The Kirtland Safety Society and Its Aftermath in LDS Church Finances

In the aftermath of the 1837 failure of the Church’s banking business in Kirtland, Ohio, and the subsequent fallout affecting Mormon Church finances, including death threats made against Joseph Smith and Sidney Rigdon, many Church leaders fled Ohio to join Church members in Far West, Missouri. In April 1838, the Lord commanded the saints to build the Far West Temple while simultaneously commanding them not to incur any additional debt to accomplish this objective. 

Upon their departure from Kirtland, the Church and many of its leaders were steeped in debt. In response to a prayer from Joseph in July as to how to fund the Church’s various needs, the Lord revealed what we call today the Law of Tithing. 

Consecration was an important term for the United Firm (also known as the United Order). Several sections of the Doctrine and Covenants, including 78 and 82, were originally printed with code names rather than disclosing the names of the men who had been called to participate in the United Firm. This was done both to protect the Church and protect its leaders from financial persecution. In the 1981 edition of the Doctrine and Covenants, all code names were removed, except for one. This is the term “United Order.” This was originally intended as a pseudonym for the term “United Firm,” which was a union of up to 11 individuals who would serve and support Kirtland’s financial institutions as well as institutions in Missouri, especially in the city of Independence. In Independence, Missouri, the Church established grocery stores, an ashery, a printing press, and some ventures associated with land development. The individuals in charge of these ventures are what constituted the United Firm. Established in Section 82, the United Firm only continued for about two years before it was dissolved. The Lord gave His reasonings for why it was dissolved in Section 82 of the Doctrine and Covenants. It was because, “Some of my servants have not kept the commandment but have broken the covenant through covetousness with feigned words.” 

The dissolution of the United Order only ended the joint stewardship of those men who were involved. It did not end the corporate management of the Church’s financial and commercial interests, which began from the point to fall under the banner of Mormon Church tithing. However, the organizational structures and methods continued to evolve in coming years. The need for Church leaders and members to consecrate their time, talents, and money to advance the cause of Zion remained an ongoing effort. In fact, the seed that was the United Firm flourishes today in the form of every business venture of the Church, including the Polynesian Cultural Center in Hawaii, almond farms, orange orchards, cattle farms, digital media enterprises, real estate interests, and other for-profit businesses. The roots that justify these modern business ventures are outlined in Sections 70, 78, 82, 104. After all, the Lord’s Church must have the ways and means to fund building the kingdom of God on earth and, like everything else, this requires money.

Some of the Church’s financial enterprises are top-down while others are bottom-up (grassroots). For example, the Polynesian Cultural Center originally started because students at BYU-Hawaii needed to find the means to pay tuition. They began to participate in performances highlighting the island cultures of their homeland. From the very beginning the LDS Church has been involved in for-profit businesses. Not by accident, but by design. And according to revelation.

The Kirtland Safety Society

After the dissolution of the United First, the Church entered a very busy period in its history. Tremendous sacrifices had been made to build the Kirtland Temple. Members in Missouri, (the most populous of the two Church headquarters) had become refugees as a result of mob violence. Many Church members had taken refuge in neighboring Clay County while still trying desperately to regain their property in Independence.  

It’s in the midst of this period of turmoil in Missouri that the Kirtland Temple is dedicated. Adjusted for inflation, and taking into account the full resources of the Church, the Kirtland Temple stands as the most expensive building the Church has ever constructed. It was only recently that this magnificent edifice was repurchased by the LDS Church from the Community of Christ. The construction of this building was an incredible feat. Enormous sacrifices were made. Unfortunately, paying for the edifice also incurred incredible debt. The Temple was completed, but the weight of financial burden it placed upon the shoulders of the Church was considerable. Still, the dedication of the Kirtland Temple is viewed, even today, as an extraordinarily celebratory event. The reported outpouring of miracles are breathtaking–not just the remarkable spiritual visitations experienced by Joseph and Oliver. Practically every participating Church member saw and reported miraculous manifestations. 

