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Constitution of the Kirtland Safety Society Bank, 2 November 1836

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Constitution of the Kirtland Safety Society Bank, 2 November 1836

Source Note

Constitution of the Kirtland Safety Society Bank, , Geauga Co., OH, 2 Nov. 1836. Featured version printed [ca. Dec. 1836] as an extra of Latter Day Saints’ Messenger and Advocate, Dec. 1836; endorsed by unidentified scribe; one page; CHL.
Single leaf, measuring 12⅝ × 6¾ inches (32 × 17 cm); text area measures 9½ × 4¼ inches (24 × 11 cm). The copy used for transcription has undergone archival preservation work to fix a tear at the document’s top. On the verso, two ink notations in unidentified handwriting read, “Nov 2 1836 | Minutes of meeting | of Kirtland Safety | Society” and “Kirtland | Bank”. The provenance of this document is unknown; it is assumed that the document has remained in continuous institutional custody since its creation.

Historical Introduction

On 2 November 1836, JS, , and other stockholders of the voted on and approved a constitution to organize and govern the new financial institution. Though established primarily for the , the bank was not exclusively for church members’ use; JS and others likely saw the creation of a bank as a way to improve the local economy and raise money for destitute Saints. At this time, church leaders were also seeking ways to pay off their considerable debt, which resulted from the construction of the in , Ohio; efforts to redeem in ; purchases of land in Kirtland and Missouri; and the recent printing of the Doctrine and Covenants and other publications.
The establishment of a bank was a natural development for a growing community like . Community banks sought profits by charging interest on the loans they made, discounting the notes of other banks, and making investments. In addition, banks stimulated local economies in two important ways: they provided the credit and liquidity necessary to allow a larger portion of a community to be involved in economic endeavors, such as funding land improvements or new companies, and they facilitated opportunities to exchange goods and services.
JS and others had decided to establish a bank by late September or early October. Around that time, purchasing agents—likely and —left for to buy goods and negotiate credit for at least two -area mercantile firms. On 11 October the agents purchased goods from New York City merchant , and for payment they gave Eaton a promissory note that was payable in six months at the “Kirtland Safety Society Bank,” confirming that church leaders had developed plans for such an institution before the agents left. While in New York, the agents purchased safes—which were probably intended to hold the Kirtland Safety Society’s books and specie—from merchant Jesse Delano. It may also have been during this trip that Cowdery arranged to have printing plates for Kirtland Safety Society banknotes made by the printing and engraving firm of Underwood, Spencer, Bald & Hufty.
The Kirtland Safety Society began collecting subscriptions to purchase shares of the bank’s stock in mid-October, and these stock subscriptions accounted for most of the society’s operating capital. The capital stock for the society was set at $4 million and divided into 80,000 shares valued at $50 each. The first subscription recorded in the society’s stock ledger, dated 18 October 1836, was for 2,000 shares of stock for , who paid $630 on his subscription by 22 October. He continued to pay the bank for his stock, and sometime later he subscribed for an additional 1,000 shares, thus reaching the maximum number of 3,000 shares a single stockholder could hold. JS also subscribed for 3,000 shares and made an initial payment of $1,342.69 on 22 October. By 1 November, thirty-six subscribers had paid more than $5,000 on their 27,105 shares of stock. An additional twenty-four individuals paid for stock on 2 November, possibly in connection with the stockholder meeting held that same day, increasing the bank’s collections on stock to nearly $7,000. These payments were recorded in the society’s stock ledger as being made in “cash,” which in nineteenth-century banking terminology could mean either specie or banknotes. The majority of stockholders in the bank subscribed for their shares of stock between October and December 1836.
The constitution of the Kirtland Safety Society Bank, featured here, is the only extant record of the 2 November 1836 stockholders’ meeting. Presented to the gathering by and unanimously approved by participants, the constitution established rules to govern the bank, its officers, and its stockholders preparatory to receiving a bank charter from the state legislature. The authors of the constitution are unknown, but it was a group endeavor, likely headed by JS and . This constitution governed the Kirtland Safety Society until 2 January 1837, when the officers and stockholders reorganized the structure of their institution in the absence of a bank charter.
In accordance with the guidelines established in the constitution, the stockholders held an election for officers and directors. This likely took place during the 2 November meeting or shortly thereafter. Thirty-two directors were elected from the stockholders present, and from this group a committee of six was appointed to act collectively for the entire group of directors. The choice of directors for a local bank was in many ways as significant as the choice of officers, since the directors usually included prominent individuals able to inspire confidence in the bank and use their political connections on the bank’s behalf. The thirty-two directors then elected the bank officers. was elected president and JS was elected cashier.
The society’s constitution was printed as an extra to the Latter Day Saints’ Messenger and Advocate between the November and December issues of the newspaper. The extra was a single broadside dated December 1836 but possibly printed in November 1836. The fact that the constitution was printed as an extra suggests that the society’s officers and stockholders were unwilling to wait for it to be included in the normal issue of the paper and wanted to have copies available soon after the November meeting.

