The bank, which was known as the "Kirtland Safety Society" failed in November 1837and its business closed. In the aftermath, Joseph Smith, founder of the Latter Day Saint movement, was sued by enemies of the Safety Society for "running an illegal bank". While Smith appealed the fine and made arrangements to have Oliver Granger settle the affairs of the quasi-bank, many bankrupted Mormons left the church because they believed Smith had established the bank in order to enrich himself and the Mormon leadership.
There is no evidence of malfeasance on Joseph Smith's part, but another officer of the bank appears to have absconded with several thousand dollars. The church did what it could to set things right.
Surprisingly, there were people who were so incensed that the Mormons had a bank, that they set about to destroy it. To top things off, the entire country was going through a banking crisis at the time. Land speculation was fueling ridiculous banking practices, and although Joseph Smith warned the members of the church against such practices, there was a spirit of greed and speculation.
Today, of course, the bank notes are worth about a hundred times what they were worth then.
Same thing as most of Joseph Smith's financial ventures - it failed due to obvious fraud. Interestingly, after it failed, Joseph Smith and his associates fled the state to avoid prosecution. Doesn't give you a "warm fuzzy feeling" now does it... lol
It failed.
