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Mon., 27 Mar., 1950:
“Albert Bowen telephone relative to Memorandum address to the First Presidency dated March 22, 1950, referring to the ‘Holt Administrator vs. the Church.’ This refers to the Eliza J. Holt property left to the Church, and now claimed by her heirs. In the memorandum Albert R. Bowen states that the lawyer handling this case for the heirs is now asking for a compromise settlement in the amount of $4000. Due to the character of the attorney handling this case, and other facts as set forth by Brother Bowen, I told Brother Bowen that the Church should make no compromise whatsoever. President Clark also concurred in this decision.”
Fri., 31 Mar., 1950:
“At 4 p.m.–Met Claude Petersen, secretary to the Council of the Twelve, at his request. He came down to make an appeal for a secretary for Brother Harold B. Lee. I referred him to the Committee on Adjustments of Salaries–Bishop Joseph L. Wirthlin and Frank Evans.
The reason Brother Petersen came to me was that I had expressed myself as thinking that the Council of the Twelve had a sufficient number of secretaries already–six girls and a supervisor of secretaries, Bro. Claude Petersen.
Brother Petersen said that inasmuch as they had moved offices of Brother Lee and Brother Sonne, also Brother Clifford Young, into the rooms formerly occupied by the First Council of the Seventy, he felt that they would need a receptionist as well as a secretary. I said I thought there was no need of a receptionist; that the man at the elevators could direct people where to go. I said that the only reason I could see that we employ another secretary at this time is that two of the girls in the Council of the Twelve offices are planning to be married, and inasmuch as the Church does not hire married women, that this new girl could take the place of one of these girls. I said that although there are a few married women in the building, it is against the policy of the Church to employ married women.”
Thur., 8 Jun., 1950:
“Returned to the office and dictated letters which I have been trying to answer for three or four days but have met with constant interruption. However, even this time I was not successful, as no more than one letter was dictated than Clarence Williams, reporter of the Telegram came in to discuss with me the story he had written and published in the Telegram regarding the Church’s decision to accept no applications for new chapels until 1951. I told Clarence that this is a matter that he will have to take up with Bishop Richards and President Clark, that I have had nothing to do with the matter.
Later, I called Bishop Richards and learned that it is a question of Clarence’s not having informed Bishop Richards that he was going to run a study on this matter, and Bishop Richards said he had no idea that Clarence would quote him.”
Wed., 11 Feb., 1953:
“[First Presidency meeting] I expressed the though at this meeting that as an experiment we should start out with two or three stakes an tell them to instruct their people to pay one-tenth of their income annually as tithing and to pay their fast offerings faithfully, and that there would be no other cash requirements, excepting only contributions toward the building of meeting houses and to the missionary fund; that the Church would take care of the Ward Budget, the Welfare and other incidentals.”
Tues., 19 May, 1953:
“9 a.m.—Met by appointment in the First Presidency’s meeting Miss Pierce, Executive Secretary of the Y.W.C.A., and Mrs. Lavina Brown, a member of the Board of Directors of the Y.W.C.A. They discussed their campaign to raise $400,000 to provide necessary improvement in their buildings. Said they had received some very generous gifts and were hoping the Church would be willing to give their generous support. They expressed hope that the Church would match their largest gift. In the course of the interview they said one man had contributed $33,700. We explained that the Church is building 400 chapel a year besides a $3,000,000 Temple in Los Angeles, and taking care of our own need in the Young Women’s M.I.A. and the Relief Society, etc., that the Relief Society is going to build a new building. We explained that business companies in which the Church is interested will no doubt be solicited also. They said they wanted to have this conference with the First Presidency before going to the other Church institutions. We told them the business enterprises stand on their own footing.
Mrs. Pierce explained that this is a community enterprise and that many of our own people participate in the use of their facilities; they have many of our workers active with them, two of our people, Mrs. Garff and Mrs. Dewey are on their board, and that because of the large support our members give to the Church it is difficult to get them to contribute to other enterprises. In answer to inquiry they said that a majority of the girls at the Y are between 17 and 25 and that they pay $11 to $12.75 per week for room and board. They have forty beds and that is not adequate to take care of those who need their service.
I explained that the Church has an organization looking after girls who come to the city form the country to work, who do not apply to the Y.W.C.A. Mrs. Pierce said that their Mrs. Poulson is constantly in touch with our Bee Hive House residents. They explained that the Y gives opportunity for girls to meet others under the same circumstances and gives them a security they do not have in hotels. They do not permit drinking of beer or liquor, but do permit smoking. In answer to a question from Pres. Clark, they said they permit boys and girls to swim together and the Negroes are permitted to go into the pool with the white girls and also to dance with the white girls. They said that they have many service men come there for entertainment, both white and colored.
We said we would take the matter under advisement.
Tues., 30 June, 1953:
First Presidency’s meeting
Henry D. Moyle, Delbert L. Stapley and Bishop Wirthlin called on the First Presidency and discussed with them centralized accounting for the church. They recommend that George Jarvis be appointed Comptroller, Rulon H. Tingey as Treasurer, and Kenneth Frost of the Presiding Bishop’s Office as the non-mechanized accounting manager. Brother Casto would be the Administration assistant. It was felt that the Treasurer and Auditor should come under the appointment of the First Presidency, and it is suggested that Brother Murdock be the Auditor. Bro. Jarvis would correlate the work of the Treasurer and the Auditor but would have no control over them only to the extent of correlating their work. It was proposed that the plan go into effect August 1.
It will mean the transfer of approximately 55 employees form where they are employed under the supervision of these brethren. They will come from the Presiding Bishop’s Office, the Welfare, and auxiliary organizations. It also contemplates that before we get through we will cut down the number of employees engaged in this sort of work by at least 25. That is one reason they would like to start it gradually. I also gives them an opportunity to train these people. No disbursement is to be made without authorization by someone outside of the department. It is likely that as we work into it there will be some changes.
Thurs., 3 Sept., 1953:
Note: At 8 a.m. According to appointment at his request, I met Mr. David A. Robinson. He expressed the hope that my associates and I would see fit to give careful consideration to the purchase of the Deseret Live Stock Company before being offered to some Texas and Arizona millionaires who have been negotiating on it.
Told him that I would discuss it with the brethren at our next meeting. (Later, the brethren decided that they are not interested in the purchase of this company)”
Thurs., 10 Dec., 1953:
“At 9 a.m. attended the regular meeting of the First Presidency.
Among some of the items discussed were the following:
2. Discussed contributions by members. I said that I am ready to take the step that we pay our tithing, fast offerings, missionary fund, and building fund. I think it should be tried out in one or two stakes. I stated that Welfare projects are investments and we would have to work out how they would be handled and what to do with that income.
Thurs., 15 Apr., 1954:
“From 9 to 9:50 a.m. The regular meeting of the First Presidency was held.
Contributions to the Church I presented a letter which I had received signed ‘Mrs. Smith’ of Ogden, Utah. In it Mrs. Smith complains because of so many financial demands being made upon members of the Church. In this connection the Brethren called attention to a printed form that is sent out to the wards listing the various contributions. The Brethren felt that we are making too many financial demands upon our people and that some could and should be eliminated.
Wed., 21 Jul., 1954:
8:30 a.m. – Met by appointment Elder Henry D. Moyle and Bishop Joseph L. Wirthlin and Vernon Snyder. They presented an important matter. It appears that the Corporation of the President is an employer, but is not self-insured and does not come under the Workman’s Compensation Act. The Presiding Bishopric is thus insured. If the Corporation of the President were sued there would be no limit to what the injured person could sue for, whereas in a suit against the Presiding Bishopric the limit is prescribed by law. The question is this: If the Corporation of the President continue to be the employer of all these people, then the Corporation of the President should take steps to come under the Workmen’s Compensation Act Insurance, otherwise they should authorize the Presiding Bishopric to employ all these people. They made no recommendation.
President Clark said he would be a little fearful about the Presiding Bishopric taking it because that is not really the fact. The fact is that we are the employer. I said that I favored letting the Corporation of the President take steps to come under the Workmen’s Compensation Act Insurance. President Clark mentioned in this connection that if we do so it will give the government the right to come and examine our books.
Fri., 31 Dec., 1954:
“10:30 a.m. – Met by appointment at my request President Ernest L. Wilkinson, President of the B.Y.U., and Dr. William F.. Edwards called by appointment at my request.
I stated to them that the First Presidency would like to have Brother Edwards, who is an expert economist, make a special, confidential study of our system of central accounting of receipt and disbursements of church funds and make a report to the First Presidency of recommendations, if any, of improving the present system.
Brother Edwards stated that the job is too big for any one man, and that he would like to have the assistance of two expert accountants. To that we agreed, and I promised to get in touch with President Wayne E. Mayhew in the Berkeley Stake Presidency, and Dr. Clyde Randall, head of the accounting department at the University of Utah.
Later, I reached President Wayne E. Mayhew in San Francisco. I had tried all morning to contact him, and Brother Mayhew explained that he had been in the dentist’s chair during the time I was trying to reach him.
I told Brother Mayhew that the Presidency would like to have him work with Dr. William F. Edwards of the Brigham Young University in making a thorough, confidential study of the Church’s central accounting system. Told him that we had recently changed from a Ward and Stake, and general basis, to a central financial organization. Said that confidentially I am not sure that it doesn’t need revising, and that if he, Brother Mayhew, would accept the responsibility we should like him to work with Dr. Edwards.
Brother Mayhew stated that he felt it an honor to be asked to serve in this capacity. I told him that Dr. Edwards would get in touch with him relative to further details. I further stated that I was giving him this advance inforamtion so that he would have time to straighten out his own affairs. I told Brother Mayhew that I am leaving in a day or two for the South Seas.
I then extended best wishes for a happy New Year to Brother Mayhew and his family, who in turn wished me well on my journey, and prayerful wishes for my safe return.
Following the conference with President Wilkinson and Dr. Edwards, I had a brief consultation with Brother George Jarvis of the Central Accounting Department, and told him that there is a great responsibility connected with the financial department of the Church, and that we should be sure that the centralized system now presently operating is best for the Church. Brother Jarvis then tried to point out some of the troubles which they have encountered. I then told Brother Jarvis that we are having experts examine the overall system in order that we might know where we stand in this department.
Tues., 1 Mar., 1955:
“8:45 a.m. Met by appointment at his request Brother William F. Edwards on his assignment to make a professional inspection of the Church’s accounting system, and report of his findings and recommendations to the First Presidency.”
Fri., 29 July, 1955:
“8:30 a.m. consultation with Dr. William F. Edwards regarding his study of office space on Fourth Floor – salaries of employees – recommended a re-examination of general salary levels, especially a consideration of salaries in relationship to responsibility and quality of work. Church Purchasing Department – should be change in procedure – examples of inefficiency that could be corrected – hospital orders – equipment purchased for schools – Warehouse could reduce inventory – Church purchasing department functions – dynamics of Church growth – were among items discussed.”
Mon., 25 June, 1956:
Note: – Tithing Increase in the Church
Was interested to learn from a letter signed by George Y. Jarvis, Comptroller, Church Financial Department, that the percentage of increase in collections of Tithing 1956 over 1952 is 65.9%! Truly, the faith and integrity of the people and the growth of the Church give cause for rejoicing and thankfulness!!”
Wed., 7 Nov., 1956:
Wednesday, November 7, 1956
Telephone Conversation with Dr. William F. Edwards, Tuesday, November 6, 1956.
I called Dr. William F. Edwards at B.Y.U. and told him that we felt it would be a good thing if he would give to the three Presidents of our banks the facts connected with the present small earning power of these institutions.
Dr. Edwards stated that the men were acquainted with the figures as they had secured the figures for him.
I asked Doctor Edwards if these men realize how little they have made at the banks. Dr. Edwards said that it might be a very good thing to let them see the final charts, etc. he had worked out.
I told Dr. Edwards that he gave a very impressive picture on this phase of the work and that I wanted him to know that I appreciated his work. Dr. Edwards told me that he felt that Brethren here were entitled to the best assistance.
I asked Dr. Edwards about compensation for the work he has been doing for the Church. Dr. Edwards said that he had incurred expenses that he had charged against the Church in the amount of $1,000.00 for the two years that he had been making the Church survey. He felt that this was all that he is entitled to. I told Dr. Edwards that I would see him again on this matter as I should prefer it not being this way, because his services have been invaluable to the Church.
It was decided that Dr. Edwards would be in Salt Lake the following Thursday, November 8th. He stated that he would have the bank figures with him, and would be available on Thursday at 3:30 p.m.”
Thurs., 8 Nov., 1956:
“3:30 p.m. Dr. William F. Edwards reported to the First Presidency his investigation of our Financial Organizations and the Welfare organization, etc. Brother Edwards has done a masterful job, he and his associates, and the presidency expressed to him their deep appreciation for his services. He has asked no financial remuneration for his labors, although he spent hours,days, and weeks in this work.
Yesterday, at the First Presidency’s suggestion Brother Edwards met with the managers of our three banks and presented to them the detail of recommendations which he gave to the First Presidency. He later reported that his meeting with these brethren was in every way satisfactory.”
Wed., 14 Nov., 1956:
3:30 p.m. Conference with Dr. William F. Edwards
Dr. Edwards has just completed the investigation of our financial organizations, and has made his reports to the First Presidency. I told him that we now express our appreciation of his labors, and that he and his associates are released from their assignment with the gratitude, appreciation, and commendation of the First Presidency.
I said to him: ‘It is not our duty to put all of your recommendations into effect – the reorganizations to be made, etc.’ I then said ‘Brother Edwards, if I were you, and you were I, and you desired to place me in a position in the Church where your recommendations could be most effectively adopted for the good of the Church, where would you put me?’
Dr. Edwards answered: ‘I usually try to answer your questions, Brother McKay, but I cannot give an answer to that.’
I said: ‘I want you to be confidential with me now and help me work this out.’
We then spent an hour going over some of the Church’s problems.”
Telephone Conversation with Dr. William F. Edwards, Wednesday, November 14, 1956.