Footnotes

  1. [1]

    JS’s history later recorded that “on the 2d of November the Brethren at Kirtland drew up certain articles of Agreement, preparatory to the organization of a Banking Institution.” The majority of stockholders in the Kirtland Safety Society were members of the church living in Kirtland, though a small number of Painesville, Ohio, residents also invested, as did a few individuals who were not church members. Most stockholders were men, though six women had subscribed for stock by November 1836. Most subscribers had modest means and paid only a small portion of the price for the shares they were purchasing; the constitution required stockholders to pay additional installments when called upon to do so. (JS History, vol. B-1, 750; Kirtland Safety Society, Stock Ledger, 1836–1837, in Collection of Manuscripts about Mormons, Chicago History Museum.)

  2. [2]

    See Historical Introduction to Revelation, 6 Aug. 1836 [D&C 111]; see also Angell, Autobiography, 13; Johnson, Reminiscences and Journals, 25; Joseph Young, Salt Lake City, to Lewis Harvey, 16–18 Nov. 1880, CHL; Kennedy, Early Days of Mormonism, 111–112; and Olney, Absurdities of Mormonism Portrayed, 4.

    Angell, Truman O. Autobiography, 1884. CHL. MS 12334. Also available in Archie Leon Brown and Charlene L. Hathaway, 141 Years of Mormon Heritage: Rawsons, Browns, Angells—Pioneers (Oakland, CA: By the authors, 1973), 119–135.

    Johnson, Joel Hills. Reminiscences and Journals, 1835–1882. 3 vols. Joel Hills Johnson, Papers, 1835–1882. CHL. MS 1546, fds. 1–3.

    Young, Joseph. Letter, Salt Lake City, Utah Territory, to Lewis Harvey, 16–18 Nov. 1880. CHL. MS 2304.

    Kennedy, James H. Early Days of Mormonism: Palmyra, Kirtland, and Nauvoo. New York: Charles Scribner’s Sons, 1888.

    Olney, Oliver H. The Absurdities of Mormonism Portrayed. Hancock Co., IL: By the author, 1843.

  3. [3]

    Bodenhorn, History of Banking, 17–20, 46–47.

    Bodenhorn, Howard. A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building. New York: Cambridge University Press, 2000.

  4. [4]

    Both Ira Ames and Cyrus Smalling suggest in reminiscent accounts that Cowdery and Hyrum Smith made a trip to New York City to purchase goods for the Kirtland mercantile firms of Rigdon, Smith & Cowdery and Cahoon, Carter & Co., though neither provided a specific date for the journey. (Ames, Autobiography and Journal, [12]; Cyrus Smalling, Letter, Kirtland, OH, 10 Mar. 1841, in “Banking and Financiering at Kirtland,” 668–670.)

    Ames, Ira. Autobiography and Journal, 1858. CHL. MS 6055.

    “Banking and Financiering at Kirtland.” Magazine of Western History 11, no. 6 (Apr. 1890): 668–670.

  5. [5]

    Winthrop Eaton, Bill of Goods, 11 Oct. 1836, JS Office Papers, CHL.

  6. [6]

    Jesse Delano, Bill, 15 Oct. 1836, JS Office Papers, CHL.

