Moo Money: 1858 Monetary Innovation in Utah (Moo-Tah?)
By Ray Anderson
When Brigham Young led the first company of 138 Mormon pioneers into the Valley of the Great Salt Lake in July 1847, the group had a total of $50 in coin and currency among them.1 Little did Brigham know that besides being a colonizer, religious leader and statesman, he would also become a central banker in this new land.
The new settlement was not overly concerned with the lack of money. After all, they had left the borders of the U.S. and the nearest well-stocked trading post was 600 miles to the west in California. Besides, their only neighbors, the Ute Indians, preferred buffalo pelts and gun powder, rather than gold coin, as their medium of exchange.
The need for money increased dramatically, however, as the Mormon state of Deseret2 (as it was referred to by its settlers) grew in population and size. By 1858, more than 35,0003 Church members had immigrated to Deseret from the eastern U.S. and Europe (primarily from England and Scandinavia). Settlements extended north into what is now southern Idaho and Wyoming, east into Colorado, south to Arizona, and west into Nevada and Southern California (San Bernardino).
Two mediums of exchange were developed under the direction of Brigham Young. The first was gold coin, used primarily for trade outside of the territory and with overland travelers. The second was “tithing scrip” which was widely accepted for monetary transactions within the Mormon communities throughout the Great Basin.
Although always in short supply, sufficient gold was available over the years from several fortuitous sources. In 1848, several hundred Mormon volunteers (known as the “Mormon Battalion”) were released from the U.S. army. Not only did they have several hundred dollars in muster pay, but several members of the Battalion had wintered at Sutter’s Mill along the American River near present day Sacramento, California. They were present on January 24,1848 when James W. Marshall discovered the first gold nugget which resulted in the Gold Rush of 1849-50.4
With the onslaught of the Gold Rush, Salt Lake City became a major supply center along one of the main overland routes from the eastern U.S. to the gold fields of California. Gold miners gladly traded hard currency for wagons, livestock, food stuffs and camping equipment needed to continue their journey west. The hard currency, in turn, was used to import machinery, tools, farm equipment and other supplies to sustain the rapidly growing population in the Utah Territory.
“Tithing scrip” evolved from a unique system of barter-banking based on the principle of tithing. Each Mormon settlement was presided over by a lay-bishop and most inhabitants faithfully contributed “10% of their increase” (be it in eggs, poultry, grain, vegetables, butter, milk, or other basic commodities) to the community Bishop’s Storehouse.
Moo Money
The commodities donated to the Bishop’s Storehouses provided the medium of exchange to pay workers engaged in public works projects, as well as a source of aid to assist the poor and needy in the community.
As the Mormon communities spread throughout the Great Basin, the Bishop Storehouse network evolved into an efficient banking system. Excess commodities could be deposited in one storehouse in exchange for “tithing scrip” that could be used just like a check to withdraw commodities of equal value from storehouses in any other part of the territory.
While “scrip currency” was not uncommon to pre-Civil war America, many travelers in Utah were surprised at the widespread use of the bills. An amusing story, although most likely embellished, was told by the humorist, Bill Nye to illustrate how the tithing storehouse system functioned:
“In these days if you wanted to go to the theater you took butter, eggs, chickens, potatoes, wheat or anything like that to a tithing house, and they would give you scrip for it. Then you took the scrip to the theater or to any store and bought what you wanted with it.
On one occasion, I took a big fat turkey up to the tithing yard to sell for scrip and the tithing clerk had gone to supper. I waited and he did not return, so I had to go and get the young lady I had invited to go with me, and I carried the turkey into the window of the box office and asked for two balcony seats.
That clerk at the window handed out the two tickets and two spring chickens for change. I had to sit there all through the performance with a chicken under each arm and the young lady I was with was quite peeved that I paid so little attention to her. I was never so embarrassed and uncomfortable in all my life.” 5
In 1856-58, a rapid series of events resulted in a severe drain on hard currency reserves in the Utah Territory.