I called Dr. William F. Edwards by telephone. He stated that he had received the letter regarding the banks. Upon receipt of this letter he had immediately made telephone calls and had arranged to meet with the brethren involved at 1 p.m. today in Salt Lake. Dr. Edwards asked me if I had any instructions to give him in this regard. He stated that he had a set of graphs prepared to give to each of the brethren. He will discuss the graphs with them and any other questions they may have. Dr. Edwards stated that after this meeting he would report to me.
I told Dr. Edwards that I would like to meet with him personally and asked him to come to my office today at 3:30 p.m.”
Thurs., 15 Nov., 1956:
Telephone Calls
1. Dr. William F. Edwards called from Provo this morning and left the following message:
‘The title for the assignment you have in mind that I think would be proper is: (first choice) Church Financial Administrator (second choice) Church Financial Advisor
Tues., 20 Nov., 1956:
“At the meeting of the First Presidency today the matter of church bank merger was considered, including the principle of branch banks with relation to merger of banks. Also considered was the status of the Utah Savings & Trust Company and the offer made by Herbert Snow with relation to it. After consideration, it was agreed that Brother William F. Edwards’ opinion on these matters be heard. I shall ask him to consider the matter and to present his views to the First Presidency upon my return from the East. (see telephone conversations with Dr. Edwards Nov. 6 and 14 and also note on November 8, 1956)
Nov. 21, 1956 to December 1, 1956
Trip to Chicago, Illinois, Jacksonville, Florida, and Orlando, Florida – November 21, 1956, to December 1, 1956
Wed., November 21, 1956
“At the railroad Station, according to previous arrangements, I met Brother David M. Kennedy, first counselor in the Chicago Stake Presidency, Vice-President of the Continental Illinois National Bank & Trust Company, one of the six largest banks in the United States.
I discussed with Brother Kennedy (1) Church Bank matters, including the advisability of the Church banks joining Trans-American Banking Corporation through the Walker Bank. Brother Kennedy, who is a nationally recognized authority on banking, does not favor the Church’s making such a merger. He thinks our better opportunity would be to keep our banks independent of these larger companies.
(2) Brother Kennedy does favor our merging the three church banks – First National, Zion’s Savings Bank & Trust Company, and Utah Savings & Trust.
(3) He does not favor selling to Herbert Snow the Church stock in the Utah Savings & Trust Company. ‘By doing so,’ said he, ‘it makes it possible for Herbert Snow to resell to the merger and double his money.’
(4) Brother Kennedy informed me confidentially that he had just been offered the position of President of the Continental Illinois National Bank & Trust Company of Chicago, and he said that at the meeting the next day he was going to tell the Board he would accept the position.
Tuesday – Wednesday – and Thursday – November 27, 28, and 29, 1956 were spent riding over the 210,000 acres of the Orlando Ranch.
I found that the improvements on the Ranch since my last visit five years ago are remarkably outstanding. We owe most of them to Brother Leo Ellsworth, a multi-millionaire in his own right, who is contributing his time to the development of this ranch. He is doing a marvelous work by his own choice, refusing any compensation for his services. He is leaving to the men in his organization the conducting of his own holdings in Arizona, which amount to millions of dollars. He sees the possibility of making the Orlando Ranch the greatest cattle ranch in the United States, and to that end he is removing trees by bulldozers, draining the land, building dikes, and putting in fencing. He has 200 miles of diking on which automobiles may be driven; and has put in over 1800 miles of fencing (4 wires, with cypress posts 12 to 14 feet apart), which fencing would stretch from Salt Lake City to Los Angeles and back!
The Ranch is being run with the least possible expense, and with the best feed for the cattle that can be obtained in that climate. Brother Ellsworth is proving that clover is a good feed, so he has just cleared 50,000 acres, and seeded it to clover. In its native state, it takes five acres to support one cow, but now the same five acres will support five cows! Instead of having 25 cowboys herding cows in the marshes, Brother Ellsworth has five cowboys, and they take care of more cattle than the 25 did, and they do it more efficiently.
There are 186 Brahma bulls and 3000 head of cattle, and Brother Ellsworth would like 3000 more. Eventually he plans for 50,000 or 75,000 head of cattle! He would also like to have permission to clear another 50,000 acres of land, and I told him to go ahead.
Brother Ellsworth is on the job at 6 o’clock every morning – he meets with 50 men and directs them what to do during the day. He is thrilled with the magnitude of this great undertaking, and is giving everything he has to it.
Sister Ellsworth takes care of the books and secretarial work for the Orlando Livestock Company.
This visit to the Ranch was one of the most profitable and interesting visits I have ever made in my life!
Thurs., 13 Dec., 1956:
“At 8:30 a.m. met by appointment at his request, George Eccles, President of the First Security Bank.
He stated that he is concerned about some of his Branch Banks, particularly down in Cedar City. Some prominent citizens down there who favored the establishing of a Branch Bank by the First Security have now changed and are advocating the establishing of a local bank, so George is concerned about it because there isn’t room for two banks in that little place.
I suggested that we get in touch with the President of the Stake who is one of those who is objecting to the Bank and ascertain just what has changed his mind.
We then discussed the proposed merger of the Church banks. George said: ‘Don’t go with the Trans-American Corporation – if you are going to sell out to the chain banks, come with the First Security. We are your ‘home boys’.”
Thurs., 10 Jan., 1957:
Telephone conversation with President Stephen L. Richards, Thursday, January 10, 1957.
“President Stephen L. Richards called me by telephone and stated that the doctor feels it would be advisable for him to remain at home to-day. I told President Richards the sound of his voice confirms that opinion. President Richards stated that his voice is better than it was, but he has a deep cough. However, the doctor thinks he will get well soon if he gives him some penicillin. I told him to miss the meetings to-day and that he has our united faith and prayers. President Richards thanked me and said that he would return to work just as soon as possible.
I mentioned to President Richards that I had just concluded a half hour’s conference with Dr. Wm. F. Edwards. Indications seem to be favorable that we will be able to work some of our present problems out.
Brother Richards again thanked me, and I said, ‘The Lord bless you this morning, my dear brother.'”
February 15, 1957
February 15, 1957
PERSONAL AND CONFIDENTIAL
Mr. Orval W. Adams, Executive Vice President
First National Bank of Salt Lake City
Mr. Wendell M. Smoot, Executive Vice President
Zions Savings Bank & Trust Company
Mr. Herbert A. Snow, President
Utah Savings and Trust Company
Salt Lake City, Utah
Dear Brethren:
We have given further careful consideration to the recommendation for the merger of the banks. It is our present feeling that, considering the three banks as a group and the relationship of the Church to the banks, we might adopt this recommendation, and also that a merger should be consummated at the earliest practical date.
Brother William F. Edwards, who, as you know, has made the investigation and submitted to us his report in this matter, has been appointed to represent us in working out the details of the proposed merger. He suggests as a first essential step in the program the retention of a lawyer with experience in such matters. There will arise in connection with the engagement of an attorney such questions as to whether he should represent the majority stockholder, the banks individually, or the merged organization. Brother Edwards will discuss this matter with you and will then report to us, after which the retention of an attorney will be undertaken. When some attorney is selected, of course the whole matter will be guided very largely by legal advice.
We confidently hope that we may have your full support and cooperation in bringing about the merger of the banks, which we are convinced will serve to solve some pressing problems and result in lasting benefit to the banks as a group, and to the position of the Church in relation thereto. We are persuaded that minority stockholders will have no justifiable objection when they are made acquainted with the advantages and benefits that they have long derived from Church support of the banks, and the future prospects of the merger.
You will please keep this matter confidential as it is our thought that public announcement of this decision be deferred until after consultation with the attorney, and agreement on the best feasible time and plan.
With very kindest personal regards, we are
Sincerely your brethren,
David O. McKay
Stephen L. Richards
J. Reuben Clark, Jr.
The First Presidency
R:S”
Tues., 19 Feb., 1957:
Telephone Conversation with President Stephen L. Richards, Tuesday, February 19, 1957.
“President Richards called me from Boulder City, Nevada where he is on vacation. He said that he is feeling pretty well and enjoying a nice rest and that the weather is excellent.
President Richards said that he thought the letter we had revised to send out on the bank merger would suffice. He wondered if the words ‘present feeling’ introduced into the letter will be interrupted as indecision. President Richards stated that he did not want the brethren at the banks to feel that we were undecided in any way. I told President Richards that I think we could counteract any feeling they may have regarding that. However, President Richards said that the balance of the letter counteracts any question in this direction. I mentioned to President Richards that I had just given the letters to LaRue and directed her to send them out if we did not hear from him, and I said that we would now send them out.
Wed., 20 Feb., 1957:
“Bank Merger and Rumor re: End of World
I reported at the meeting of the First Presidency this morning my telephone conversation with President Richards, who expressed himself as being agreeable to the release of letters to the heads of our Church Banks regarding the merger of the banks.
February 26, 1957:
Dr. Wm. F. Edwards’ acceptance of appointment
to serve as Financial Secretary to the First Presidency
BRIGHAM YOUNG UNIVERSITY
Provo, Utah
February 18, 1957
The First Presidency
47 East South Temple
Salt Lake City 1, Utah
Dear Brethren:
It is with a very humble spirit that I accept the assignment as Secretary of Finance to The First Presidency.
I will be available on the equivalent of a full-time basis starting Monday, March 4. President Wilkinson gives his approval to this date with the understanding that, for the period needed, I will assist at the University Friday afternoons or evenings and part of Saturdays. Until after our children are out of school, it will be my plan to come to Salt Lake Monday morning and remain until Friday, thus providing many hours to work that would otherwise be consumed in travel.
I can make myself available on a limited basis to initiate the bank merger immediately after your letter is received by the bank officials. I could also be available, when and if you desire, for a meeting to resolve certain issues regarding Welfare, which is urgent especially if you contemplate any organizational changes by Conference time.
It will increase my efficiency and permit me to accomplish the maximum amount of work if arrangements are made by March 4 for satisfactory office facilities, if a budget is approved so that I can acquire certain office equipment and supplies and employ a secretary-assistant, and if you give me a number of assignments. Because of the time frequently involved in gathering information and preparing material, it is usually desireable to work on a number of assignments concurrently.
I pray that I may have the skill, the wisdom, the energy and the faithful devotion necessary to render the assistance you seek in making this appointment.
Very sincerely your brother,
/s/ William F. Edwards
WFE:md
Tues., 3 June, 1958:
“1 p.m to 2:10 p.m. – Dr. William F. Edwards came in for consultation — see notes following. (see item regarding growth of Church on page 223 of Dr. Edward’s report following)
Activity Log
Week Ending June 7, 1958
Conference With President David O. McKay
June 3, 1958
I met with President McKay Tuesday morning about 12:15 until 2:00 subject to a brief interruption. We cleared a number of important matters.
1. 1957 Annual Report, in Brief
This was the first opportunity to review with President McKay the 1957 Annual Report that was prepared in March. It was President McKay’ desire that we go through the report together and then a copy was left with him for each member of the Presidency.
I shall highlight most briefly the significant information:
a. There has been an excess of ordinary income over all budget expenditures each year since prior to 1951, the excess for 1957 amounting to $6,128,000, and for the 7 years 1951 through 1957 the cumulative excess has been $46,816,000.
b. The report contained a summary of cash flow, there being substantial net demands for funds in carrying out the programs of the Church beyond those reflected in the budget as now presented. On a cash basis, there has also been an excess each year since prior to 1951. The excess for 1957 amounted to $2,558,000 and the cumulative total for the 7 years 1951 through 1957 amounting to $41,431,000.
c. The Church has made substantial investments in Orlando Livestock Company, Zions Securities Corporation, and other Church-related companies totalling $24,480,000 during the 7 years 1951 through 1957. After these investments, there has been a surplus every year except 1957 when there was a cash deficit of $6,064,000. The cumulative surplus after net investment totalled $16,952,000 for the 7 years 1951 through 1957.
d. As of December 31, 1957, total of cash liquid reserve amounted to $100,427,000. As of that date, there were funds held by the Corporation of the President for others in the amount of $4,941,000 and there were unspent appropriations totalling $23,982,000, making total obligated funds of $28,923,000. After subtracting these obligated funds, there remained net cash liquid reserves of $71,504,000. In addition, there were networking funds with missions, temples, etc., totalling $2,742,000. This gives a total net cash liquid reserve and working funds and funds in foreign missions of $74,247,000.
e. The report includes an analysis of the maturity dates of the commercial paper and U.S. Government Securities of the reserve investment account as of March 31, 1958. The cost value of the account was $90,939,000 and the market value of the account was $92,292,000. The report showed that the portfolio is currently yielding at the annual rate of about $2,400,000. However, income for 1958 will be less because of the decrease in interest rates and the resultant lower yield on new purchases and the expected withdrawals during the year to finance authorized expenditures.
f. The report also included the review of 10 significant improvements in financial procedures during 1957.
2. Record of Contributions
I informed President McKay of the work we are now doing on procedures to develop equal control and equally good records over contributions of the Saints in all of the foreign missions comparable to that now in effect for the Saints in wards and North American Branches. President McKay expressed his strong approval of such a program. Our plan is to have the procedures developed and to initiate them at the time the auditors visit the various foreign missions.
3. 1957 Audit of the Corporation of the President
I reviewed with President McKay briefly the conclusion of the auditors and introduced him to the extensive report submitted to my office by the auditors. This is probably the first genuine detailed audit that has been made of the financial records of the Corporation of the President, excluding the Confidential Books. All questions raised in the Audit Report will be thoroughly investigated by my department and the Church Financial Department. We are able to assure the President that, subject to a number of adjustments yet to be made, the books are in order.
4. Deseret News Executive Committee
In connection with the study of management of the various companies controlled by the Church, it was pointed out that Deseret News was the only company operating without an Executive Committee. I have discussed this matter with Elder Mark E. Petersen, President of Deseret News, and he feels that the organization of such a committee would strengthen the management. This was one management change that we discussed previously with the First Presidency that time had not permitted taking action. President McKay signed a letter addressed to Elder Petersen authorizing the creation of such a Committee.
5. KSL
The First Presidency had referred to me a question of which TV Station should broadcast the June Dance Festival and also an assignment to make a very thorough study of KSL. After full investigation, I recommended that KSL broadcast the Dance Festival and this was approved by President McKay. I also informed him of the progress that has been made in carrying out the basic study. It may take a period of two to three months before this is completed and, in the meantime, I ask that the First Presidency keep an open mind. Naturally the First Presidency has a right to be deeply concerned over the fact that earnings have decreased from $119,000 four years ago to the nominal figure of $1,600 for 1957.