  7. [7]

    Underwood, Spencer, Bald & Hufty had offices in New York City and Philadelphia. A 14 November letter to the editor of the newspaper Aurora noted that the Latter-day Saints had ordered plates in New York City. The plates were apparently picked up in Philadelphia. JS’s history implies that Cowdery was given the task of acquiring banknotes after the society was formally organized on 2 November 1836. (“Mormonism in Ohio,” Aurora [New Lisbon, OH], 19 Jan. 1837, [3]; “Bank at Kirtland,” Cleveland Weekly Advertiser, 29 Dec. 1836, [1]; Kirtland Safety Society Notes, 4 Jan.–9 Mar. 1837; JS History, vol. B-1, 750.)

    Aurora. New Lisbon, OH. 1835–1837.

    Cleveland Weekly Advertiser. Cleveland. 1836–1840.

  8. [8]

    A complete list of initial stockholders was never created, but a partial list, including later subscribers, was printed in the March 1837 issue of the Messenger and Advocate. The extant stock ledger for the Kirtland Safety Society serves as the main source for identifying those involved with the society. However, the ledger may be incomplete; some individuals named as subscribers at the 2 January meeting do not appear in the book and some stockholders’ names appear to have been erased or written over. (“Minutes of a Meeting,” LDS Messenger and Advocate, Mar. 1837, 3:476–477; Kirtland Safety Society, Stock Ledger, 1836–1837, in Collection of Manuscripts about Mormons, Chicago History Museum.)

    Latter Day Saints’ Messenger and Advocate. Kirtland, OH. Oct. 1834–Sept. 1837.

  9. [9]

    Kirtland Safety Society, Stock Ledger, 1–2, 13–14; see also Young, Account Book, [2].

    Young, Brigham. Account Book, 1836–1837, 1841–1846. CHL.

  10. [10]

    Kirtland Safety Society, Stock Ledger, 1836–1837, in Collection of Manuscripts about Mormons, Chicago History Museum.

  11. [11]

    James H. Coffin, Progressive Exercises in Book Keeping (Greenfield, MA: A. Phelps; Boston: Crocker and Brewster, 1836). Only one stock ledger is extant for the Kirtland Safety Society, containing the accounts for 205 stockholders from October 1836 to July 1837. It records the amount of stock purchased and payments made on the cost of that stock but no other financial transactions of the institution. Some individuals borrowed money against their stock subscriptions, a common practice in this period. (Kirtland Safety Society, Stock Ledger, 1836–1837, in Collection of Manuscripts about Mormons, Chicago History Museum.)

    Coffin, James H. Progressive Exercises in Book Keeping, by Single and Double Entry. Greenfield, MA: A. Phelps, 1836.

  12. [12]

    The language and terminology used in the constitution suggest that those involved in drafting it may have sought help from someone with legal or banking experience, though they may have also drawn on their own knowledge or consulted templates for legal forms that were available at the time. Handbooks such as Every Man His Own Lawyer and The Business Man’s Assistant contained legal forms that clerks or others could copy for their own use. There was little standardization of banking practices in the United States in this period, and regulation of banking was managed at a state level. The regulations outlined in the constitution appear to have been consistent with other banking operations of the day. In January 1837, state senator Alfred Kelley introduced a banking reform bill that outlined articles to regulate and standardize banking practices in Ohio. The constitution for the Kirtland Safety Society uses the same terminology and many of the same practices and bylaws as those found in Kelley’s bill, with a few exceptions in the number of directors appointed and the amount of the society’s capital stock. Kelley’s bill was not passed by the Ohio legislature until 1845. (Paraclete Potter, Every Man His Own Lawyer [Poughkeepsie, NY: By the author, 1836]; I. R. Butts, Business Man’s Assistant [Boston: By the author, 1847]; “A Bill for the Regulation of Banks within This State,” Ohio State Journal and Columbus Gazette, 13 Jan. 1837, [2]; An Act to Incorporate the State Bank of Ohio and Other Banking Companies [24 Feb. 1845], Swan, Statutes of the State of Ohio, 80–103.)

    Potter, Paraclete. Every Man His Own Lawyer; or, The Clerk and Magistrate’s Assistance. Poughkeepsie, NY: By the author, 1836.

    Butts, I. R. The Business Man’s Assistant, Part I. Containing Useful Forms of Legal Instruments: Enlarged by the Addition of Forms. . . . Boston: By the author, 1847.

    Ohio State Journal and Columbus Gazette. Columbus. 1825–1837.