The first was a bold and well conceived investment ($200,000) in the Brigham Young Express and Carrying Company, more commonly known as the YX Company. This was the largest single business venture yet tackled by the Mormons in the Great Basin. The company was formed to fulfill four objectives. First, it was to provide a system of settlements and supply depots to assist the ever increasing overland migration of Mormon immigrants from Europe. Second, it was to garner income from the regular overland-to-California traffic. Third, an overland freight line was needed to provide the expanding Great Basin economy with tools, machinery, merchandise and equipment at reasonable rates. Finally, there was a need for a regular and dependable mail service. In October 1856, a four-year contract was awarded to YX to carry mail from Independence, Missouri to Salt Lake City.6
Just as YX Company was well on its way to establishing the infrastructure needed to implement its grand design, Brigham Young learned that a military force was being sent to Utah. The force, commanded by General Albert Sidney Johnson, a native Virginian, had three objectives: 1) replace Brigham Young as governor; 2) stop the practice of polygamy; and 3) end the perceived hegemony of the Mormon Church over economic and political affairs in the territory.7
Since Brigham Young had not been given any notification of his removal from office or advised that federal troops were being dispatched to the territory, the troops were perceived to be a hostile mob similar to what the church had experienced in Missouri and Illinois from 1836-1844.8
Consequently, the entire territory was placed on a war footing in order to prepare for the advancing army. Fortifications were built, the militia was expanded, factories were modified to provide guns and gun powder. Preparations were made in the southern part of the state to move the population out of Salt Lake Valley in hopes of avoiding an armed conflict.9
In order to buy time to complete preparations for the invasion, in September 1857, Governor Young dispatched about 1,100 militiamen to Echo Canyon, a strategic eastern pass into the Salt Lake valley. Another unit of 44 men, under the direction of Major Lot Smith, was dispatched to eastern Utah (now Western Wyoming) to harass the oncoming troops. Their instructions were to “….Take no life, but destroy their trains, and stampede or drive away their animals at every opportunity.”10
Major Smith’s small band (soon to become known as the “Mormon Raiders”) was very successful in fulfilling their orders. The U.S. army was forced to winter on the snowy, wind swept plains of Wyoming (near the former Mormon supply station of Fort Bridger, which had been burned-down to prevent its use by the army). In addition, over 1,400 livestock were taken into custody by Major Smith.11 These “captured” cattle were soon to play a central role in Utah’s monetary history.
Fearing an armed conflict, the major non-Mormon merchants that had traditionally provided banking, trading and accounting functions, fled the territory. Their departure, combined with depleted gold reserves due to the failed YX venture, created an urgent need for a new currency to support public works projects and other war preparations underway.
Real estate was not suitable to back a new currency since it was illiquid and non-transferable (i.e. titles were not legally recognized in the Utah Territory until 1869).12 More tithing scrip was not feasible since Bishop’s Storehouses were not stocked well enough to accommodate redemption of a sizable amount of new scrip.
The only liquid asset deemed appropriate to back a new currency was the Church’s livestock herd which was pastured on Antelope Island in the Great Salt Lake. The herd consisted of approximately 600 horses plus the 1,400 cattle that had been “captured” from Johnson’s army. The Church also owned another 3,000 head of horses that had been sent east with the Utah militia and Major Smith.13
On January 19, 1858, a bank was chartered under the auspices of the church to issue the much needed currency. Although some referred to the new financial institution as the Bank of Deseret, it was officially known as the Deseret Currency Association. Brigham Young was elected president and other church officials were appointed to the remaining corporate positions. The capital stock (no pun intended) consisted of the Church’s livestock herd, including the 1,400 head of cattle captured from Johnson’s army. The rationale for including the U.S. army cattle was that they were “analogous to the gold in Fort Knox.” Since it was expected that the cattle would never actually be used to redeem the new currency, their source was irrelevant. Besides, it was expected that the “captured” cattle could be substituted with Church cattle that would be contributed as tithing by members at the end of 1858.14
In order for the new currency to succeed, people had to be confident of its value and it had to be widely accepted. These objectives were achieved by: a) Brigham Young (Utah Governor, President of Deseret Currency Association and President of the Church) and H.B. Clauson (Deseret Currency Association Secretary) signing the notes; and b) unanimous vote by Church members on January 21,1858 to sustain the new bank and accept its currency as the medium of exchange throughout the territory.15
Between February and October 1858, a total of $95,170 in typeset and engraved notes were produced. Of this amount, $11,622 was stored for safekeeping and $83,548 was placed in circulation.16 As a general rule, the people accepted the scrip in good faith. The notes were only good in the Great Salt Lake Valley.