The dedication of the Kirtland Temple established patterns and principles associated with Temple dedications that remain fundamental to this day. The hymn “The Spirit of God”, composed for this event, remains the anthem of Temple dedications. Section 110 records appearances of the Savior, Moses, Elias, and Elijah. Section 110 represents a kind of apex of the spiritual experiences associated with Kirtland. In the wake of this event, the Church entered one of its most challenging historical periods, summarized to some degree in Section 111, which was received a few months later. The heading of Section 111 discusses events that occurred in Salem, Massachusetts, famous in American history for its witch trials. The rationale for visiting Salem illustrates the kind of financial pressure the Church is enduring in the months following the Kirtland Temple dedication. The Church is desperate to find a way to alleviate its debts–so desperate that it turns to some solutions that can be fairly described as dubious or sketchy.

As the story goes, a teenage Church member named Ebenezer Robinson learned from another Church member named Jonathan Burgess of a large amount of money secreted in the cellar of a Salem, Massachusetts house. Basically, Church leaders decide to embark on a treasure hunt. After all, the Church was still basking in all of the miracles associated with the dedication of the Kirtland Temple. In that spirit, Church leaders thought “Buried treasure? Why not?” God had delivered for the saints some formerly-unimaginable miracles. Why not deliver into the hands of the Church actual buried treasure to help it climb out of debt? 

Brewster and Robinson both left the Church after the events recorded in Section 111. They then proceeded to paint this effort in the worst possible light. Nevertheless, it remains an undisputed matter of record that Joseph Smith and other leaders did, in fact, journey to Salem. Joseph Smith actually describes this trip as something that for him was personally transformative. He tours the region, visits American historical sites, and expresses some very poignant and moving thoughts about religious liberty and the American values embedded in the Constitution. 

Section 111 starts with a gentle rebuke from the Lord: “I, the Lord, am not displeased with your coming on this journey, notwithstanding your follies. I have much treasure for you in this city, for the benefit of Zion, and many people in this city, whom I will gather out in due time for the benefit of Zion through your instrumentality.” The Lord seems to be saying, “Yeah, coming here wasn’t the best idea, but it’s okay. All will be well. Good will ultimately come out of it.” This visit to Salem does result in numerous conversions and baptisms. A rather healthy branch of the faith is established in Salem that eventually moves west to join the main body of the Church. 

More than anything, this episode illustrates the reality that the Church was in the midst of a tense financial struggle. This matter is also discussed in Section 112. The bottom line is that the Church was trying to find solutions. Out of this emerges the idea of opening a bank.

Again, the initial idea is that a bank could help the Church alleviate its debts. Most of the converts who have gathered to Kirtland are dirt poor, having very few resources. By establishing a bank, Joseph and other Church leaders hoped that by having everyone pool their resources, its financial challenges might be resolved. A bank could enable the Church to raise funds to help new converts emigrate to the area and purchase land or a house.  

Keep in mind, it wasn’t just debts associated with the Kirtland Temple that was pressuring the finances of the Church. It was also the costs associated with helping Church members in Missouri displaced by violent mobs. The Lord says in Section 101:68, “Nevertheless, as I have said unto you in a former commandment, let not your gathering be in haste, nor by flight, but let all things be prepared before you, and in order that all things be prepared before you, observe the commandment which I have given concerning these things—Which saith, or teacheth, to purchase all the lands with money, which can be purchased for money, in the region round about the land which I have appointed to be the land of Zion.” The Lord is certainly not advising the saints to act in haste. He wants the gathering of Church members to be conducted in an organized responsible manner as resources become available.  

The gathering of converts to Missouri unfolds so quickly that established residents in Missouri become increasingly concerned. Suddenly, the city of Independence and the surrounding county appears overrun by Mormon settlers. The gathering to Kirtland is also a haphazard and hasty affair. So the sources of the Church’s financial problems stem from three sources: the displacement of Missouri saints because of persecutions, hasty gatherings of converts to Kirtland, and debts associated with the Kirtland Temple. These became the basis for the idea of opening a Church bank.

Certain controversies associated with the Kirtland Bank cannot be swept under the rug. For example, before opening a bank, the Church needed to obtain a charter from the state legislature. The Ohio state legislature had granted many such charters in prior years. The Church sends Orson Hyde to the legislature to obtain state authorization for the Kirtland Safety Society. However, the state refuses. They do not grant the charter. It’s not just the Kirtland Safety Society who is rejected. In the 1836-1837 session of the Ohio state legislature, no new bank charters were approved. In prior years the state legislature had granted many bank charters. For this reason the Church assumed the approval process would receive speedy approval. However, this was not to be. Because the wheels of establishing a bank have already been set in motion, Church leaders sort of improvise and decide to open the Kirtland Safety Society without a charter. To do this, the Church must call their bank an “anti-bank” as a bureaucratic work-around. This is why some Kirtland Safety Society notes read: “The Kirtland Safety Anti-Banking Society.”

