• NASDAQ +21.65
• DOW
• S&P 500 +8.35

• 1 CAD = 0.9653 USD

The government takeover of the United Effort Plan Trust and the self-serving management of the court-appointed Special Fiduciary Bruce R. Wisan are shockingly reminiscent of the federal escheatment of LDS Church property in the late 1880s and the scandalous administration of the court-appointed receiver Frank H Dyer.

 

The LDS Church was disincorporated under the Morrill Act of 1862 and was prohibited from holding property in excess of $50,000; however, it was not until the passage of the Edmunds-Tucker Act in 1887 that the federal government provided the mechanism for taking possession of Church property.

 

As was the case with other legislation enacted during Utah territorial days, the real target of the Act was the Mormon theocratic system. The Salt Lake Tribune observed, “The essential principle of Mormonism is not polygamy at all but the ambition of an ecclesiastical hierarchy to wield sovereignty; to rule the souls and lives of its subjects with absolute authority, unrestrained by any civil power.[i] A similar sentiment was expressed in the autobiography of Senator Fred T. Dubois of Idaho, one of the leading anti-Mormon crusaders of the time:

 

 

The enemies of Mormonism considered that it was all right to be bossed by politicians but all wrong be guided by an ecclesiastical authority in temporal affairs. As Orson F. Whitney observed, what they “really wanted was the passing of the reins of power from the hands of the priest to those of the politician.”[iii]

 

In anticipation of the passage of the Edmunds-Tucker Act, LDS Church President John Taylor and other general authorities had secretly begun transferring Church properties into the hands of individuals, local congregations, and secret trusts. The only property remaining in the hands of the Church when the new law went into effect was the Salt Lake Temple Block, the Office of the President of the Church, the Church Farm in Salt Lake City, four Indian farms (which were liabilities rather than assets), and cash and negotiable instruments valued at $240,000. It was hoped that only the Church Farm would be seized by the government and that the other properties would qualify under exemptions in the law for places of worship and parsonages. With the Church disincorporated and the position of trustee-in-trust abolished, the Presiding Bishopric was appointed by the general conference of 1887 to hold meetinghouses, parsonages, burial grounds, and other properties.[iv]

 

On July 30, 1887, the day after the burial of President Taylor, the United States Attorney for Utah, George S. Peters, commenced suit in the territorial Supreme Court to seize all Church property held by the trustee-in-trust in excess of $50,000 and to formally dissolve the Corporation of the Church and the Perpetual Emigrating Company. The government claimed that the Church held real estate worth over $2,000,000 and personal property worth over $1,000,000.[v] The Court made the U.S. Marshal, Frank H. Dyer, receiver for Church property, a decision agreeable to both sides with the exception of Judge Charles S. Zane, who held that by selecting the U.S. marshal the Court had made the plaintiff the receiver. 

 

The receiver took possession of the Tithing Office, the Gardo House, the Historian’s Office, and the Temple Block as well as property belonging to the Perpetual Emigrating Company valued at $500,000 but consisting mainly of uncollectible promissory notes.[vi] These properties were then rented back to the Church, the Temple Block for $1.00 per month, the Tithing Office and the Historian’s Office for $300 (later $200, then $500) per month, the Gardo House for $75 (later $450) per month, and the Church Farms for $50 (later $401) per month.[vii]

 

Early in 1888 Marshal Dyer filed suit against the Church, claiming that in an effort to defeat the purposes of the Edmunds-Tucker Act properties had been transferred to stakes and private individuals and the deeds fraudulently backdated. After considerable prodding, the Church treasurer surrendered 800 shares of stock in the Salt Lake Gas Company, which he held in trust for the Church. In an action similar to Mr. Wisan’s purchase of the Harker Farms, Dyer turned around and sold to himself and his attorneys, as businessmen, 913, shares of stock in the company, the controlling interest. A victory in this instance led Dyer and his attorneys to press for the surrender of building equipment, furniture, and other properties in the hands of the Presiding Bishop; and after gaining this property, they instituted separate suits in territorial district courts for the surrender of all real and personal property they thought had belonged to the Church prior to the passage of the Edmunds-Tucker Act. 

 

In June of 1888, the Church entered into a compromise whereby they would pay to the receiver $157,666.15 for dismissal of all pending suits with the understanding that no further claims for properties involved in the suits would be made. Dyer made another claim for $268,982.39 in tithing property transferred to stake associations on February 28, 1887. In a second compromise, the Church agreed to turn over $75,000 worth of cattle or cash along with the previously agreed sum. Additional property also was demanded and surrendered so that by July 14, 1888, the receiver had taken possession of over $800,000 worth of Church property. In spite of these losses, the Church strategy of transferring out its property was at least moderately successful since the receiver only took about a third of the value of the property belonging to the Church at the time of the Edmunds-Tucker Act. In particular, he did not gain possession of Church bank stocks or holdings in the ZCMI.[viii]

 

As compensation for his services as receiver, Marshal Dyer requested $25,000 a year for himself and $10,000 a year for each of his two attorneys. Concerned that the value of the property would be depleted on fees for the receiver and his attorneys and other incidental expenses, Judge Charles S. Zane filed a petition claiming that the fees were “grossly exorbitant, excessive and unconscionable.”  He also claimed the following conflicts of interest in the management of the receivership:

 

1. Dyer retained his position as marshal when the United States was a party to the suit. Theoretically the receiver should be free of any prejudicial connection with either side of the suit.

3. U.S. District Attorney Peters was Dyer’s other attorney, whereas the rule was that an attorney for a receiver must not be engaged by either party in the suit.

 

 

The Church appealed the escheatment of its property to the United States Supreme Court, which on May 19, 1890, rendered a five-four decision holding that the power of Congress over the territories gave it the right to repeal a charter of a corporation and that in doing so Congress and the courts had the right to seize the property of the corporation. Although the ruling was unfavorable to the Church, it did focus national attention on the actions of the receiver, and when Senator Edmunds and the Committee on Territories began examining the situation, they were alarmed at the dissipation of funds. 

 

In a letter to the Attorney General, Senator Edmunds wrote, “I am very much afraid that the conduct of the affairs thus far in respect to the receivership and the operations conducted under it, has been scandalous and unjust to the fund, to whomsoever it may belong or to whatsoever use it may be applied.” He suggested that the Attorney General investigate the “astonishing” amount being paid in fees to the receiver and his attorneys. 

 

The Attorney General requested information from Charles S. Varian, U.S. Attorney in Utah, who wrote in reply that expenses had depleted the receivership almost $53,000 and that the government had not been represented when the territorial district court took testimony on the compensation for the receiver since the U.S. District Attorney was appearing as an attorney for the receiver and in his own behalf. He also noted that the receiver had used $11,000 of the fund for his personal ends although he had since returned this amount with interest. “As at present advised,” he wrote, “I agree with Senator Edmunds, that this entire proceeding has been and is a scandal upon the administration of justice, and I shall use my best endeavors to arrest further raids upon this Trust Fund, and to put its administration into more competent hands.”

 

On July 14, 1890, four days after Varian wrote this letter, Marshal Dyer resigned his position as receiver. Dyer was replaced by Henry W. Lawrence, an apostate Mormon, but his fees were set at $250 per month and his attorney’s fees at $150 per month.[x]

 

 

---