6. Legal Department
Previously I had made a thorough study of the Legal Department at the request of the First Presidency. I informed President McKay, or rather I brought President McKay up to date on the new procedures now being followed by which the Legal Department prepares and signs most of their own letters. This relieves the First Presidency of a minimum of 50 to 100 letters per week. At the request of President Richards and President Clark, I review the mail of the Legal Department and President McKay indicated his desire that I continue to do this, at least for the present.
We then discussed the heavy backlog of pending work of the Legal Department. I have reviewed this very carefully and I am entirely satisfied that the Legal Department needs one additional lawyer, one ‘Clerk’ Assistant, and the necessary additional secretarial assistance. The employment of these additional people was anticipated in the 1958 budget. A question was raised as to whether the Legal Department was efficient and as to why it should need the additional staff. I pointed out to President McKay that during the past four years alone there have been created as many new wards as the growth during the administration of President Heber J. Grant from 1918 to 1945. Each new ward increases the responsibility of the Legal Department as well as the Church Financial Department and other areas. President McKay gave his approval to the recommended increase in staff of the Legal Department and authorized me to convey the information to Brother Snyder.
7. University of Utah Medical Center
I gave President McKay a brief progress report on this important project of the University. I have discussed the matter with Clarence Wonnacott. I informed him of the efforts the University was making to have me accept an assignment on a special committee working with this project. I recommended that the Church keep a friendly interest and yield a modest influence over the development of the project in order that there will be developed a good working relationship between the LDS Hospital and the Medical Center. I felt that for me to be a member of the Committee would be more direct approval of the project and participation in its development than would be desirable. I recommended that Brother LaMar Webb, Senior Vice President of Zions First National Bank and the expected President at the retirement of Orval Adams and a graduate of the University of Utah, be recommended as a member of the Committee in my place. This would give a degree of support and yet not official sponsorship. President McKay concurred in this recommendation and I shall follow through by speaking to the proper representatives of the University and have them extend the invitation to Brother Webb.
8. We presented a report showing 1958 income. Tithing contributions through April are averaging about 9% ahead of a year ago. Other income will be increased considerably because of the larger earnings on the investment of reserves. It now appears that the income for 1958 will be in the area of $2-1/2 to $3 million more than estimated in the budget.
9. Advances to Wards and Stakes
President McKay again expressed his concern over the large increase in the number of advances. I expressed a desire to see a quarterly report on the status of the advances that would keep us informed as we are informed as members of the Executive Committee on the condition of the loans of Beneficial Life. President McKay expressed a strong desire that such a report be prepared and that the summary of the report be brought to the Committee on Expenditures. I shall report this to the Building Committee.
Meeting with President McKay — Z.C.M.I.
In view of the importance of the recommendation of the Executive Committee of Z.C.M.I. that the Company remain in the Wholesale Business, I felt it was important to meet with President McKay as Chairman of the Board before the matter went to the Board for their consideration. I pointed out to President McKay that in contrast to the 1957 deficit of $52,200 the management estimates that there will be earnings of $100,000 for 1958, at least $200,000 for 1959 and by 1961 earnings should be up to $400,000. Concurrent with the improvement of earnings, the management estimates that it will be able to reduce the average investment in accounts receivable inventories from $4,785,000 for 1957 to $4,255,000 for 1958 and $4,100,000 for 1959.
The estimates of earnings appear possible of achievement. In view of the willingness of the management to accept the challenge of achieving this improvement, and the satisfactory level of earnings that would be established if these estimates can be achieved, the Executive Committee recommends that the Board support the Wholesale Division. President McKay agreed that if this improvement is in prospect, the Wholesale Division should be continued. It takes years to build up a business of this size but it can be destroyed in weeks. President McKay observed that the decision to continue the Wholesale Division could be reversed at any time it was considered wise to do otherwise. I was authorized by President McKay to inform President Clark of his favorable attitude toward the recommendation if it has the approval of the Board. Also, President McKay, as Chairman, approved of this matter of business being brought to the Board at its meeting 2 weeks hence.
Responsibility of Church Leadership When
Heber J. Grant George Albert Pres. %
Became President Smith Became McKay Increase
1918 President 1945 1957 Frm. 1918
Church Mbshp 495,962 979,454 1,488,314 200%
Missions 22 38 45 105%
Stakes 75 155 251 235%
Wards & Indep.
Branches 839 1,295 2,362 182%
Church Income Over
1,000%”
Wed., 25 June, 1958:
“Activity Log By Dr. Wm. F. Edwards, June 25, 1958
Week Ending June 28, 1958
I felt urgently the need of having a conference with President McKay and President Richards before meeting with the Executive Committee and the Board. This desire is consistent with my policy of always clearing with the Brethren major policy questions where they may have a strong desire that we might appropriately reflect that desire before we meet with formal groups. Although President McKay was not yet receiving visitors, he made himself available for about 30 minutes at noontime. I outlined my study. President McKay gave a full vote of confidence in whatever approach was adopted. He expressed his hope that things could be worked out so that Layton might terminate its existence graciously. He feared that from a long-term point of view the handwriting was on the wall. He said he had feared this for a long time and his hope has been that we could find a way of protecting fully the loan of the Church and of salvaging as much as possible for the stockholders and making whatever adjustments were needed with as little offense as possible. He gave his approval to tolling if that was considered desirable.
Meeting with the First Presidency
At my meeting with President McKay, two items were considered:
A. ZC.M.I.
This was my first conference with President McKay since the unfortunate experience at the Board Meeting last week. I took the occasion to let President McKay know how unfortunate I felt that development was for the suggestion to be made that the action of the Board should be referred to the First Presidency with the First Presidency making the final decision, or in otherwise exercising the right of veto and for President Clark to state that the matter should be referred to President McKay and President Richards and for him to counsel Harold to approach these Brethren was 1) informing the Executive Committee and the Board that they were not truly the elected and appointed representatives of the stockholders with the right to conform their legal responsibilities but that their decision were binding only when the First Presidency did not wish to prevail. 2) It was informing Harold Bennett that he had better be careful in working with me as the Secretary of Finance because I did not have the authority or the right to speak on behalf of members of the First Presidency and that anything I might do might be overruled by the First Presidency.
President McKay was greatly disturbed. He said he felt it was terribly unfortunate. He said that the Board of Directors must be responsible for basic policy decisions and that the First Presidency must not overrule, must not veto the Board. He said that the Board must know that it has the responsibility. After all, the Church does not have the complete ownership of the Company and as long as there are minority stockholders, the Board should be the body that makes the decisions. This is consistent with the point of view I have presented. I take the position that the Brethren should be consulted on all matters that might be particularly important to them which can be done in their positions as Chairman and Vice Chairmen, but these conferences should be held in advance of meetings of the Board and nothing should be brought to the Board unless the Chairman and Vice Chairmen are willing to agree with the decision of the Board. I have consistently tried to bring matters to the First Presidency so that I knew their desire on problems. I have frequently held back from making a decision as a member of an Executive committee if I was in doubt as to the position that seemed wise in view of the interest of the First Presidency. Only in this way could I expect to help the First Presidency to the greatest degree and reflect the desires of the First Presidency. President McKay made it very clear that he hoped there would never again be such an experience and that he would seek an opportunity of clarifying the responsibility of members of the Board. My position is that the Board, once elected, must be supported and if at any time members of the Board are not considered qualified to represent the interests of the stockholders, then the stockholders should resort to their rightful position by electing new Board members.
B. Layton Sugar
There was the discussion of Layton Sugar that I have recorded previously. President McKay gave full approval to any program that could be worked out that would resolve graciously the problems of Layton Sugar.
I now shall outline briefly the points that were considered with President Richards:
A. Z.C.M.I.
I also expressed to President Richards my feelings toward what happened with Z.C.M.I. I told him that such experiences definitely and seriously weakened the position of the Secretary of Finance and undermined the Executive Committee and the Board. President Richards felt basically the same way. I was satisfied that the report to the First Presidency by President Clark gave President McKay and President Richards a wrong impression as to the recommendation of the Executive Committee to the Board.”
Thursday, July 10, 1958.
Notes on Conference with President David O. McKay – by Dr. Wm. F. Edwards.
Thursday morning, July 10th, Elder Mark E. Petersen had arranged for a meeting with President McKay at 9:00 o’clock, and I was invited to participate. Subsequently, Elder Richard Evans joined us and then President McKay asked me to remain. I left his office about 10:25.
1. Deseret News
The purpose of the conference arranged by Elder Petersen was to review with President McKay problems that might develop with the passing of John Fitzpatrick from the management of the Tribune. A memorandum had been prepared by Brother Petersen and myself. Elder Petersen made the presentation and a memorandum was read. In conclusion, President McKay gave him an assignment. Elder Petersen was to ‘spend a day or two fishing’ by going and having a visit with President Richards. President McKay felt it would be unwise for the Church to consider purchasing control of the Tribune and the two buildings owned by the Kearns’ interests, the Tribune Building and the Kearns Building. On the other hand, President McKay felt there might be great merit in attempting to encourage some friendly group to purchase control. Since this is a subject of special interest to President Richards, President McKay felt it was desirable that Elder Petersen confer with President Richards. The memo pointed out that the Tribune and the buildings would possibly cost in the neighborhood of $6,000,000.
2. Zions First National Bank
I informed President McKay briefly of the findings of the Bank Examiner. It is important that he know officially of the unfavorable criticism of the bank and the condition of some of the loans. The Bank Examiner had decided that he would require that at least $200,000 of loans would be charged off as if they were worthless. Thanks to the agressive leadership of Brother Webb the Examiner felt justified in transferring nearly $170,000 from write-offs to sub-standard loans. There is a serious problem, and the condition of some of the loans is unfortunate. However, there has been definite progress since the time of the merger and, from all indications, the ultimate loss will be less than what was allowed for in connection with the merger.
3. Layton Sugar
I gave President McKay a brief report on the developments in this situation. I informed him that at the conclusion of the Executive Committee Meeting and the Board Meeting, I felt that it was wise to recommend that Layton Sugar go forward operating its factory and processing this year’s supply of beets. I also informed President McKay that I have become greatly concerned over the management of Layton Sugar and I would be afraid over the consequences that would follow entering into tolling arrangements even though those arrangements would have the possibility of permitting the company to develop considerable value within 5 years. I would have much more confidence in the outcome if the responsibility could be with the managements of Amalgamated and Utah-Idaho Sugar. Therefore, I have already initiated conferences with Amalgamated and U and I in an effort to sell the assets of the business of Layton. I pointed out that there is a basis on which these companies could justify paying the price for Layton that would create an equity of some $500,000 in contrast to little or no equity at the present time. President McKay gave approval to the procedures being followed. He again expressed his desire that the problem be worked out and a way found for Layton to graciously withdraw from the business with the least possible loss to security holders and especially with full protection to the Church because of its securing the loans of Layton totalling, at the peak of year’s crop, nearly $2,000,000.
4. Utah-Idaho Sugar
President McKay asked how things were developing with respect to Utah-Idaho Sugar. I expressed confidence in Brother Wood. The indications are that the company’s management has been strengthened. I feel confident that the management reorganization was desirable.
5. KSL
President McKay also asked for a progress report on our study of KSL. I informed him that I had had two full-scale conferences with Jay Wright, General Manager. We have gathered substantial background information. Additional information is being compiled in the nature of three reports. It may be into September or early October before we will submit our report. Nevertheless, I have come to certain tentative conclusions which I expessed:
a. I feel that Jay Wright is worthy of full confidence and support. My tentative feeling is that we are fortunate in having Jay in this position.
b. I have received full cooperation from the management. They have attempted to furnish all the information that I have requested. I am sure that I can work well with Jay.
c. President Clark has talked with me about the study. He has indicated real concern. He has asked that I keep him informed. Nevertheless, there appears to be full cooperation and he has informed Jay Wright that he should assist me in every way possible.
6. I told President McKay that it would probably be highly desirable for me to have a meeting with him and probably President Clark within the next week. There are many matters that need to be cleared so that I will be able to go forward in my work. It was agreed that I would arrange this meeting through Clare.”
Fri., 18 July, 1958:
“8:30 a.m. – Had an appointment with Dr. William F. Edwards at his request.
We discussed the following items:
1. Zions First National Bank
a. Board of Directors
Leave open vacancy created by death of Wendell M. Smoot–conflicts.
Decision–approved.
b. Main Office Building
Study by Real Estate Research–approved by Bank Executive Committee and Pierce Brady. Recommend a building with about 90,000 square feet of useable space, about 40% for bank and balance for rent. Cost $2,500,000 – $3,000,000. Bank cannot finance directly because of legal limitation–maximum $2,550,000 in real estate. Proposal: Zions Securities lease land, build building, rent all space to bank, and bank sub-leasing unused space. At end of long-term lease, building revert to bank. Net effect: make possible a desirable building at Main and 1st South; attractive, high quality loan for Church reserve funds. Equitable terms to be worked out.
Decision–approved with the Bank and Zions Securities to determine equitable terms.
c. D. Edward Judd
Desirable to retire at year end–age 70. Qualified for Mission President call?
d. Retirement Program
Self-administered; reasonable, competitive benefits.
Decision–authorized to proceed with study.
e. Insurance Agency
Owned by certain officers; transfer to Retirement Fund.
Decision–approved.
2. Beneficial Life
New Board and Executive Committee member — J. Alma Burrows
Decision–approved.
3. Utah Home Fire
New Board Member to fill vacancy — Theodore C. Jacobsen when available.
4. Deseret Book
a. Board of Directors
Replacement for Wendell M. Smoot
Elbert R. Curtis
Proposed new members — O. Preston Robinson
Alvin R. Dyer
Decision–approved.
b. Progress Report
1957 operating loss $(66,292)
1958 estimated operating profit 25,000 or more
1959 budget operating profit 70,000
Improvement through expense control and efficiency; working toward realistic and adequate goals.