So it’s kind of like a bank, but not a bank. Some might have called it a private joint stock company. Basically, it would function like a bank in that it would take deposits, issue loans, etc. But because the state did not issue the Church a charter, the Kirtland Safety Society is not an official bank. It’s not illegal, but the institution poses considerably more risk to those who participate.

To further understand the difficulties associated with this enterprise, it’s important to mention the economic situation in America during the 1830s.

On JosephSmithPapers.org one can find Kirtland Safety Society banknotes. Today’s economy is moving away from paper money altogether. But back in the 1830s, the federal government did not issue paper money. A dollar bill was essentially a government note that claimed to have government backing. In theory, the government would reimburse the cost if a business rejected it. In the 1830s, the U.S. federal government minted coins, but no print money. Paper money was printed by local banks. This was also true for the Kirtland Safety Society. If a retailer refused your note, the holder could, in theory, take the note to the Kirtland Safety Society, who would pay in gold. This allowed interactions to occur quickly and cleanly, but also made the bank vulnerable. Despite lacking a legislative charter from the state of Ohio, the Kirtland Safety Society officially opened on January 2, 1937. It immediately ran into trouble. Foremost, it was underfunded. Not enough gold was in its vaults to underwrite its paper currency. It simply operated on good faith expecting–with the help of God–everything would work out. 

Several stockholders in the bank apparently agreed to make payments on their shares to help the bank maintain its gold and silver reserves, but neglected to do so. Thus, the bank was in serious trouble almost from the beginning. 

Other negative factors occurred beyond their control. For instance, in a neighboring community lived a man named Grandison Newell. Newell did not like the Church. He orchestrated a run on Kirtland Safety Society banknotes to deliberately exhaust the bank’s reserves. It was like the scene in It’s a Wonderful Life where everyone demands their money and Jimmy Stewart tries to tell them, “Well, Johnny, your money’s not here. It’s in Ted’s house and Isaac’s house, etc.”

By February it’s clear that the Safety Society is experiencing major setbacks. Joseph Smith journeys to Michigan seeking assistance for the bank. A meeting was held in the Kirtland Temple that same month seeking to replace Joseph Smith as Church president. In the minds of many members, Joseph Smith became the sacrificial lamb. After all, he had promoted the bank. His word was considered the same as if it had been received from On High. Many were convinced God would save the bank. God would keep things going. Thus, when the bank started to fail, many began to doubt Joseph’s prophetic leadership.

On top of all this, local newspapers wrote articles casting doubt on the bank’s legitimacy. Many workers and businesses in and around Kirtland started refusing to honor Safety Society notes.

Grandison Newell and his associates had started hoarding Safety Society bank notes and orchestrated additional runs on the bank. Stockholders were unable to make payments on their shares. This poorly inaugurated banking enterprise shook the faith of many Church members. Converts questioned the prophet’s spiritual leadership that had spurred them to invest in the first place. 

Locally, the collapse of Kirtland Safety Society became a perfect storm. Suddenly, it became a perfect storm nationally. Financial insecurity gripped the entire country. This insecurity set off the so-called Panic of 1837, wherein virtually everyone pulled their money from local banks nationwide. Hundreds of banks across the United States failed in this period. In the midst of this banking crisis/recession, the Kirtland Safety Society was not immune. Despite the sincere efforts of some to turn things around, no effort could ultimately save the bank. Regarding the Panic of 1837, Wikipedia reports, “Out of 850 banks in the United States, 343 closed entirely, sixty-two failed partially, and the system of state banks received a shock from which it never fully recovered.” This adds up to 40 percent of all U.S. banks closing their doors in 1837. Even some high ranking Church leaders faltered in their testimonies and questioned Joseph Smith’s leadership.