Several methods were used to get the scrip notes into circulation. Church public works projects paid wages in the scrip. Loans of scrip were made to local merchants. W.H. Hooper and Andrew & Levi Stewart, two large Mormon mercantile firms, helped distribute the scrip locally. They also agreed to be redemption agents for the currency, if ever called upon to do so.17
In early winter of 1858, there was a growing sentiment in the U.S. against President Buchanan for deploying the expeditionary force to Utah. The President agreed to meet with congressional representatives from Utah to discuss a compromise. It was agreed that Utah would accept several new non-Mormon territorial government officials, including Alfred Cummings (former governor of Georgia) as governor. In exchange, any perceived wrong-doing by the Mormon militia would be pardoned (including the “capturing” of the livestock that was supporting the Deseret Currency Association scrip). The army would not remain in Salt Lake, but would march to a post mid-way between Salt Lake and Provo.18
On June 26, 1858, the army entered a quiet and mostly deserted Salt Lake City since most residents had moved south to avoid a confrontation. Several days later, General Johnson led his troops to Cedar Valley, approximately 45 miles southwest of Salt Lake City and established Camp Floyd (named after the Secretary of War). On July 1, Brigham Young authorized the citizens of the territory to return to their homes.19
With the crisis resolved, the large non-Mormon merchants returned to the territory by late summer 1858 and the most pressing need for the Deseret currency was eliminated. In August, 1858 a call to return the currency was issued.20 One diarist wrote that it was necessary to call in the Deseret currency because “the Gentile merchants were buying the currency at a 60% discount and then attempting to exchange it in Salt Lake City for livestock, thus draining the church of it horses and cattle.”21
Despite attempts to redeem the currency in livestock, only one transaction is recorded in the Journal of History of the Church in which this occurred. The entry states that “5000 of scrip held by Stewart Brothers was redeemed by 100 head of horses.”22
Most of the currency returned in the form of tithing and donations to the Perpetual Emigrating Fund and other Church causes. In this way, most of the livestock in the Church herds became the property of the PEF and thus provided the basis for the Church teams to assist ongoing emigration efforts of the 1860’s.23
The army remained in Utah until the outbreak of the Civil War in April 1861. General Johnson resigned his commission and joined the Confederate army. Governor Albert Cummings, also resigned his federally appointed post and returned to his native state of Georgia.24
Before abandoning Camp Floyd, the army sold nearly $4,000,000 in surplus goods at a fraction of their value.25 The monetary benefits of this fire sale provided a generous return on the $95,170 of “Moo Money” spent to prepare Utah Territory for the military incursion.
With federal troops out of Utah, President Lincoln asked for Brigham Young’s assistance to protect the overland mail and telegraph stations from Indian attack. It is interesting to note that the Mormon settlers willingly paid a tax to support this effort, thus confirming their long stated loyalty to the Union. It is even more interesting that the commander of the company commissioned to provide the protection was none other than Major Lot Smith of the Utah Militia. It was this same Major Smith that, four years earlier, had been instrumental in delaying the advance of federal troops and in securing the 1,400 head of cattle that provided part of the initial livestock reserve that backed the “Moo Money” issued by the Deseret Currency Association in 1858.26
On December 1, 1867, Brigham Young, H.B Clawson and other officers of the Deseret Currency Association spent the day counting and burning (barbequing?) $93,544 in Deseret notes.27 This included the $11,622 held in safekeeping. Consequently, there could still be as much as $1,626 in “Moo Money” still grazing somewhere in the hands of collectors.
Thus, the era of Utah’s first “stock market” came to a peaceful end (and that’s no bull).
