Why the Mormons Panicked in 1838
One hundred and seventy-four years ago today, Joseph Smith and his Mormon followers fled Kirtland, Ohio, for what they hoped would be their sanctuary on the Illinois frontier.
Friction between the Latter-day Saints and other American settlers led to armed confrontation, however, and eventually to Smith's martyrdom. While jailed in Carthage, Illinois, Joseph Smith was murdered by a mob in 1844.
We are concerned with this date in 1838, however, and what it was that led the Saints to leave Ohio. Mostly, it was the failure of the fledgling church's bank, and subsequent demands for Smith's prosecution by disaffected depositors whose savings had been lost. Although Mormon banking practices were destined to be validated in their desert redoubt along the Great Salt Lake, that day was in the future:
On January 12, 1838, the members of the beleaguered church were coping with a financial calamity that had swept the United States.
It was called the Panic of 1837, and it wiped out or severely damaged half the banking institutions in this country, and led to an economic depression that lasted five years.
The Panic of 1837 had numerous causes, ranging from what we'd now call "globalization" (British banks stopped pumping money into the U.S. economy) to malfeasance (American bankers had lent out too much money on too little collateral).
Politically, the factors included Andrew Jackson's actions and his successor's inactions. President Jackson had blocked extending the charter of the National Bank and ushered in an era of "hard" (non-paper) money that worsened the credit crunch. Martin Van Buren, who assumed the presidency in 1837, didn't believe government should be much involved in the economy. He was mostly content blame greedy bankers and speculators.
The echoes of all this to our time are not easy to decipher. It's difficult to say which historical figures, if any, represent George W. Bush and Barack Obama in this long-ago drama, although I suppose that the ineffectual Martin Van Buren would have had nasty things to say about Bain Capital.
But it does seem that our society has advanced to the point where a member of Joseph Smith's now-thriving church may be on the verge of securing a major political party's presidential nomination. And it's an unmistakable sign of technological progress that the Romney campaign's computer algorithms placed a banner ad this morning on a historical reference website describing the Panic of 1837.
Thus does American history march along its way.