Even stalwarts like Parley P. Pratt criticized Joseph Smith and nearly apostatized. Others, like Warren Parrish, turned entirely against Joseph Smith. Most saints in Kirtland remained faithful, but there was much dissent within the Church. Oliver Cowdery, David Whitmer, Martin Harris, John Johnson and many other formerly stalwart Church members lost considerable money. Some accused Joseph Smith of swindling them, although there is no evidence that Joseph emerged from the catastrophe any better off than others. Joseph may have lost more money than anyone else. As far as his personal investments in the Kirtland Safety Society, Joseph was all in. He didn’t ask anyone to take risks that he wasn’t willing to take himself. Nevertheless, Joseph received the brunt of the most substantial losses the bank incurred. By year’s end, the Kirtland bank shutters its doors. Some openly openly threaten Joseph Smith’s life. In an unpublished revelation still found on the Joseph Smith Papers website on January 12, 1838, it states, “Thus saith the Lord: Let the presidency of my church take their families as soon as it is practicable, and a door is opened for them to move on to the West as fast as the way is made plain before their faces. Let their hearts be comforted, for I will be with them. Verily I say unto you, the time has come that your labors are finished in this place for a season.” 

The Lord is clearly ordering His saints to leave Kirtland. “Therefore, arise and get yourselves unto a land which I shall show unto you, even a land flowing with milk and honey. You are clean from the blood of this people, and woe unto those who have become your enemies, who have professed my name, saith the Lord, for their judgment lingereth not, and their damnation slumbereth not. Let all your faithful friends arise with their families also, and get out of this place, and gather themselves together unto Zion, or Missouri, and be at peace among yourselves, O ye inhabitants of Zion, for there is no safety for you.”

All First Presidency members are commanded to journey west and unite with beseiged Church refugees in Missouri. Upon arriving in Missouri, they find themselves face to face with the same persecutions. Kirtland, Ohio is no longer a meaningful Church center. This is when the LDS Church loses the Kirtland Temple–an event only rectified in 2024 as the Church repurchased the Kirkland Temple and other important properties and documents from the Reorganized Church of Jesus Christ of Latter-day Saints, or the  Community of Christ. It’s an event that Latter-day Saints have awaited for almost two centuries. 

The failure of Kirtland Safety Society turned many against Joseph Smith, disillusioned with his prophetic gifts. Many labeled him a fallen prophet. Some had threatened to physically harm Joseph and Sidney.  

Brigham Young claimed death threats were also leveled against him. Brigham, too, journeys to Missouri. Heber C. Kimball declared that just defending Joseph Smith’s character in those days might place that man’s life in jeopardy. It was a brutal period in Church history. The revelation instructing Joseph to leave Kirtland is followed up by a short journal entry in Joseph’s personal history. He wrote, “A new year dawned upon the Church in Kirtland 1838 in all the bitterness of the spirit of apostate mobocracy, which continued to rage and grow hotter and hotter until Rigdon and myself were obliged to flee from its deadly influence, as did the apostles and prophets of old. [We departed] on horseback to escape mob violence which was about to burst upon us under the color of legal process, cover the hellish designs of our enemies, and to save themselves from the just judgment of the law.” Joseph and Sidney escaped Kirtland, but they did not escape their debts. 

As Joseph arrives in Far West, Missouri, another revelation is received that serves as a precursor to the principles of Mormons and Tithing. This is Section 117 of the Doctrine and Covenants. This revelation instructs several , including Newel K. Whitney, to leave Kirtland and follow them to Missouri. It also appoints a man named Oliver Granger to remain behind to settle the Church’s debts. This tells us they are quite conscious of the fact that there are debts that still remain that need to be resolved. Section 117, verse 12 reads,  “I remember my servant Oliver Granger. Behold, verily I say unto him, His name shall be had in sacred remembrance from generation to generation forever and ever, saith the Lord. Therefore, let him contend earnestly for the redemption of the First Presidency of my church, saith the Lord. And when he falls, he shall rise again, for his sacrifice shall be more sacred unto me than his increase.” 

Moving  words. In fact, Oliver Granger’s is a moving story. Oliver does everything he can to settle the debts of the First Presidency and the Church in fairness and equity. He eventually dies in Kirtland. His grave is still visible in the cemetery beside the Kirtland Temple to this day. Oliver Granger stays behind and fights the good fight on behalf of the First Presidency to settle Church debts. Unfortunately, he dies in the process. His daughter, Sarah Granger Kimball, eventually moves to Nauvoo and becomes a key figure in establishing the Relief Society. Thus, it would not be accurate to characterize the abandonment of Kirtland by the Church as an effort to flee financial responsibilities.  The lives of Church leaders were threatened. Still, Church agents remained behind to address any unsettled financial concerns. 