5. Hotel Utah
a. Profit Sharing Program vs. Bonus
Net Income Bonus Bonus % of Net Income
1957 $137,977 $49,440 35.8
1956 173,118 50,435 29.1
1955 186,686 50,611 27.1
1954 191,042 49,813 26.1
1953 210,666 47,370 22.5
Decision–authorized to proceed with study.
5. Hotel Utah
b. Max Carpenter
(Health improved. New enthusiasm toward work.)
6. Z.C.M.I.
Study and recommend
Revised Retirement Program–This will cost money.
Profit sharing program for top administrators.
Decision–Authorized to proceed with study, but report to be cleared with President Richards before submitting for action.
7. Deseret News.
Study of capitalization
Recommendation of Auditors
Seek most favorable set up tax wise.
Decision–Authorized to proceed with study.
8. Brigham Young University
a. Report covering Fieldhouse, real estate puchases and unspent appropriations.
Decision–sub-committee of Committee on Expenditures to be authorized.
b. Management of property purchased in San Fernando Valley.
Decision–Ben E. Lewis to represent Corporation of the President.
Brothers Wilkinson and Edward will work with Bro. Lewis.
9. Management of Financial Records – study and recommendations
Church Financial Department; Presiding Bishopric; Building Committee; Purchasing Department.
Decision–authorized to proceed with study.
10. Utah Pioneer Memorial Theater
Progress Report–Architects expect building to be under construction by January.
Decision–No action, purely a progress report.
11. Tithing Contributions in Foreign Missions
Program completed; will be put into effect as auditors visit foreign missions this
year.
Decision–No action, purely a progress report.
12. New Zealand Stake and Ward Finances
An account for the Corporation of the President is being established at the Bank of New Zealand and all tithing and surplus fast offerings will be sent to this account. Checks will be drawn at Church Headquarters.
Decision–No action, purely a progress report.
13. Miscellaneous Financial Documents for Signature referred to First Presidency.
Decision–Study of such documents authorized.
14. Church 1958 Budget and Agency Account.
Income running in excess of budget, and expenditures well within budget.
15. Higher Education Assignment
Propoed legislation will be submitted to Legislative group Monday.
16. My absence in August. Dr. William F. Edwards will be on vacation during the month of August. (see also Dr. Edwards detail diary notes on the above in Dr. Edward’s file)(1958).
Wednesday, July 23, 1958
Notes of Conference with Dr. Wm. F. Edwards
written by Dr. Edwards.
‘I met with President McKay Wednesday morning, July 23, at 10:30 for about 25 minutes. The following items were cleared:
1. President Wilkinson had requested approval for the B.Y.U. to loan $300,000 as a first mortgage in connection with property given the University by Mr. George L. Barrett of Los Angeles, and also in connection with a business transaction of a former partner of Mr. Barrett. The proposal is that the former partner would pay the University $62,250 for a property with 175 ft. frontage and this property, together with an adjoining property with 425 ft. frontage owned by the former partner, would be used as a building lot for a structure to cost approximately $400,000. The proposed building and the land are appraised at $580,000. This would be a 12 year, first mortgage bearing interest at 6%. President Wilkinson and his staff will be responsible for the management of the loan. The funds would be provided out of surpluses in the Auxiliary Enterprises of B.Y.U. President Wilkinson also points out that this would be a favor to Mr. Barrett and that he would greatly appreciate this favor. It might be added that Mr. Barrett originally conveyed property to the University having a value of around $400,000. By successive conveyances, he has now conveyed properties which have an aggregate value of around $1,000,000. The making of this loan was approved by president McKay and I was asked to notify President Wilkinson.
2. Return Fares of Missionaries
In the past it has been the practice to refer to the First Presidency for signature a statement prepared by Brother Murdock authorizing the Church to pay for the return fare of missionaries being honorably released. Naturally there are many of these documents to be signed. This seems to be an entirely unnecessary procedure and actually an ineffficient and unwise procedure. I pointed out to President McKay that it would be more effective if the travel invoice was referred to Brother Gordon Hinckley’s Office to have them check to verify that the missionary is being released and that this is the only ticket purchased for him. With their confirmation to this effect, the established policy of the Church would mean that the bill should be honored. Therefore, the matter could be referred directly to Brother Rulon Tingey, disbursement officer. President McKay approved of this procedure as entirely desirable. He asked that we contact Brother Joseph Anderson and Hamer Reiser to be certain that they would notify Gordon Hinckley’s Office of any missionary being released dishonorably so that return fare tickets would not be purchased for such missionaries.
3. Payment of Secretaries for Patriarchal Blessings
The Patriarchs of the Church pay up to $1 per blessing for a secretary. Much of the work is done without payment. The Patriarchs prepare statements requesting that the secretary be paid and this statement has been referred to the First Presidency for signature. This is another instance where this places a burden upon the First Presidency that does not seem warranted. So long as the statement submitted by the Patriarch is in order, there is nothing to do but to pay it in accordance with established policy. President McKay approved of all such documents being referred to Rulon Tingey and he will process them for payment.’
Mon., 8 Dec., 1958:
“9:30 a.m. Met with Dr. William F. Edwards. Minutes of that meeting as prepared by Dr. William F. Edwards follow:
1. Virginia Tanner: When Virginia Tanner and her organization moved into the current building, it was understood that rent would be paid in the amount of $400 monthly plus their paying direct expenses for heat, light, etc. The enrollment of the school is less than originally anticipated. Earnings are substantially lower than expected. I have met with them on a number of occasions. I have tried to be understanding. Under the circumstances, it has appeared that the most they could do is to pay $200 per month rental, and this has been approved for 1958. This action was approved by President McKay, and he further suggested that I discuss the problem with Lawrence McKay.
2. Pioneer Memorial Theatre: As a progress report, it was pointed out to President McKay that Kennecott Copper’s contribution of $250,000 and the Church’s contribution of $250,000 plus the architectural work valued at $75,000, made a total of $575,000. I have been in touch with President Olpin of the University recently, and he gave assurance that the University would raise and deposit with the State before the end of the year an additional $25,000, bringing the total up to $600,000. With this total of contributed funds, the State would then make available $500,000. The architects are at work on the plans and hope to have them completed within a month or two.
3. KSL: I informed President McKay that I had completed the study that he had requested of KSL. I was prepared to report to him when time was available. It was pointed out that the annual stockholders’ meeting is January 27. If changes are to be made in the management this would possibly be the logical time to make those changes.
4. Education: It was pointed out that the financial demands of the educational program have increased tremendously. In the 1951 and 1952 budget for education averaged about $3 million dollars and 13% of the total Church budget. For 1959 the Unified Church School System and the Pacific Board of Education have requested a total of $29,378,000 or 37% of the total requests. The B.Y.U. alone is requesting for 1959 approximately $10,400,000 more than 1958. And this increase accounts for 57% of the total increase in requests. It was suggested that there was probably a need for a comprehensive, coordinated study of the Church educational program including the development of a financial schedule. Confidence was expressed that such a study could be made by President Wilkinson and Bro. Mandenhall that would permit long term financial planning to meet the needs of the educational program.
5. Compensation of General Authorities: I called attention to the fact that three of the General Authorities had spoken to me about their inability to meet expenses with their allowances. I find that the annual financial needs of my family are substantially greater than the allowances of the brethren. This was for his information.”
Mon., 5 Jan., 1959:
“Telephone conversation with President J. Reuben Clark, Jr.
President Clark: May I speak to you here for a minute on one or two matters? I have been thinking about that special committee, whatever it was called, advisory committee. I think that if it is intended to make that a supervisory committee of all those corporations, we would get into trouble. There are certain legal matters involved there, but I don’t know any reason why the Presidency should not be ex-officio of each of the Executive Committees–not connect it with any one institution, but just as the majority stockholders, have a Committee and operate as proposed.
President McKay: That is my idea.
President Clark: We are responsible now, and we may just as well exercise it.
President McKay: I think so too.
President Clark: If we try to make it one committee, there are legal aspects.
President McKay: Well, the legal matters would have to be gone into.
President Clark: I think that is what concerns Brother Richards–as for the principle, I think we are all united. I just thought this thing over the past day or two.
I am grateful to say I am a little better this morning. Still I am going to ask you to let me have some time off, but I shall talk to you about that.
President McKay: Can you come to the meeting tomorrow morning with Brother Edwards?
President Clark: There is going to be a shearing such as hasn’t been held for sometime. I anticipate that he probably will not approve it.
President McKay: That does not matter. It is right. We are not set up properly now.
President Clark: No.
President McKay: No matter what comes we must face it and start out right. I am not feeling just right about the bank business. It affects all of the others.
President Clark: I think I should bring to your attention again the Building Committee. McClure commands the brethren. He is dictating what kind of meeting houses we shall have, and the local people are complaining. It is more expensive and so on.
President McKay: He did not dictate in Australia. We have some good ones there.
I think it needs to be reorganized some way, but we can’t do it all at once.
President Clark: I am calling it to your attention. It is serious.
Now, David, your voice tells me you are to go home.
President McKay: I have been here long enough. This is my holiday. Take care of yourself.”
Tuesday, January 6, 1959
THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS
Office of the First Presidency
Salt Lake City, Utah
December 30, 1958
Dr. William F. Edwards
Financial Secretary to the First Presidency
Building
Dear Brother Edwards:
We have now had nearly a year’s experience with the corporate organizational program in which the First Presidency retired from various executive committees and were installed as chairman and vice-chairmen of the Boards of Directors. Before the beginning of the new year we think a few observations may be well directed toward the question as to whether or not this program most effectively meets the requirements in the situation.
It would seem that there has been value in calling new members to the several Boards of Directors and assigning them to serve on the various executive committees. The First Presidency has been relieved of giving attention to much detail in the operations of the corporations. However, there is a question in our minds as to whether or not by surrendering our positions on the executive committees and assuming our present offices in the corporations, we have not also surrendered legally, if not entirely factually, our supervisory jurisdiction over corporate affairs. We think it is normally assumed, even if not explicitly written into the Articles of Incorporation, the Bylaws, or other Resolutions of the Board, that the chairman and vice-chairmen of the several Boards are confined to the function of presiding over Board meetings, and exercising as Board members the voting privileges accorded to each member of a Board of Directors.
We hasten to say that we are convinced that you have endeavored to the fullest extent to bring to us all matters and problems relating to the several corporations which you have felt should come to our knowledge, and receive our consideration. We know too that there has been the utmost respect given to our counsel not only by you, but by those of the several committees and Boards to whom you may have communicated our reactions.
We seem to recall that at least in one of the corporations some effort was made, either by Resolution or Bylaw, to have the chairman and vice-chairmen constitute a committee with powers of nomination, and perhaps some other designated authority or duties. Now we wonder if, at the beginning of a new year, it might not be wise to further develop this concept, and ascertain if it may not be feasible in all of the corporations to have the chairman and vice-chairmen of the Board constitute a supervisory committee (perhaps a better term than ‘supervisory’ can be found) who shall be invested with certain clearly defined powers, among which we think of the following:
1. To nominate (not exclusively) officers of the Board, and at its discretion,
this committee to be empowered to review salaries paid to at least key
offiers.
2. To call into consultation the executive committee and/or other committees
and officers of the corporation for the consideration of such matters as the
supervisory committee may deem advisable to submit.
3. To be provided on the request of this committee with all such reports and
data as the committee may call for.
4. To be provided also at the expense of the corporation with a secretary of
the committe who may, on request of the supervisory committee, have access
to all records of the corporation, and who, likewise upon the request of the
supervisory committe, may attend without vote meetings of other committees
of the corporation, and confer with all officers of the corporation. Meetings
of the supervisory committee, with or without other committee members and
officers, to be called and held as the committe in its judgment may direct.
We see some advantages to this suggestion. It would give to the chairman and vice-chairmen a legal status in corporate affairs more compatible with the responsibility which they must carry in most instances as majority stockholders, and as ‘front’ officers of the corporation in the minds of the public. It would also seem to justify more fully compensations paid to the chairman and vice-chairmen, and it would inevitably bring about a little closer touch, without, we hope, consuming too much time, with the active officers and members of other committees. It would serve also to free you from some executive committee appointments in order that more of your time may be devoted to internal Church affairs.
It seems to us also that this program might furnish an even more satisfactory relationship of yourself to the various corporations. We think you have performed a most valuable service in the reorganization of the companies, but as you well know, we have all been a little concerned about the effect of your inclusion on all the executive committees, with, of course, the right of vote, and in addition thereto the prestige which your relationship to the First Presidency entails. If, instead of serving as a member of the various executive committees, you could be sustained with compensation as secretary to the supervisory committee, we wonder if this position might not well be regarded as more consistent with your position as Secretary of Finance to the First Presidency.
We should be pleased if you would give prayerful consideration to the matters herein suggested, and at the first opportunity we shall arrange a conference with you with the view of making satisfactory adjustment in the matter.
Finally, we wish to remind you, as we remind ourselves, that arrangements of the kind we have spoken of have very often become effective not only for the present, but for long periods to come. We are particularly anxious that no precedents be set that will not be wise for the future.
With deep and sincere appreciation of your most value contributions, and your loyal and devoted service, we are
Very sincerely your brethren,
/s/ David O. McKay
/s/ Stephen L. Richards
/s/ J. Reuben Clark, Jr.
The First Presidency
Tuesday, January 6, 1959
Minutes of meeting with First Presidency Tuesday, January 6, 1959 at 9:00 A.M. William F. Edwards met with all three members of the First Presidency.
Brother Edwards made the following introductory statement in response to the letter addressed to him by the First Presidency and dated December 30, 1958:
‘I received your letter with a feeling of deep appreciation. It was most thoughtfully and carefully prepared. It reveals full understanding of the issues, and I accept it in every detail as reflecting inspired wisdom.
‘I agree fully that the Bylaws of each of the companies should recognize the Chairman and Vice-Chairmen as a committee invested with defined powers. Also, the proposal to establish the office of Secretary to the Committee of the Chairman and Vice-Chairmen impresses me as unique and sound. It preserves all of the basic fundamentals we have considered important while reducing some weaknesses. As I have worked with the companies, it has developed that most of my services are outside of the regular Executive Committee membership work.