    Swan, Joseph R., comp. Statutes of the State of Ohio, of a General Nature, in Force January 1st, 1854: With References to Prior Repealed Laws. Cincinnati: H. W. Derby, 1854.

  13. [13]

    JS History, vol. B-1, 750.

  14. [14]

    See Historical Introduction to Articles of Agreement for the Kirtland Safety Society Anti-Banking Company, 2 Jan. 1837.

  15. [15]

    The members of the committee of directors were not named in the constitution, but an agreement signed by JS, Sidney Rigdon, Frederick G. Williams, David Whitmer, Oliver Cowdery, and Reynolds Cahoon in January 1837 identifies these men as managers of the society and may indicate that they were members of the committee of directors. (Agreement with David Cartter, 14 Jan. 1837.)

  16. [16]

    Scheiber, “Commercial Bank of Lake Erie,” 51.

    Scheiber, Harry N. “The Commercial Bank of Lake Erie, 1831–1843.” Business History Review 40, no. 1 (Spring 1966): 47–65.

  17. [17]

    See Historical Introduction to Kirtland Safety Society Notes, 4 Jan.–9 Mar. 1837; Transcript of Proceedings, 24 Oct. 1837, Rounds v. JS [Geauga Co. C.P. 1837], Geauga Co., OH, Court of Common Pleas, Record Book U, pp. 362–364; and Transcript of Proceedings, 24 Oct. 1837, Rounds Qui Tam v. Rigdon [Geauga Co. C.P. 1837], Geauga Co., OH, Court of Common Pleas, Record Book U, pp. 359–362, Geauga County Archives and Records Center, Chardon, OH.

    Geauga Co., OH, Court of Common Pleas, Record Book U. Geauga County Archives and Records Center, Chardon, OH.

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Minutes of a meeting of the Stockholders of the ; held on the 2nd day of November, A. D. 1836. When the following preamble and articles were read three times by , and unanimously adopted.
We the Stockholders of the Kirtland Safety Society Bank, for the more perfect government and regulation of the same, do ordain and establish the following constitution.
ARTICLE I.
The capital stock of said Bank 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 directors.
ARTICLE II.
The management of said Bank shall be under the superintendence of thirty two directors, to be chosen annually by, and from among the Stockholders of the same; each Stockholder being entitled to one vote for each share, which he, she or they may hold in said Bank; and said votes may be given by proxy or in propria persona.
ARTICLE III.
It shall be the duty of said directors when chosen to elect from their number a President, Cashier, and chief Clerk. It shall be the further duty of said directors to meet in the Director’s Room, in said Banking house, on the first Mondays of November and May of each year, at 9 o’clock A. M. to inspect the books of said Bank, and transact such other business as may be deemed necessary.
ARTICLE IV.
It shall be the duty of said directors to cho[o]se from among their number six men, who shall meet in the Banking house on Tuesday of each week, at 4 o’clock P. M. to examine all notes presented for discounting, and enquire into, and assist in all matters pertaining to the Bank.
ARTICLE V.
Each director shall receive from the Bank one dollar per day for his services when called together at the semi-annual and annual meetings. The President, Cashier, chief Clerk and the six, the committee of the directors, shall receive a compensation for their services as shall be agreed by the directors at their semi-annual meetings.
ARTICLE VI.
The first election of directors as set forth in the second article, shall take place at the meeting of the Stockholders to adopt this constitution, who shall hold their office until the first Monday of November, 1837 unless removed by death, or misdemeanor, and until others are duly elected. Every annual election of directors shall take place on the first Monday of November of each year.— It shall be the duty of the President, Cashier, and chief Clerk, of said Bank to receive the votes of the Stockholders by ballot, and declare the election.
ARTICLE VII.
The books of the Bank shall be always open for the inspection of the Stockholders.
ARTICLE VIII.
It shall be the duty of the officers of the Bank, to declare a dividend once in six months; which dividend shall be apportioned among the Stockholders, according to the installments by them paid in.
ARTICLE IX.
All persons subscribing stock in said Bank shall pay their first installment at the time of subscribing; and other installments from time to time, as shall be required by the directors.
ARTICLE X.
The directors shall give thirty days notice in some public paper, printed in this , previous to an installment being paid in. All subscribers residing out of this , 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 directors after thirty days notice.
ARTICLE XI.
The President shall be empowered to call special meetings of the directors, whenever he shall deem it necessary; separate and aside from the annual and semi-annual meetings.
ARTICLE XII.
Two thirds of the directors shall form a quorum to act at the semi-annual meetings; and any number of the six, the committee of the directors, with the officers of the Bank, or any one of them may form a quorum to transact business at the weekly meetings; and in case none of the six are present at the weekly meetings the officers of the Bank must transact the business.
ARTICLE XIII.
The directors shall have power to enact such by-laws as they may deem necessary from time to time, providing they do not infringe upon this constitution.
ARTICLE XIV.
Any article in this constitution may be altered at any time, amended, added unto, or expunged by the vote of two thirds of the Stockholders.
, Ch’n,
Attest , Cl’k. [p. [1]]
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Related Case Documents
Editorial Title
Constitution of the Kirtland Safety Society Bank, 2 November 1836
ID #
5070
Total Pages
2
Print Volume Location
JSP, D5:299–306
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Footnotes