As the scene shifts to Far West, a new development in Church finance unfolds. Doctrine and Covenants Section 119 provides a succinct summary of the circumstances. In the historical introduction it reads, “The troubled situation of church finances was compounded by the nationwide panic of 1837. During this period, Joseph Smith and Sidney Rigdon incurred several thousand dollars of debt. In the latter half of 1837 the bishops in Missouri and Kirtland, Ohio took new steps to address the church’s financial problems. In September of 1837, the church published an appeal from Bishop Newel K. Whitney and his counselors in Kirtland, calling on church members everywhere to ‘bring their tithes into the storehouse’ to relieve church debts and to help establish the community of saints in Missouri. While this general request did not include recommended donation amounts, in December of 1837 a committee composed of Edward Partridge, the bishop of Zion in Missouri; Isaac Morley, his first counselor in the bishopric…” 

A man named John Corrill was appointed keeper of the Lord’s storehouse. A new plan proposes that every head of household annually donate a certain percentage of their net worth based on Church needs for that year. Bishop Edward Partridge suggests a floating percentage of a member’s annual income of two percent of a member’s entire net worth. He writes, “We believe that a voluntary, free-will offering from year to year will not only be pleasing in the sight of the Lord, but will be in some degree fulfilling the law of consecration. Secondly, we believe that a percentage on what a man is worth is a more equal mode of raising funds than the tithing of what a man raises or his income from year to year. Interesting. So it’s a little more equal to give a percentage of your net worth than it is to ask for a tithing of your income….It’s expedient that every man renders an inventory to the bishop or his successor in office yearly of what he is worth after deducting his honest debts.” 

Then the letter continues: “Therefore, we recommend that elders holding meetings among the saints in this region of the country read this report to the churches and instruct them about the necessity of forthwith making an estimate of what they are worth and of paying the above-named percentage as soon as they conveniently can. We have estimated that two cents upon the dollar for what every man shall be worth when he renders his inventory to the bishop will raise a sum sufficient for 1838.” It appears that  Bishop Partridge felt tasked with coming up with a way to settle debts and fund Church needs. 

In April, 1838, Joseph the Prophet, now living in Far West, received another revelation, Section 115, instructs the saints to prepare for the construction of a new temple. However, this time the Lord directs the First Presidency to avoid debt in the construction of the Far West Temple. 

The debt issue of Joseph and Sidney Rigdon crops up again in May when these two men are asked by the high council about potentially compensating them for their services in an effort to unencumber both men from debts incurred in their names in Ohio. On July 8th, 1838, the first payment on a debt totaling over $4,000 became due–funds Joseph owed to attorneys for services rendered in Kirtland. Adding further stress, the Lord has commanded the construction of a new Temple! Where are those funds supposed to come from? 

That sets up the context for Joseph’s question that results in Section 119. According to a copy of the revelation here in the handwriting of George W. Robinson, Joseph Smith asked, “Lord, show unto thy servants how much thou requirest of the properties of thy people for a tithing.” This result is the revelation known as the Law of Tithing.

Note that the word tithe does appear in the Doctrine and Covenants before section 119. Before this the Church wasn’t using the word tithe or tithing in the same way the Church uses it today. So to address the issue of Mormons and Tithing, Joseph is asking, “Lord, how much do you want your people to donate to satisfy the Church’s needs?”

Section 119:1-3 reads, “Verily, thus saith the Lord, I require all their surplus property to be put into the hands of the bishop of my church in Zion for the building of mine house, and for the laying of the foundation of Zion, and for the priesthood, and for the debts of the presidency of my church, and this shall be the beginning of the tithing of my people.” 

Verse 4 talks about a second tithe: “And after that, those who have thus been tithed shall pay one tenth of all their interest annually. And this shall be a standing law unto them forever for my holy priesthood, saith the Lord.” So tithing number one, surplus property–a one-time donation. Tithing number two is ongoing and is defined as one-tenth of a member’s annual increase.

Does this replace the Law of Consecration? Some have described tithing as a lesser law because the saints were unable to properly live the Law of Consecration.  Is this an accurate way to look at it? 

