Joseph Smith's Illegal Currency Printing and his Fake Collateral Is Rarely Talked About

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The original was posted on /r/exmormon by /u/byhoneybear on 2023-06-27 16:32:57+00:00.

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One of the best gems from Fawn Brodie's "No Man Knows My History" that I have never heard mentioned previously is that Joseph Smith was one of the country's most prominent banking frauds of the 19th Century.

To be fair, this was a period of chaotic banking and money printing practices in the US since large amounts of paper money was needed to secure the massive amounts of land deals moving west through New York, Pennsylvania, Ohio, etc. Joseph Smith wanted to cash in on this trend by opening his own bank in Kirtkland but his application was turned down because he applied after Ohio (and the country at large) put an end to approving these new land bank applications to avoid a national inflationary collapse.

In spite of being denied, Joseph Smith along with Rigdon and others proceeded to open their own bank called the "Kirtland Safety Society Anti-Banking Company"; a thinly veiled and intensely cynical attempt to make their bank look less like a bank. Joseph Smith made himself Treasurer with power to make unilateral decisions in all aspects and purchased a machine that could print money.

They proceeded to print illegal and worthless bank notes that were guaranteed by boxes of silver coins that citizens were invited to look at and heft. Mormons at high ranks who later apostatized revealed that the silver coin boxes only had a thin layer of coins on top, but were filled with sand and rocks for the most part.

Saints used the fake money (likely unaware of its worthlessness) to purchase goods in neighboring "gentile" communities estimated to be worth $33K at the time which today would be worth about $950K. For about a month, the Mormon money was one of the highest valued currencies in the nation based on Smith's claims of the massive amounts of collateral they claimed to hold. Regulations and inspections caught up and the money very quickly became publicly worthless and anyone holding the notes were screwed. 13 lawsuits were leveled against Joseph Smith totaling $25K. Smith and Rigdon disappeared, literally in the middle of the night, without making full restitution and fled to "Zion" (Independence, Missouri) where they had already begun purchasing land with the profits of their last deals. They never looked back.

This was one of the first big events that put intense negative attention on the new Mormon movement. The saints in Missouri got the reputation of being frauds because of this history, laying a foundation for the 'persecution' that later ensued.