  1. [1]

    A capital stock of $4 million was significantly higher than that of other community banks in the period. The amount of the Kirtland Safety Society’s capital stock was an ambitious and unlikely, if not impossible, objective. When the Kirtland Safety Society’s charter was considered by the state senate in February 1837, the amount of its capital stock had been reduced to $300,000, which was still high but within the range of other community banks. (See Introduction to Part 5: 5 Oct. 1836–10 Apr. 1837; “In Senate,” Ohio State Journal and Columbus Gazette, 14 Feb. 1837, [2].)

    Ohio State Journal and Columbus Gazette. Columbus. 1825–1837.

  2. [2]

    In addition to electing Sidney Rigdon president and JS cashier, the directors made Warren Parrish the chief clerk, but it is not clear if he was elected in November or at a later point. Parrish’s handwriting in the Safety Society’s stock ledger begins by 21 November 1836, likely the same time he began acting as chief clerk. (Kirtland Safety Society, Stock Ledger, 13–14.)

  3. [3]

    The society’s office was located close to the House of the Lord, likely in a lot to the south. (Woodruff, Journal, 25 Nov. 1836; see also Staker, Hearken, O Ye People, 413; and Plewe, Mapping Mormonism, 31.)

    Woodruff, Wilford. Journals, 1833–1898. Wilford Woodruff, Journals and Papers, 1828–1898. CHL. MS 1352.

    Staker, Mark L. Hearken, O Ye People: The Historical Setting of Joseph Smith’s Ohio Revelations. Salt Lake City: Greg Kofford Books, 2009.

    Plewe, Brandon S., S. Kent Brown, Donald Q. Cannon, and Richard H. Jackson, eds. Mapping Mormonism: An Atlas of Latter-day Saint History. Provo, UT: Brigham Young University Press, 2012.

  4. [4]

    Discounting involved paying specie for less than the face value of notes from other banks and financial institutions. A discount was taken because the notes did not belong to the bank at which they were presented. If the credibility of the bank was in question, or if it was located far from the accepting bank, then a larger discount might be assessed. (Bodenhorn, State Banking in Early America, 48–49; Bodenhorn, History of Banking, 100, 149.)

    Bodenhorn, Howard. State Banking in Early America: A New Economic History. New York: Oxford University Press, 2003.

    Bodenhorn, Howard. A History of Banking in Antebellum America: Financial Markets and Economic Development in an Era of Nation-Building. New York: Cambridge University Press, 2000.

  5. [5]

    Frederick G. Williams recorded compensation from the Kirtland Safety Society Bank for three days “as director” and one day of labor, possibly referring to his work as treasurer pro tem in January 1837. (Williams, Account Book, 22; Kirtland Safety Society Notes, 4 Jan.–9 Mar. 1837.)

    Williams, Frederick G. Account Book, 1837–1842. CHL. MS 783.

  6. [6]

    The first installment required for stock was twenty-six cents per share. This was an uncommonly low installment for initial subscriptions, yet many subscribers struggled to pay even this small amount. (Kirtland Safety Society, Stock Ledger, 1836–1837, in Chicago Historical Society, Collection of Mormon Materials, microfilm, CHL; see also Introduction to Part 5: 5 Oct. 1836–10 Apr. 1837.)

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