Let’s review the first two sentences in the heading of Section 119: “Because of failure on the part of many to abide by this covenant [the Law of Consecration as outlined in section 42] the Lord withdrew it for a time and gave instead the law of tithing to the whole church.” So the heading indicates that the Lord is withdrawing the Law of Consecration to be replaced, for a time, by the Law of Tithing, which many believe will be restored sometime before the Second Coming of Jesus Christ, or perhaps even during the Millennium.  

There are two problems with that interpretation. First,  it suggests that the Church doesn’t live the Law of Consecration when the Law of Consecration remains a covenant that members make in the Temple. Clearly, the Lord still expects members to live this law. Second, the inference is that tithing is an inferior or lesser law while consecration is a higher law. However, despite what is stated in the heading, the revelation itself doesn’t seem to support these ideas. 

Church historian Steven Harper wrote the following for clarification: “Though it is clearly worded and consistent with Joseph Smith’s earlier revelations, Section 119 may be his most misunderstood revelation. That’s because everyone reads the scriptures through a figurative pair of glasses. The glasses are made of presuppositions.” His point is that the glasses can’t be seen or felt, but they distort what is seen and understood. The 1981 edition of the Doctrine and Covenants, and the 2013 edition also, includes a new heading for Section 119. While many errors were corrected in this heading, these first two sentences were not corrected in the 2013 edition. 

Steven Harper adds: “To see how this works, read the revelation in section 119 without looking at the heading. Forget everything you think you know about tithing and just read the revelation. Note that it begins with a direct restatement of the law of consecration.” So it’s clear that the revelation isn’t saying consecration is repealed. In fact, the Law of Consecration is repeated. Brother Harper continues: “This is the first of the revelation’s three uses of tithing or tithe. All of them refer to the voluntary offering of surplus property. And after that, ‘Those who have thus been tithed, shall pay one tenth of their interest annually.’ Clearly tithing is not a lesser or lower law to be replaced someday, but a standing law forever.” 

Later on, Harper writes, “So why do saints tell each other the story that the law of consecration is a higher law and tithing is a lower law? The Doctrine and Covenants doesn’t say that. There’s not enough space here to explain this misunderstanding completely, but the heading does play a role in it. There are erroneous sentences in the heading that conflict with the revelations in the Doctrine and Covenants.” 

He further explains that some people misread this revelation as a repealing of the Law of Consecration. Yes, the United Firm has been dissolved, but the Law of Consecration has not changed. Harper adds, “President Gordon B. Hinckley taught that the law of consecration was not rescinded and is still in effect. So how could Section 119 be instead of the Law of Consecration? The revelation doesn’t say tithing is instead of consecration. It simply restates the law and then adds clarification, and perhaps even a level of greater obligation. So it’s best understood as part of, not instead of, the law of consecration.” Harper then reiterates his analogy, “Reading the revelation through broken glasses causes us to distort it to mean that tithing is a lower law that’s going away someday. But seeing the revelation through the lenses of its original context, shows us how it fits in the law of consecration, a standing law unto them forever, and that obedience to it is a prerequisite to Zion.” 

Tithing is not “lesser law.” The Law of Consecration has been adjusted, but the system has been flexible from the beginning.The way in which it is administered or the way that Church members are asked to live the Law of Consecration, has simply been tweaked or modified according to the circumstances of the saints. 

Continuing with Section 119:4: “Those who have thus been tithed shall pay one tenth of their interest annually, and this shall be a standing law unto them forever for my holy priesthood, saith the Lord.” Some dispute what is meant by one tenth of one’s interest. Does this mean a penny from every dime and a dime from every dollar or does it mean something else? 

Bishop Edward Partridge, shortly after this revelation was received, writes a letter to Bishop Newel K. Whitney, who’s still in Ohio. In this letter, Bishop Partridge states, “The Saints are required to give all their surplus property into the hands of the Bishop of Zion, and after this first tithing they are to pay annually one tenth of all their interest…That is, if a man is worth $1,000 the interest on that would be $60, and one-tenth of the interest will be, of course, $6. Thus you see the plan.” 

If asked to define tithing on $1000, most Latter-day Saints would say this means $100. However, Bishop Partridge is talking about net worth. 