‘I too have tried to observe during the year the strength and the weaknesses of the various company arrangements in terms of three goals that have been paramount in my mind:
a. The arrangements that serve best the First Presidency who are primarily responsible to see that the companies are well managed;
b. The arrangements that serve best the operating managements of the companies
who must be held responsible for the successful achievement of the approved
policies and objectives; and
c. How I personally can be most helpful in my assignment.
‘While my activities in connection with certain companies have been more to the front, I consider my other activities of equal if not of greater importance.
i.e. The Missionary Travel studies and your decision regarding air travel for foreign missionaries is probably more important than any company decision of the year.
i.e. The Financial Records Management Program is also probably more important than any individual company development.
‘The demands upon my time are in excess of my capacity. It is desirable to limit my active participation to those assignments where I can render the greatest amount of service.’
Company Organizations
Brother Edwards presented a copy of Page 24 of the report prepared for the First Presidency, ‘Church Investments, Responsibility, and Organization for Management,’ dated December, 1957, outlining a typical organization chart showing the line of authority in connection with the proposed management re-organizations. This organization chart contemplated that for each company, ‘The Chairman and Vice-Chairman shall constitute a Committee of the Board of Directors who shall be empowered to meet with any of its other committees, as occasions may require, to consider problems and policies, and have authority to nominate members of all committees for the action of the Board.’
He pointed out that consistent with this concept of organization, the Bylaws of Zions First National Bank were revised to establish the Chairman and Vice-Chairmen as officers of the Bank and also to constitute them as a committee of the Board of Directors. A copy of the related sections of the Bylaws is attached.
Brother Edwards stated that the intent was to revise the Bylaws of each of the other companies consistent with what had been done for the Bank. However, changes were not made at the time of the management re-organizations during 1958 except for modification of the Articles of Beneficial Life to enlarge the Board. He pointed out that in most instances the interval of time between the giving of approval to go ahead with the re-organization and the meetings did not permit re-writing the Bylaws. Also, legal counsel had been sought and had expressed the opinion that the positions of Chairman and Vice-Chairmen could be established without specific provision in the Articles or Bylaws.
There was also presented to the First Presidency the attached copy of a letter from Paul Ray of Ray, Quinney, and Nebeker. This letter, dated October 29, 1958, points out the rights and powers of the Chairman and Vice-Chairmen in those instances where there are no specific provisions for these offices in the By-laws. The additional observation was made that a ‘self-appointed committee, as distinguished from the members thereof, can have no authority as such in the managements of the business.’
There followed a discussion of amendments that should be made in the Bylaws of the various companies in order to establish clearly the positions and define the functions and authority of the Chairman and the Vice-Chairmen. It was agreed that the Bylaws of the Bank would be carefully studied and further suggestions would be developed for the consideration of the First Presidency.
Specific Company Assignments of Brother Edwards
Brother Edwards reviewed briefly the managements of each of the companies with which he now has assignments and made recommendations pertaining to each of the companies.
1. Zions First National Bank: He expressed the opinion that his membership on the Executive Committee was highly desirable during the past year. This has been a particularly time-consuming assignment, probably equal to the time required by all of the other companies except Hotel Utah. Brother Edwards recommended that he be released as a member of the Executive Committee, expressing the opinion that he could render his service to the Bank without this assignment. He pointed out that there was a major problem that needed to be resolved during the year that was almost as important as the decision to merge the three banks. He also informed the First Presidency that the salary for Brother LaMar Webb had been established at $32,500 as against the $35,000 maximum previously approved by the First Presidency.
2. Z.C.M.I.: While expressing the opinion that his membership on the Executive Committee had been desirable during the past year, Brother Edwards recommended that he be released from this assignment. He called attention to a number of major problems confronting the company. He expressed the opinion that he could assist in the proposed new position.
3. Utah-Idaho Sugar: Brother Edwards expressed the opinion that it was highly desirable that he be on the Executive Committee during the past year. There are pending very important problems. These include the fact that J. Arthur Wood, President, will be 69 next September. He expressed the opinion that as he has worked with the top management, there was a question in his mind as to who might be the logical successor to Brother Wood. It was his tentative opinion that Douglas Love was better qualified than William Cockayne. He also felt that Bion Tolman should be watched because of his leadership qualifications. He then recommended that he be released from membership on the Executive Committee.
4. Beneficial Life–Utah Home Fire–Heber J. Grant: He discussed major problems confronting the three insurance companies–Beneficial Life, Utah Home Fire, and Heber J. Grant & Company–and the opportunity for improvement in the investment of the Church if the earnings-dividend limitation of Beneficial Life is overcome, if operations of the three companies are affiliated, and if managements are adequate. In view of the problems needing to be resolved, Brother Edwards suggested that it may be helpful for him to remain on the Executive Committee of Beneficial Life with the intent of withdrawing once these problems have been resolved.
5. Hotel Utah: He made the following statement regarding Hotel Utah:
‘I am reminded each week as I work with Max Carpenter, semi-monthly at Executive Committee meetings, and monthly at Board meetings that my relationship with the company is most undesirable, except as a temporary measure.
‘There are critical management problems and operations are seriously unsatisfactory. The new Executive Committee has helped a little but not too much. Max appears to appreciate the Committee; he appears to be in better health than for a long time; we have worked together harmoniously; many proposals have been developed that appear desirable, but Max has been unable to carry through, with two or three exceptions.
‘Max has many qualifications but serious limitations. Unless he and his staff can justify greater confidence within the next few months, we will have no choice but to recommend bringing in a new top man as president.
‘I recommend that the Bylaws be revised, but otherwise status quo be maintained until the management problems are resolved. I know of no other way to turn.’
Brother Edwards then presented to the First Presidency a chart showing the rating that he would assign each company in comparison with well managed and successful companies in their respective industries:
Performance Rating
A B C D E
Zions lst National ———
Z.C.M.I. — Retail ———-
Z.C.M.I. — Wholesale ——-
Beneficial Life ———–
Utah Home Fire ————
Heber J. Grant
Utah-Idaho Sugar ——–
Layton Sugar ——-
Hotel Utah ————–
It was stressed by Brother Edwards that the low rating he gave all of the companies except Z.C.M.I. Retail did not reflect lack of confidence in the managements. Except for Hotel Utah there are special circumstances in each situation, but he stressed that solutions should be found, and over a period of time the companies should justify highly favorable ratings. There are major policy issues effecting each company that will be reported to the First Presidency.
Zions First National Bank
There was presented the attached list of Board members and possible candidates. The management of the Bank strongly recommends that F.S. Mulock be retired from the Board and that the two vacancies be filled by the appointment of J. Eastman Hatch and Lawrence F. Black. The following information was presented regarding the first four names that include as alternates to Hatch and Black Thomas C. Carter and Wilford W. Clyde:
J. Eastman Hatch — President of Utah Sand and Gravel Company and several related companies; also President of J. Eastman Hatch Insurance Agency. Mr. Hatch represents considerable worth and is an active member of the Church. His companies are important customers of the bank, and we have observed recently that Mr. George Eccles of the First Security Corporation has been courting Mr. Hatch and endeavoring to get the business that he controls. We believe that Mr. Hatch would be pleased to be a member of our Board and that he would make an active and enthusiastic Director.
Lawrence F. Black — Manager of Utah Operations, Columbia-Geneva Steel Division, United States Steel Corporation. Mr. Black is from Pennsylvania and has been with the United States Steel Corporation since 1924. He has worked himself up in the organization, moving to Duluth in 1943 and Cleveland in 1948. In July, 1950 he was moved to Utah as General Superintendent of the Geneva works of Columbia-Geneva Steel Division. In March, 1958 he was moved up to his present position as Utah Operations Manager. He is active in local civic affairs and is highly regarded in his field. The Steel Corporation has a very important relationship with the bank, and it is felt that by adding his name to our Board we will not only cement and improve this relationship, but that it will have a beneficial influence on the managements of companies operating in fields dependent upon the steel company. This industry is an extremely important one to our area, and we feel Mr. Black’s membership on our Board would be very helpful to us. His family are devoted Catholics.
Thomas S. Carter — President of Interstate Motor Lines, probably the largest truck line that has headquarters in Salt Lake City. He is a non-church member and represents substantial wealth. We believe that if he were offered a Directorship, we could get a substantial part of this company’s business which is sizeable in amount. The company does a good deal of borrowing to purchase new equipment and also has substantial cash balances.
Wilford W. Clyde — President of W.W. Clyde and Company, General Contractors of Springville as well as Salt Lake City. Mr. Clyde also has extensive other business interests and represents considerable net worth. He is a church member having formerly been a bishop. One of his interests, Knight Ideal Coal Company, carries a nice account with us, but there is a great deal of Mr. Clyde’s business that we do not have, and we believe if he accepted a Directorship, we would be able to get much of this banking business.
The management felt that it would be desirable to strengthen the Board with leading business men in preference to General Authorities. It was pointed out that if an additional General Authority were to be added to the Board, that Elder Delbert L. Stapley had previously been a member of the Board of Utah Savings Bank and Trust Company, but his name was eliminated at the time of the merger because of the need of reducing the number of Board members.
There was then presented the following suggested committees:
Executive Committee Loan Committee
W. LaMar Webb, Chairman W. LaMar Webb, Chairman
Fred A. Carleson Lane W. Adams
Ashby Badger Ernest A. Nelson
*Lane W. Adams Robert S. Hayes
*Robert S. Hayes *Grant G. Bryan
*Alvin J. Schoenhals, Sec. *Ames K. Bagley
*Glen M. Robinson
Investment Committee Trust Committee
Lane W. Adams, Chairman Fred A. Carleson, Chairman
Robert S. Hayes W. LaMar Webb
*Grant Weiler Willard R. Smith
*Edward O. Muir
Claron O. Spencer
D. Edward Judd
Francis M. Chipman, Sec.
Examination Committee
Ashby Badger
Donald P. Lloyd
*Suggested but not members of the committees at the present time.
Subsequent to the meeting, Brother Edwards reminded the First Presidency that at a meeting December 8th they had approved of Lane W. Adams becoming a member of the Executive Committee. Their approval was reported to the management, and Brother Adams was informed of the decision of the First Presidency to recommend to the Board of Directors his appointment as a member of the Executive Committee.
The First Presidency took under advisement the proposed membership of the Board and the Various committees.
Mon., 19 Jan., 1959:
“Monday, January 19, 1959.
Minutes of the Meeting
of the
First Presidency
Held Monday, January 19, 1959 at 8:30 A.M.
Present: President David O. McKay, President Stephen L. Richards,
President J. Reuben Clark, Jr.
Personnel Committee Problems:
A meeting with Elders Delbert L. Stapley, LeGrand Richards, Rulon Tingey, of the Personnel Committee, and Wendell B. Mendenhall, of the Building Committee.
Disparity of Salaries
Brother Stapley explained that certain salaries paid in the Building Department are higher than the scale authorized by the Personnel Committee, and this has created pressures for higher salaries to be paid in other departments. He submitted the following questions:
1. Is the Building Department to bring all personnel problems and all ‘hires’ to the Personnel Committee for approval?
President McKay said: That is what should be done.
2. Are salaries, overtime, and payments for extra services to be handled as payroll items?
Extra Time Payments to Architects
Brother Mendenhall explained payments for extra time to architects. He said that some architects have done extra work on plans of their own. These plans have been turned over to the Building Department. In the main, men in the upper brackets have no overtime at all. He stated that there are four who are approved on the salary basis, but who have not been put on salary because they are being used on a straight time hourly basis for the present.
Brother Stapley explained that when work accumulates excessively, it is cheaper to pay overtime to employees who are acquainted with the work than to hire untrained people, and that the more work is delayed, the more expensive it is to get it done.
Work Accumulation in Finance and Genealogical Departments
Elder LeGrand Richards explained that work accumulates heavily periodically in the Comptometer Department, and in the Genealogical Research Department. Qualified workers in these departments cannot be hired easily, and it is more economical to have the trained workers work on Saturday, and to pay them overtime. It has been recommended that regular workers be increased, rather than continue to use overtime to avoid the abuses from the use of overtime.
IBM Operators Work Two Shifts
Explanation was made that the IBM operators work in two shifts to handle the accumulation of work, and that by these means, the overtime is avoided. The Finance Department is cutting down overtime to a minimum. By working two shifts, the department gets better use from the machines which were originally installed on a rental basis. The machines can now be purchased.
Architects Compensation
Brother Stapley asked whether or not architects are to be paid on an extra service basis, or on the payroll.
Brother Mendenhall explained that Church Architect Harold Burton is compensated on the basis of a private contract with the First Presidency, and that the Building Committee has nothing to do with that. It was explained that he is doing special work for the theatre to be erected at the University of Utah, and the Church’s bearing the cost of his work is in the form of a contribution to this project.
Brother Mendenhall explained that two architects, befoe they joined the Building Department, prepared plans and before they came to the Department, two wards used these plans. The architects are employees of the Church now, and the plans are suitable for repeated use. The architects having turned the plans over to the Church do not receive the two per cent for repeated use of plans, but if modifications are made in the plans, they may be compensated for extra work making the modifications on their own time. He stated that this has not been done yet, however.
President Richards pointed out that they would have to work on their own time rather than on Church time. Otherwise they would be paid double.
Brother Mendenhall stated that architectural time has been reduced and criticism of delay has been correspondingly reduced by the present arrangement.
President McKay summarized the plan as follows: ‘We have a number of plans from different architects which may be adapted to certain buildings now. If there are any changes or modifications in any one of these, the Building Committee has a right to make the modifications and the architect is paid for them.’
Brother Mendenhall said, ‘The architect is paid for the modifications and he is required to follow through and to give instructions on the project.’
Brother LeGrand Richards asked if architects on full-time salary for the Church are paid fees in addition to their salaries.
Brother Mendenhall replied that they are not, and that that will not be a problem. Only two plans are involved at present. He said that we have the possibility of use of one plan, and it was thought that the man who originated the plan should make the changes, and the Church could pay him extra for working on his own time or on Saturday. It was a matter of honoring the man who originated the plan.
Brother Stapley explained that the reason for raising the question is to learn if it is the responsibility of the Personnel Department. The Committee desires to know how it is to be handled.
