Those mormons who didn't lose their life savings FLED Kirtland, Ohio along with Joseph Smith to avoid paying up. Pretty poor reaction from the backers of the bank that Smith once claimed "could never fail, and would swallow up all other banking institutions of the world". Oops.
Most of those notes ended up in the outhouse. Nobody wasted worthless paper in those days.
"Thirteen suits were brought against him [Smith] between June 1837 and April 1839, to collect sums totaling nearly $25,000. The damages asked amounted to almost $35,000. He was arrested 7 times in 4 months, and his followers managed heroically to raise the $38,428 required for [HIS] bail. Of the 13 suits only 6 were settled out of court-about $12,000 out of the $25,000. In the other 7 the creditors either were awarded damages or won them by default." They never got to actually collect from the LDS on those awards.
Half of the original 12 top LDS leaders, and more than half of the total church membership left the church because of the Kirtland failure.... According to several individuals that left the church, the bank was established on fraudulent claims of capital security. They related that the bank vault was lined with many boxes, each marked $1,000. These boxes were actually found to be filled with "sand, lead, old iron, stone, and combustibles," but each had a top layer of bright fifty-cent silver coins. Anyone suspicious of the bank's stability was permitted to lift and count the boxes. According to C. G. Webb: "The effect of those boxes was like magic. They created general confidence in the solidity of the bank and that beautiful paper money went like hot cakes. For about a month it was the best money in the country."
-----(Interview by W. Wyl. See Mormon Portraits, p. 36; also Oliver Olney: Absurdities of Mormonism Portrayed, p. 4; the letter of Cyrus Smalling in E. G. Lee, The Mormons, or Knavery Exposed, p. 14; and Fawn Brodie, No Man Knows My History, pp. 194-8).
Too many witnesses. The LDS doesn't like witnesses.
Did you know that the church made good on all losses?