The way he would calculate this is: “If a man is worth a thousand dollars, then interest on that would be $60.” 6% was a common interest rate at that time. He continues, “Thus you see the plan.” So he says, after paying Tithing Number One of all your surplus property, interpreted to mean anything you don’t have immediate use of, then the revelation reads: “Those who have thus been tithed shall pay one tenth of all their interest annually. And this shall be a standing law unto them forever.” Thus, according to Bishop Partridge, those who have been tithed shall then pay one tenth of their invested net worth at six percent annually. This seems very different from a “dime from every dollar and a penny from every dime.”

In the Church’s Gospel Library app, they provide a short article that seeks to define this issue further in Church History Topics. The article is titled “Tithing.”
The article states, “Over time the saints’ tithing practices have changed as the economy and circumstances of the saints have shifted. Initially church leaders applied a complex formula to calculate how much tithing the saints owed.” 

Bishop Partridge passed away in 1840. His responsibilities are then taken on by Newel K. Whitney. The article in the Gospel Library app continues: “By the 1840s, however, this was simplified to the requirement to pay one tenth of their increase or income. The methods of paying tithing likewise shifted over time. In the 19th century saints often made in-kind donations, such as animals or produce. Starting in Nauvoo, many saints in Nauvoo donated one day in ten to work on the temple or other church projects. Church offices in Nauvoo and Salt Lake City had a tithing office and a yard that served as places to store donated goods such as grain, vegetables, merchandise, cut stone, lumber shingles, and livestock. In outlying settlements, local bishop’s storehouses were similarly used to pool the community’s resources. In calculating their annual tenth, as outlined in the 1838 revelation, Church members sometimes counted things like land appreciation as increase, since many people were not earning wages. In the 20th century cash earnings and donations became more common. Throughout these changes, tithing has remained one of the most conspicuous ways that Latter-day Saints fulfill the commandment to consecrate their lives to God’s work. Today tithing funds are used, among other things, to build temples and meetinghouses, support family history research, share the gospel with others, and provide humanitarian service.” 

The official Church Handbook interprets Section 119 as follows: “Tithing is the donation of one tenth of one’s income to God’s church (see Doctrine and Covenants 119:3-4) . . . interest is understood to mean income. All members who have income should pay tithing.” 

In 1970, a First Presidency letter was sent to all presidents of stakes and missions, as well as bishops and branch presidents, to address this question of “What is a proper tithe?” Church handbooks quoted this First Presidency letter for many years as its official standard. It reads, “For your guidance in this matter, please be advised that we have uniformly replied that the simplest statement we know of is that statement of the Lord Himself, that the members of the church should pay one tenth of all their interest annually, which is understood to mean income.” Obviously, Bishop Partridge did not understand it this way. However, over time, this is how it came to be understood. The 1970 First Presidency letter continues, “No one is justified in making any other statement than this. We feel that every member of the church should be entitled to make his own decision as to what he thinks he owes the Lord and to make payment accordingly.” This seems to correspond with the counsel that Joseph Smith gave to Edward Partridge very early on. Joseph told Edward not to condescend to any particulars in trying to assess surplus. Let Church members decide for themselves what surplus means.

Thus, it is left to every member to decide what he owes the Lord and make payment accordingly. A bishop asks a simple yes or no question. He’s not going to demand a complicated breakdown. He simply inquires, “Are you a full tithe payer?” That’s it. It is a matter between each Church member and the Lord. A bishop is there to represent the Lord. No one is justified to make any other statement beyond the directives of the First Presidency on this matter. The oft-repeated quote of Joseph Smith is that the Church is here to teach correct principles, and Church members must govern themselves.

Essentially, it’s the same as the system of consecration. This principle still persists in the LDS Church and has proven to be quite effective.

In the aftermath of the Edmunds-Tucker Act, which was the U. S. government’s effort to shut down the Church for continuing the practice of polygamy by confiscating all of the Church’s property, many Church members stopped paying tithing because they were concerned that their donations would be stolen by the U. S. government. After the receipt of the Manifesto, which discontinued polygamy, Lorenzo Snow announced that it’s time for Church members to pay tithing again. He went on speaking tours around the Church, inviting the saints to pay tithing and reap the Lord’s promised blessings for doing so. 

To this day, many Latter-day Saints enthusiastically testify that this principle has been a great and enduring blessing in their lives.

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