Architectural Department Staff and Operation
Answering Brother Stapley’s question, Brother Mendenhall said that there are four architects in the Department now: Brother Stephen Baird, Brother Leonard Harmon, Brother Edward A. Carlson, and Brother Arnold Ehlers. The United States is divided into four divisions in which they work out the architectural problems. In the Building Department is Brother Neff Taylor. The Department makes money every year. They do a lot of designing. The Department has 57 plans now in operation which have been developed by the Department. Twenty-six of these have been developed for South America where local materials will be used. Local architects like the plan which has been set up. The plans include site planning, kind and size of chapels, recreation halls and classrooms. The foreign architects do not understand our program. The architects of the Building Department design the building to fit the pattern and need of the Church, and the local architects are pleased to work out local plans for the use of local materials. The plans have been prepared according to the building code of the country.
Brother Mendenhall explained that Brother Burton supervises the architectural work. Plans which come in from various areas he examines, and the changes he recommends are made before the project finally comes to the Expenditures Committee. Brother Burton does an excellent job in this field.
Brother Mendenhall said the annual report of the Department will be submitted tomorrow, January 20, 1959.
He explained that Brother Burton and his son have an architectural business, and when Brother Burton came to the Church Architect’s Office, he turned over three or four jobs to his son. He is in fact on special assignment to work on the plan for this block under the direction of the First Presidency. The four projects he turned over to his son were the Church College in Hawaii, the Inter-Stake Center in Oakland, a building in Chicago, and one in Detroit.
Brother Richards raised a question as to whether it was necessary for the entire Building Committee to review plans. Brother Mendenhall explained that the combined judgment of the men in the Department has been found to be valuable, and that the members of the Department attend meetings of the Expenditures Committee to get valuable understanding of the policies of the committee in relation to their responsibilities.
Brother Stapley explained the part-time arrangement made for Architect Edward O. Anderson to preserve his retirement and hospitalization benefits.
The arrangement for Brother Biesinger was also reviewed.
President McKay said that the personnel matters of the Department including the Building, Purchasing and other Departments are in the hands of the Personnel Committee, and any questions can be brought to the First Presidency.
Secretarial Salaries – Specialists
The salaries paid secretaries Doris Taggert and Grace Richards were reviewed. Brother Mendenhall explained that Sister Taggert receives a basic salary and $50.00 from the Pacific Board of Education. For the personal work she does for him, he pays her himself. Sister Grace Richards was obtained from the University of Utah to do a specialized work. She receives a basic salary and is paid $35.00 by Brother Walton. She is doing executive-type secretarial work. The work she does is on contract work, and figures which take someone of executive ability.
Brother Stapley explained that the Committee has to hold the line on secretarial salaries, and the Building Department salaries being higher has created a constant pressure to increase salaries of other secretaries. There are pressures from the Purchasing Department and other departments to increase secretarial salaries, he said.
Recommendations Requested
President McKay asked what the Personnel Committee recommends. Brother Stapley said that in view of the higher rates, it will be necessary to make some increases.
Competition for Trained Workers
Brother Mendenhall said it is common knowledge in the city that after a secretary has been trained here, some office in the city will offer her more.
Salary for Landscape Architects
President McKay asked the Personnel Committee to go over the whole matter and to bring recommendations to the First Presidency. Brother Stapley raised the question as to Brother Jeppson, the Landscape Architect, and Brother Irvin T. Nelson, and President McKay asked him to submit a recommendation.
**************
Note: Elders Stapley, LeGrand Richards and Rulon Tingey left the meeting, and Brother Mendenhall remained.
Pacific Board of Education Recommendations
Brother Mendenhall read the following memorandum to the First Presidency relating to the proposal to maintain the high school at Pesega and Mapusaga, and including other matters as follows:
High Schools at Pesega and Mapusaga
Subject: High School needs as studied and recommended by the Pacific Board of Education for Pesega and Mapusaga.
It is proposed by the Pacific Board, after considerable study, that we add a high school addition to the present primary school at Pesega.
It is proposed that we then proceed to lean more to high school education at Pesega and less to primary education. By this additional facility, we will then be able to offer a full high school operation without the added expenditure of at least $350,000.00 to develop a separate high school facility in Pesega.
We are not building the high school in Mapusaga which was designed to have both high school and primary school facilities. After consultation with the American Samoan government, we find that there will be no need to operate a primary school. Therefore, we are requesting to put an addition to the Mapusaga school which will offer full high school facilities.
The estimated cost of these additions is as follows:
Pesega – About $70,000.00 church participation for structural and about $30,000.00 in local labor participation, or approximately $100,000.00. This will not include the furnishings, the architectural fee nor the landscaping.
Mapusaga – The cost of the addition at Mapusaga will be exactly the same and a re-use of the same plan. It would seem with approximately $70,000.00 of Church money, and probably $25,000.000 for furnishings, architectural and landscaping, we will be able to construct and furnish these two complete units at the cost of $95,000.00 each with the labor missionary system furnishing all the labor over and above this cost. This appears to be the cheapest and most economical, as well as the most practical way to operate these schools.
Elementary Schools at Tonga and Vava’u
It is proposed that we close the primary schools completely in Tonga. It may be that we will have to operate the two primary schools on the Island of Vava’u during the year 1959 because of a present commitment to the government. However, if these schools can be closed without injury, they will be closed upon my arrival in Tonga.
Landscaping Unified at Church College, Laie and Temple
The proposed landscaping program for the Church College of Hawaii, the Hawaiian Temple and the Zion Securities properties in the village of Laie. It is proposed that this landscaping program be under one head directed by Zion Securities management in Laie.
School Teachers Double Tax Liability
The school teachers tax liability as imposed upon them by the New Zealand government.
1) They must pay U.S. taxes for 18 months after arrival in New Zealand before they are considered exempt.
2) It has been ruled by the New Zealand tax commission that the New Zealand teachers must immediately pay on their salaries upon being employed to teach in New Zealand. This, of course, imposes a tremendous burden and a double tax.
3) In addition to the double tax, the New Zealand tax rate imposes an extra tax on the new Zealand teachers over and above the U.S. tax rate.
We feel consideration must be given for this difference and propose the following:
That we make up this difference by making no charge to the teachers for their housing. The present cost of housing is $60.00 per month or $720.00 per year. The average difference in tax costs is $800.00 to $1,000.00.
If the above proposal cannot be worked out satisfactorily, we will then have to propsoe an adjustment in salary upon the teachers return from New Zealand. (End of memorandum read by Brother Mendenhall.)
Closing Schools in Tonga
The First Presidency approved the recommendation to close the primary school in Tonga, and to continue for the present the elementary school in Vava’u, and when this school is closed the Government will have to take over.
Brother Mendenhall said that he will see Prince Tungi and inform him of the plans.
School Teachers Double Tax Liability
Brother Mendenhall read the section of the memorandum relating to school teachers tax liability, and explained that the United States teachers are obliged to pay United States income taxes for the first eighteen months of their being in New Zealand, and that they are also at the same time assessed the income tax by the New Zealand Government on income earned there. He proposed that housing be provided them without charge to make up to a degree this double burden.
Per Acre Cost of Improving Agricultural Land in New Zealand
Brother Mendenhall reviewed the investments made to date per acre in the agricultural land at New Zealand College and Temple which he reported to be $265.00 per acre, and recommended that the cost of reclaiming and making the land productive be continued up to $415.00 per acre. (See attached chart.) He explained that the New Zealand Government is reclaiming and developing contiguous land to the east of the College and Temple land, and as it is brought into production, the whole area will prove to be more valuable. The agricultural research findings from experimental activities of California, Oregon and Canada are being given to the New Zealand Government.
Unification of Landscaping at Church College, Temple and Laie
Brother Mendenhall presented the proposal that the landscaping for the Hawaiian Temple, the Church College, and the Laie Village be maintained as a uniform program under one head, this being the economical way to carry out this work. This recommendation was approved.
Building supervisor for Uruguayan Mission
Brother Mendenhall presented the request of President Arthur M. Jensen of the Uruguayan Mission that Clair Neves be called to assist him in that mission as building supervisor. Brother Neves and President Jensen have worked together in President Jensen’s construction business. President Jensen recommends him strongly.
Brother Mendenhall was asked to prepare an estimate of the cost of sending this man and his family for a two-to-three-year period. Brother Mendenhall will leave Thursday for the South Pacific and expects to be away about four weeks.
London Chapel – Exhibition Road
Elder Edward O. Anderson came into the meeting and presented a letter from Mr. Winslade of T.P. Bennett and Sons, London Supervising Architects, and also revised sketches and quantity surveyors estimates of 220,000 pounds for the erection of the London Chapel on Exhibition Road. He exhibited sketches for modification of the location of the pulpit, for increasing the seating capacity in the building, and also revised sketches and specifications of the baptismal font proposed. President McKay authorized him to notify Sir Thomas Bennett to proceed to prepare the detailed plans for submission to contractors so they can make their tenders.
Hill Cumorah Landscaping
Appointment was made for President McKay to see Elder Irvin T. Nelson about landscaping on the Hill Cumorah, Tuesday, immediately after the meeting of the Expenditures Committee.
**************
Thursday, January 22, 1959
Minutes of a meeting of the First Presidency Thursday, January 22, at 4:30 P.M. with William F. Edwards.
Brother Edwards met with the First Presidency to consider the reorganization of the managment of KSL and related matters. The following items were considered and decisions made:
1. Chairman and Vice-Chairmen: Brother Edwards made the following statement: ‘Because of the unusual importance of KSL to the Church, as well as the investment of the Church, there would appear to be no other company with more justification for the interest and attention of the First Presidency. Presumably members of the First Presidency would wish to serve the company as Chairman and Vice-Chairmen.
Action: It was agreed that President McKay would become Chairman and Presidents Richards and Clark Vice-Chairmen.
2. President: Brother Edwards made the following statement: ‘When Jay Wright was employed by KSL, he had deficiencies in training and experience for the position of top leadership. Salesmanship and not engineering is the paramount challenge for success in this business. Therefore, there must be some reservation as to his ability to provide the necessary leadership to re-establish satisfactory operations. Nevertheless, he has had valuable training and experience since coming with KSL; he commands the confidence of his associates; his appointment as president would be received with general approval; and it would strengthen his position in and out of the organization. I am personally convinced that it would be much wiser to appoint him president and give him every assistance than to attempt to locate and employ someone with greater qualifications. It would be a serious blow to the organization to reach out a third time for a new top man.’
Action: After general discussion of the qualifications of Brother Wright, it was the decision of the First Presidency to recommend to the Board of Directors that Jay Wright be made president.
3. Board of Directors: The Board is now made up as follows:
1. Stephen L. Richards
2. J. Reuben Clark, Jr.
3. Richard L. Evans
4. Earl J. Glade
5. Spencer P. Felt
6. Gordon B. Hinckley
7. Gordon Holt
8. John M. Wallace
9. Joseph L. Wirthlin
10. ______________
11. ______________
Action: It was the decision of the First Presidency that President McKay and Jay Wright would be nominated to fill the two vacancies.
Brother Edwards pointed out that there was real but minor conflict in the case of Gordon Hinckley because of the new music services program of KSL. It was agreed that Brother Hinckley would be spoken to by a member of the First Presidency, and he would continue on the Board unless he felt there was a conflict.
4. Executive Committee: The Executive Committee is now consituted as follows:
Stephen L. Richards
J. Reuben Clark, Jr.
Joseph L. Wirthlin
Spencer P. Felt
Brother Edwards, after discussion of the matter in general with Brother Wright, suggested that it may be desirable to appoint Brother Wright and his two vice-presidents in charge of television and radio to membership on the Executive Committee along with two directors who are not officers.
Action: The First Presidency approved tentatively of Jay Wright, Lennox Murdoch, and Joseph Kjar being made members of the Executive Committee as well as John Wallace and Spencer P. Felt. This matter is to be referred to Jay Wright before a final decision. If this also represents his best thinking, President McKay will contact Mr. Wallace to invite him to be a member of the Executive Committee.
6. Articles of Incorporation and Bylaws: Brother Edwards pointed out that the Articles are very restrictive and that the company has no bylaws.
Action: It was agreed that Brother Edwards would work with Jay Wright and the attorney in developing amendments for the Articles and preparing bylaws. Bylaws will be written that will establish the office of Chairman and Vice-Chairmen and will also establish a standing committee of the Chairman and Vice-Chairmen and a secretary to such committee.
7. Secretary: It was pointed out that Bishop Wirthlin has long had the position of Secretary to KSL. He does not perform a service in this connection.
Action: It was agreed that it would be desirable for the secretary to be an active officer of the company. The First Presidency will speak to Bishop Wirthlin, it being their feeling that he would be pleased if he were relieved of this assignment.
8. Ivor Sharp’s Retirement: It was recommended that Ivor Sharp be retired as of January 1, 1959.
Action: The First Presidency approved of the retirement of Brother Sharp as of January 1, 1959. In view of his long service to the company, it was approved that he would retire with an income from the company of $400 per month.
9. Earl J. Glade: Brother Glade received an income from KSL of $350 per month from the time he was released as Executive Vice-President from 1944 through 1951. Subsequently, he has received $200 per month. There was a general discussion of his relationship to the company and the justification of continued compensation.
Action: It was the expressed opinion of the members of the First Presidency that this compensation from the company should cease. This opinion will be conveyed to Brother Wright who may wish to discuss it with the First Presidency before action is taken.
10. Idaho Radio Corporation: It was pointed out that the Church owns 40% of the stock with 23% being held by KSL and 17% by Zions Securities. At the present time Joseph L. Wirthlin, Gordon B. Affleck, and Ivor Sharp are on the Board. Brother Affleck is also general counsel. Brother Edwards recommended that the president of KSL should be on the Board of Idaho Radio Corporation. There are important problems confronting this corporation. Brother Wright appears especially qualified to be helpful and to represent this interest.
Action: It was decided that Ivor Sharp should be released from the Board at the next stockholders’ meeting and Jay Wright shuld become a member of the Board.
President McKay is going to contact Brother Wright and inform him of the decision of the First Presidency with respect to the Chairman and Vice-Chairmen and the decision to recommend him to the Board as president of the company. Following such a conference with President McKay, Brother Edwards was instructed to convey to Brother Wright the other decisions of the First Presidency and to be available to assist him in anticipation of the stockholders’ meeting and the board meetings January 27.”
Tues., 3 Feb., 1959:
“8:30 to 10 a.m. – Presided at the regular meeting of the First Presidency.
At this meeting Dr. Wm. F. Edwards presented items as follows:
1) Layton Sugar Company matters
2) Dr. Edwards, Secretary of Finance, proposed that he withdraw from membership on Board of Directors, but continue his relationship with the Boards as the representative of the Standing Committee, in his capacity as Secretary of Finance; in that position acting under assignment of the Chairman and Vice-Chairmen of the Standing Committee he could meet with the officers of the companies, attend the Board meetings. He explained that in one or two instances temporarily it may be advisable for him to delay this withdrawal until after the annual stockholders meetings. (see Jan. 6)
3) Meetings with the First Presidency: Dr. Edwards pointed out that the past year has been one of moving from one crisis into another. Often we approach almost the hour before an important meeting before he is able to meet with the First Presidency and make decisions. He recommended that he be given permission to schedule a meeting with the First Presidency approximately every other week, which would permit him to clear various matters with them, and when it may be desirable to have a president of one of the companies meet with them, he could arrange ahead for this. Now that the First Presidency have the specific responsibility of being a standing committee of the Chairman and Vice-Chairmen of the various companies there should be a regular meeting.”
Fri., 20 Mar., 1959:
Brother Edwards presented the following recommendations:
1. LaMar Webb: ‘We feel very strongly that it would be detrimental to the interests of the church through its holdings in Zions Securities Corporation and Zions First National Bank to make available the property at First South and State.’
2. Peirce Brady: ‘Looking objectively, if that is possible in this case, it would seem that $200.00 per month is little compensation for the problems which the Church’s over-all interests would face if the Byrd interests were accommodated.’
In a subsequent conversation Peirce expressed a definite opinion that it would be unwise to lease the property.
3. In view of the personal involvement of a number of the General Authorities in the new bank and the fact that some may feel that failure to lease the property is an unfavorable act toward the bank, I wish it could be recommended. If the only question involved were making the property available to aid the new competitive bank, I would recommend helping them in preference to generating the critical feelings that may result from failure to lease the property, even thought as a strictly business proposition it may be illogical and unwise to do so.
But of overwhelming importance is the competitive position of the proposed Byrd Building with the Kennecott Building and the Zions First National Building. In my judgment it would be unwise to lease the property and thus facilitate and make more attractive a project that can seriously affect the earnings on these two buildings. Viewed objectively I personally feel it is unreasonable for people to expect that Zions Securities would lease the property.
Brother Edwards also informed the brethren that Bishop Buehner had spoken to him about the interest of the new bank. Brother Edwards had told Bishop Buehner that if he were to recommend against the lease that he would inform the First Presidency of Bishop Buehner’s desire to talk with them in favor of the lease.
Action: The First Presidency concluded that it would be desirable for Zions Securities to retain control of all of its property on First South adjacent to the proposed new building and therefore it would be undesirable to enter into the proposed lease. Brother Edwards was instructed to convey that decision to Peirce Brady.
William F. Edwards
3/19/59″
Tues., 7 July 1959:
“Telephone conversation with President J. Reuben Clark, Jr.
President Clark: President McKay, I am awfully sorry, but could you excuse me from the meetings this morning.
President McKay: You are not feeling well?
President Clark: This heat — every year for years this heat gets me and the doctors told me to keep away from it as much as I could. This morning I do not feel too good. I thought I would stay home today, and then I can be with you at the meeting tomorrow.
President McKay: You are doing just right, and you have our blessing. So don’t come down.
President Clark: A thousand thanks. You have had no change of heart I hope” change of heart on the Bank Branches?
President McKay: No, I haven’t.
President Clark: Good for you, brother.
President McKay: No, I haven’t, but I will tell you we are going into quite a confict so I find, but I am going to follow my impression.
President Clark: I hope you will. The two of us are with you.
President McKay: And we are united, and that is enough for me.
President Clark: I do not think we should have any.
President McKay: One is already approved.
President Clark: Remember when that was approved they said we would have time if it were approved, to make up our minds whether we want to take it.
President McKay: My mind is made up. Thank you for calling and take care of yourself.
President Clark: Do be careful about yourself, too.
President McKay: Thank you.
President Clark: How is Ray?
President McKay: Ray is better this morning I am glad to report.
President Clark: Thank you. Good-bye.”
Fri., 4 Sept. 1959:
“Minutes of Conference with President McKay Friday morning, September 4, 1959.
Z.C.M.I.
Brother Edwards brought to President McKay’s attention a letter that was prepared for the First Presidency responding to the August 31, 1959 letter of Harold Bennett. The letter from Brother Bennett had been reviewed by the First Presidency, and President Moyle had informed Brother Edwards that the First Presidency had decided to maintain the proposed terms of the lease that were outlined to the Executive Committee at their meeting with the First Presidency Friday, August 28, 1959. Brother Edwards said that he had reviewed each of the points with President Moyle and the letter was written consistent with his suggestions. Brother Edwards expressed the personal opinion that the terms outlined in the letter state the proposal of the First Presidency in a way that appears to represent best the interests of both Z.C.M.I. and Zions Securities in view of the basic decision of the First Presidency.
It was also pointed out to President McKay that bids have already been accepted from the company who is to tear down the old bank building and the adjacent Standard Furniture building and that their going forward with the work will be held up starting Tuesday until the lease with Z.C.M.I. has been consummated.
It was the decision of President McKay that the letter should be reviewed by the First Presidency at their meeting Tuesday morning.
There followed a report to President McKay on the progress being made in finding a buyer, or liquidating the wholesale business. Salt Lake Hardware has made a firm proposal for purchase of the Hardware Division, and two, or more, organizations are interested in all or part of the balance of the business. Salt Lake Hardware feels that the matter should be acted upon immediately and desires a decision next week.
Harold Bennett, President of Z.C.M.I. has proposed that there be called a special Board of Directors’ meeting for Wednesday or Thursday afternoon of next week to review the proposals and act thereon.
Normally such a business matter would come to the First Presidency as the Standing Committee of the Chairman and Vice-chairmen of Z.C.M.I. However, in view of the absence of President Moyle and the limited time, it was suggested that Elder Stapley, who is also a director of Z.C.M.I., and Brother Edwards meet with the officers and study the proposals and in this way represent the First Presidency and permit the business to come to their attention at the board meeting. It was left that Brother Edwards would speak to Elder Stapley that this assignment might be carried out. The wholesale Division’s liquidation has already been approved.
William F. Edwards’ Assignment
President McKay indicated that he had the time, and there followed a discussion of Brother Edwards’ assignment as Secretary of Finance to the First Presidency. This is the first such conference with President McKay since the changes in the First Presidency.
Brother Edwards expressed his appreciation for the opportunity of working with the First Presidency and President McKay in particular. He viewed this as an honor and a blessing that justified looking upon all of his previous experience and training as being preparatory to this assignment.
Brother Edwards made the following statement regarding the attitude with which he worked:
‘I am responsible to you as the President of the Church and the Lord for my work. If I furnish you with information that is biased, misleading or not adequate, and if I thus influence you toward wrong answers or fail to lead you to the right answers, I will have to account to the Lord.’
Brother Edwards pointed out that President Moyle has been severely critical of many of the matters worked out in cooperation with the First Presidency. He referred to a number of situations where President Moyle had expressed such criticism before being fully informed on the circumstances. Nevertheless, Brother Edwards expressed full confidence in President Moyle and his confidence in the soundness of his decisions on the average. He expressed confidence in his ability to work with President Moyle and the First Presidency.
Brother Edwards then stated that he would be happy and would feel blessed in continuing to serve the First Presidency if he had the full confidence of President McKay. He further suggested that President McKay become fully informed in case criticism is expressed before passing judgment. He expressed confidence that in all important matters on finances that have been handled by the First Presidency time will prove the wisdom of what has been done during his period of service.
President McKay expressed appreciation for the work of Brother Edwards and expressed confidence in him. In turn Brother Edwards pledged to carry forward doing everything within his power to be of assistance to the First Presidency.
Hotel Utah
There was a discussion of the problems confronting Hotel Utah. Brother Edwards again expressed to President McKay his opinion that the hotel will never be operated in a way that will achieve its potential without a new man coming in as leader. There was a discussion of the qualifications of the man for this position. It was agreed that he must be a man wtih the capacity to operate an important business successfully and who is faithful to the Church and would be recognized as a leader in the community. If he has these qualifications, he can engage others to help with the details and rapidly acquire a knowledge of the hotel business.
Zions First National Bank
President McKay asked Brother Edwards if he was personally acquainted with Brother Webb before he was engaged as President of the Bank. There was then a review of the basis on which Brother Webb was selected. Brother Edwards contacted President Samuel Carpenter who was then Secretary to the Federal Reserve Board in Washington, D.C. President Carpenter recommended Brother Webb as the man he felt best qualified for this position. President Carpenter was unusually well qualified to make such a recommendation because of his acquaintance wtih bankers throughout the country and his position of leadership in the Federal Reserve System. Melvin Miller of the American Bankers Association was also asked to make a canvas of possible L.D.S. people in the banking profession, and he independent of President Carpenter recommended Lamar Webb as an outstanding man for the position. The First National Bank of New York was asked to make a careful check of Brother Webb’s qualifications as a banker, and they gave a most favorable report. Chase Manhattan Bank of New York was also asked to make an independent check on Brother Webb’s qualifications as a banker, and they gave him a highly favorable report. Brother Edwards then took occasion to go to North Carolina and meet Brother Webb in his home, visit with the president and other officers of his bank and to visit a number of offices of the bank in order to appraise the environment in which Brother Webb had been working and the confidence of the officers of the bank in Brother Webb. Brother Edwards obtained a most favorable impression. He then conferred with President Henry Smith, who was presiding over the mission, for an appraisal of Brother Webb’s devotion to the Church. It was on the basis of these reports that Brother Webb was recommended to be employed as President of the Bank.
Brother Webb has been severely handicapped in his work, and this has been reflected most in his being unable to make adequate contacts with business people. He had expected to lean upon Wendell Smoot as his responsible credit man. However, Brother Smoot became ill with cancer and soon passed away. This left a serious gap, and Brother Webb personally had to do much of the detail work that it was contemplated Brother Smoot would handle. Herbert Snow was killed in an automobile accident. This brought to a head the problems of the Utah Savings office. It was found that the management was incompetent, that loans had not been handled properly, that records were inefficient, and there was a threat of serious losses. Brother Webb was forced to spend an endless amount of time salvaging large loans that were in trouble and that exposed the Bank to criticism by the Examiners of the Comptroller of the Currency’s office and the Federal Reserve System. Together with these heavy assignments, there was the period of building up the loan portfolio of the Bank, adjusting to the retirement of Orval Adams and planning the new office building for the Bank, the rennovation of the Utah Savings office, and the new quarters in the proposed Kennecott Building.
Brother Edwards expressed confidence in Brother Webb’s capacity as a banker, his devotion to the Church, and his ability to overcome the problems and give the Bank the leadership that it needs.
Kennecott Building
There has been criticism of the option to purchase the land by Zions Securities and some particulars of the agreement with Kennecott Copper. Brother Edwards expressed the opinion that the options written by Paul Ray under the direction of President Richards were desirable documents and carefully written to protect the interests of Z.C.M.I., but this was not considered of major consequence, and it is hoped that it can be corrected.
William F. Edwards
9/4/59″
Mon., 4 Jan. 1960:
8 a.m.
Bank Merger Considered – The First Presidency met by appointment (previously arranged through President Moyle), the following bankers: David M. Kennedy, Chairman of the Board, Continental Illinois National Band & Trust Company of Chicago; Howard J. Stoddard, President of the Michigan National Bank, Lansing, Michigan; Taylor H. Perry, businessman from Palo Alto, and formerly an officer of the Bank of America; W. LaMar Webb, President, Zion’s First National Bank; and William F. Edwards, Finance Secretary to the First Presidency.
This was one of the most important meetings ever held on financial affairs of the Church. Three leading bankers of the country (named above) willingly responded to a telephone invitation to come to the office of the First Presidency to confer with us on banking affairs. They left their businesses at short notice, coming by plane at their own expense. It was necessary for them to leave at noon by plane in order to meet other commitments of their own.
We discussed with these bankers at the advisability of the Zion’s First National Bank joining with the Walker Bank of this city and the First America Bank, and the impact that this merger would be upon the Church, and upon banking interests generally here in the West.
These men thanked us for the privilege of discussing this matter with them, and refused to have the Church reimburse them for their expenses in coming to Salt Lake City.
What a reservoir of strength this Church has in men who are seemingly indifferent – outstanding men – men of judgment – who wish to cooperate with us and render service!
We concluded that the Zion’s First National Bank will not consider further the proposal of merging with Walker Bank & Trust Company and the America First Bank.
January 4, 1960
Minutes of Meeting of the First Presidency January 4, 1960, at 8:00 A.M. All three members were in attendance. The following were also in attendance: David M. Kennedy, President, Continental Illinois National Bank and Trust Company; Howard J. Stoddard, President, Michigan National Bank, Lansing, Michigan; and Taylor Perry, businessman from Palo Alto and formerly an officer of Bank of America; G. Kenneth Handley, J.A. Hogle and Company; W. LaMar Webb, President, Zions First National Bank; and William F. Edwards, Secretary.
President McKay expressed special appreciation to Brothers Kennedy, Perry, and Stoddard for adjusting their business schedules to respond to a call of the First Presidency.
The following agenda was then read:
Zions First National would merge into Walker Bank through exchange of stock. After a reasonable period, possibly about one year, the Church would exchange the stock it received of the merged bank for stock of Firstamerica Corporation. In addition, the Church would buy at the present time a block of Firstamerica stock.
It is yet to be decided whether the proposed merged bank should operate with Walker’s state charter or Zions’ national charter.
Name of the proposed merged bank would preserve the identity of both banks. The president and other officers of Zions First National would receive proper recognition in the management. The membership of the Board of Directors would reflect the interest of both banks. It is expected that a majority of the Board would be Church members or friends of the Church. Every effort would be made to avoid the appearance that Zions First National was selling out to Walker Bank.
One, or more, representatives of the Church would be elected to the Board of Directors of Firstamerica Corporation and possibly a representative would become a member of the Executive Committee. Firstamerica’s management would encourage qualified L.D.S. leaders in areas served by affiliated banks to become members of the local bank boards.
The Church would organize a state bank to operate more as an adjunct of the Church Financial Department to serve the direct banking needs of the Church. The bank would provide no general public banking services or facilities, and make no loans.
Important Considerations
1. Would the proposed merger be to the advantage of the community?
2. Would the proposed merger, especially after the final exchange of stock for Firstamerica Corporation:
a. Free the First Presidency in the eyes of the public from the responsibility of management of the bank?
b. Free the Church from the general feeling that it is responsible for the safety of the deposits?
3. From the point of view of the public at large, would it be desirable for the Church to become the largest single stockholder in Firstamerica Corporation and have representation on the Board of Directors and possibly the Executive Committee?
4. Would such a position in Firstamerica Corporation be to the advantage of Church members living in areas served by the affiliated banks?
5. Are there reasons why we should express a preference for a state or a national
charter?
6. Is it likely that the proposed merger would be approved by the Federal Reserve
Board or the Comptroller of the Currency?
7. Is the concept of a state bank to operate more as an adjunct of the Church
Financial Department to serve the direct banking needs of the Church sound and
practical?
For purposes of clarification and analysis, the discussion is summarized under the various important considerations.
1. ‘Would the proposed merger be to the advantage of the community?’
Brothers Kennedy, Perry, and Stoddard were united in the opinion that the
proposed merger would be to the disadvantage of the community.
The proposed merger would lessen local competition. It would come as a shock to many people. This would strengthen the position of Walker Bank in relationship to First Security, and it was the general feeling that this was a motivating force behind Walker Bank’s desire for the proposed merger.
2. ‘From the point of view of the public at large, would it be desirable for the Church to become the largest single stockholder in Firstamerica Corporation and have representation on the Board of Directors and possibly the Executive Committee?’
Brothers Kennedy, Perry, and Stoddard were united in their opinion that it would be undesirable for the Church to become an important stockholder in Firstamerica Corporation and have representation on the Board of Directors.
The affiliated banks of Firstamerica are usually the second or third banks in size in the areas served. Other banks in the areas would resent the Church acquiring a substantial position in Firstamerica and attempting to encourage business toward the affiliated banks. The number of banks helped by such affiliation would be small in comparison to the number that would resent such a development.
David Kennedy is well acquainted with Frank L. King, Chairman of the Board of Firstamerica and formerly an associate of Brother Kennedy’s at Continental Illinois National Bank and Trust Company. Brother Kennedy said that Mr. King was able, agressive, and ambitious. He expressed the opinion that the church would have little or no influence over the management of Firstamerica or the local banks. Taylor Perry confirmed this appraisal and further added that the Church having representation on the Board of Firstamerica would be only ‘window dressing’ for the benefit of Firstamerica.
Taylor Perry, in particular, questioned the advisability of acquiring stock of Firstamerica at present prices, viewed from an investment point of view. He agreed that there was a favorable prospect for growth over a period of time, but emphasized that the stock is now selling at an extremely high price in relationship to assets and earnings. Firstamerica Corporation paid premium prices to acquire control of some of the affiliated banks. Brother Perry said Transamerica Corporation is considering selling some of its holdings of Firstamerica Corporation stock in view of the high price. He pointed out that nearly half of the deposits of the affiliated banks are time deposits. In order to hold these deposits, it is going to be necessary to raise the interest rate, and it may take a long period of time to overcome this increased cost. Brother Kennedy concurred in the opinion that the stock may be unattractive at current prices and indicated that he knew of investors who were considering selling the stock.
Taylor Perry stated that the Church was possibly misinformed as to the largest stockholder. One stockholder of California Bank received nearly 175,000 shares of Firstamerica Corporation when the holding company exchanged stock for the California Bank. It was also pointed out that once Firstamerica Corporation had consolidated its position and established a favorable record, large investors, such as Investment Trusts, would probably build up positions in the stock in excess of what the Church had in mind.
The opinion was expressed that it would be a disservice to all L.D.S. people employed by First Security if Zions First National were to merge with Walker Bank and become a part of Firstamerica Corporation.
3. ‘Would such a position in Firstamerica Corporation be to the advantage of Church members living in areas served by the affiliated banks?’
Brothers Kennedy, Perry, and Stoddard were united in the opinion that this would not be to the advantage of Church members, and it may be to their disadvantage.
In addition to the points discussed under Item 2, it was pointed out that the affiliated banks of Firstamerica would not be able to offer any services not now available to Church members. The fact that the Church had a substantial position in Firstamerica and was represented on its Board might even affect adversely the wholesome competitive situation which exists among banks and even lessen the banking service available to Church members. Most Church members already have banking connections and many would be disturbed if the Church acquired a position in Firstamerica and thus, actively or passively, created a feeling that the loyal members should favor the Firstamerica banks.
4. ‘Is it likely that the proposed merger would be approved by the Federal Reserve Board or the Comptroller of Currency?’
Brothers Kennedy, Perry, and Stoddard were united in the opinion that the Federal Reserve Board would not approve of the merger; and if it were approved by the Comptroller of Currency, the merger would be challenged by the Department of Justice.
Howard Stoddard was particularly informed on this situation. His bank has pending a case before the Federal Reserve Board on which they expect a ruling this afternoon. Brother Stoddard stated that in view of certain cases now pending before the Federal Reserve Board, ‘the Board could not give such approval.’ The merger would give Walker nearly 60% of the commercial bank deposits of Salt Lake City. Brother Stoddard stated that the Federal Reserve Board has established a rather definite policy that no merger would be approved if the merged bank controls as much as 50% of the deposits of the service area.
Brothers Kennedy and Stoddard were of the opinion that the Comptroller of the Currency would look upon the proposed merger with more favor than the Federal Reserve Board, but they doubted that the Comptroller of the Currency would approve of the merger; and if he gave his approval, the Department of Justice would almost certainly challenge the merger. Thus, these brethren were of the opinion that if the merger were attempted, the Church would become involved in litigation on grounds that the merger was against the welfare of the community.
Each member of the First Presidency stated that the Church would not become a party to any action that involved the risk of anti-trust litigation.
5. ‘Is the concept of a state bank to operate more as an adjunct of the Church
Financial Department to serve the direct banking needs of the Church sound and
practical?’
President Moyle, in particular, emphasized the importance of the Church having a bank which it controls to handle Church funds. An important consideration is the confidential nature of the Church business. Another important consideration is the question of safety.
No final conclusion was reached, but Brothers Kennedy, Perry, and Stoddard questioned seriously the advisability of organizing a state bank to operate more as an adjunct of the Church Financial Department. Brother Stoddard, in particular, questioned if a charter would be granted for such a limited operation.
The question was asked, if Zions First National merged with Walker, might the charter of Zions First National be continued but the business restricted to serve the needs of the church? Brother Stoddard was firm in his opinion that the Comptroller of the Currency would not permit a national charter to be used in this limited manner. Brother Kennedy concurred in this opinion.
Brother Kennedy led out in suggesting that the banking needs of the Church might be better served through use of established banking facilities.
a. Deposits: Brother Kennedy suggested that banks might be selected in regional areas and that all funds raised by wards and stakes within the regions could be sent directly to the selected regional banks. Arrangements could then be made by these regional banks to send automatically at the end of each month deposited funds to a limited number of ‘key’ banks. This arrangement would eliminate the possibility of anyone outside of the Church organization identifying the amount of Church contributions. He also expressed the opinion that if these banks were carefully selected, the funds of the Church on deposit would be even safer than when concentrated in one bank.
b. Disbursements: Brother Kennedy expressed the opinion that the disbursements of the Church could be handled with accounts at the limited number of ‘key’ banks. Again, this would eliminate any possibility of information regarding total disbursements of the Church becoming known. He stressed the confidential way in which such information is maintained by leading banks. He was of the opinion that this program would provide even less possibility of information becoming known than exists at the present time.
c. International Service: Brother Kennedy expressed the opinion that some of the large banks would be able to give the Church even better service in their international transactions than now available through Zions First National Bank. He said that all of the large banks with international departments would be able to render excellent service, and he felt that to use these banks would open up the possibility of competition and result in even better service. Asked if the Church withdrawing from Zions First National Bank would weaken the relationship with banks such as First National City, Brother Kennedy responded that this should have no adverse effect.
Brothers Perry and Stoddard agreed in general with the position taken by Brother Kennedy. It was observed that this greater use of banks throughout the Church could have a favorable influence.
6. Advisability of Church withdrawing from the General Banking Business.
Brothers Kennedy, Perry, and Stoddard were of the opinion that if the Church continued to control Zions First National Bank and the bank continued to solicit deposits, then the bank should provide banking services to its customers. They felt this was necessary from the points of view of (a) proper relations with the public; (b) the management of the bank; and (c) the minority stockholders.
There was general agreement that if the services of the bank were to be restricted, the Church should offer to acquire the stock of the minority stockholders.
Concern was expressed by Brothers Kennedy, Perry, and Stoddard that if the bank were to confine its operations to one office in the downtown area, that business would gradually move away from the bank and dissatisfaction would develop and that time would work against the operation. It was pointed out during the discussion that many good Church people, including bishops, are transferring their business to other banks because of convenience.
Nevertheless, there remained the basic question that if it is considered desirable that the Church control a bank to meet its own banking needs, it may be better to continue Zions First National Bank on a confined basis than to attempt to organize a new state bank.
7. Church Selling Zions First National Stock.
Considerable attention was given to the possibility of the Church selling its stock of Zions First National Bank, but with the bank remaining an independent institution. In case of such a sale, it was suggested that the First Presidency should withdraw entirely from the management. It was agreed that if this were done, the word ‘Zions’ should be deleted from the name. This would further inform the public that the Church had withdrawn from the management. If a satisfactory sale were made, this would permit First National Bank to go forward providing desirable banking services for the benefit of the community. This would be consistent with the interest of the minority stockholders.
However, this discussion was not carried to a conclusion. Many problems would be involved. The interest of the Church in Zions First National Bank has influenced many of the customers of the bank and employees, and the withdrawal of the Church could have a considerable impact upon the organization. It was brought out that if such a sale were to be made, it would probably be desirable to withdraw in advance of the sale or concurrently with the sale the surplus capital funds.
President Clark, in particular, stressed the importance of the First Presidency being relieved of the responsibilities that go with the management of a large, competitive bank. President Moyle expressed the feeling that the First Presidency should be tied in more closely to the management of the bank if it is to continue to operate as at present.
8. Future for Savings Deposits.
Brother Stoddard, in particular, stressed the unfavorable outlook for savings deposits with commercial banks. He expressed the opinion that until the laws are changed, savings deposits will continue to shift from commercial banks to savings and loan associations. These deposits are being attracted by the higher yield and the general feeling that has been created that funds with the savings and loan associations are as safe and as available as deposits with commercial banks. Brother Stoddard stated that Prudential Federal grew during 1959 more than all of the local commercial banks combined. He further pointed out that this situation is fraught with great danger because these associations are accepting demand deposits and investing the funds on a long-term basis. Brothers Kennedy and Perry agreed with these general observations, and all three shared the opinion that it would probably be impossible to operate satisfactorily a savings bank similar to the old Zions Savings Bank and Trust Company.
9. Business Connections of General Authorities.
Each member of the First Presidency expressed the opinion that it is desirable for the Church to maintain certain important business interests and for the General Authorities to maintain reasonable business connections. It was observed that the Church involves the lives of its members every day of the week, and it is desirable for the General Authorities to remain in contact with the everyday business world.
10. Other Business Interests of the Church.
It was pointed out that the responsibilities of the First Presidency are different with respect to the bank than the other business interests of the Church. It was recognized that if the Church withdraws from the general banking business, this need have no bearing upon the policy toward other business interests of the Church.
11. There was no consideration of Questions 2 and 6 of the agenda, as it was considered unnecessary.
Decision
The First Presidency concluded that in view of the possible legal involvements, Zions First National Bank will not consider further the proposal of merging with Walker Bank and Trust Company. President Moyle was authorized to notify John Wallace, Chairman of Walker Bank and Trust Company, of this decision.
The First Presidency again expressed appreciation to Brothers Kennedy, Perry, and Stoddard and asked that the Church be permitted to pay their expenses. These brethren, in turn, expressed appreciation for the privilege of meeting with the First Presidency and of being of some service to them and stated that they wished not to be reimbursed.
William F. Edwards
1/4/1960″
Tues., 26 Jan. 1960:
“9 to 10 a.m.
Was engaged in the meeting of the First Presidency. During the first part of the meeting, Mr. Harold Bennett of ZCMI came into the meeting, and we discussed with him matters pertaining to ZCMI’s option to repurchase Redwood Road Industrial Center Property.
After considerable discussion, it was decided that Brother Bennett give a written statement of the proposal with the exact figures according to the contract for the consideration of the First Presidency before the matter goes to the Board of ZCMI. The matter will then be considered with Pierce Brady of Zion’s Securities Corporation who is at present in Washington.
Sat., 2 Apr. 1960:
“Church Auditing Committee Statement
From 9 to 10:30 a.m. was in conference with President Henry D. Moyle.
One matter was considered was the Church Auditing Committee statement to be given at the General Conference April 6. Brother Vernon Snyder, Church Legal Counsel, reported that if the statement of the Church Auditing Committee is to be of assistance, or to avoid possible new problems it should avoid specific reference to the Corporation of the Presiding Bishop and the Corporation of the President, and confine itself to references to the financial records, reports and procedures of the Church. There would seem to be no need of our telling the world of our internal structure. The Corporation of the President of the Church is just an agency of the Church through which we transact certain legal transactions that have to be done by a corporate entity. Further, it should enclose no statement of fact or information that members of the Auditing Committee could not individually support and justify if questioned. Also, that the members of the Committee should consist of either officers or employees of the Church or auditors licensed to practice in Utah. It was agreed that the Committee should be given another name, and that the name should be Church Finance Committee. The members of the Committee to be Orval W. