a charter was the KSS's biggest weakness and the most ill-advised decision connected with it. Arguably, even had the bank possessed a charter, the outcome would have been little different, save that the Church leaders would have suffered fewer legal problems and harassment.

The Kirtland Safety Society is an excellent example of why Latter-day Saints do not put their trust in men, but in God. It also demonstrates that the Saints will continue to support fallible men as prophets of God.


  1. Andrew Jenson, Historical Record (Salt Lake City: Andrew Jenson, 1888), 5:433.
  2. See Adams, 475–476.
  3. Partridge, 439
  4. Hill, Rooker, & Wimmer, 433–434.
  5. Adams, 474–475; see also Hill, Rooker, & Wimmer, 434–435.
  6. Hill, Rooker, & Wimmer 435; citing C.C. Huntington, "A History of Banking and Currency in Ohio Before the Civil War," Ohio Historical Quarterly 24 (1915): 366-367.
  7. Adams, 454.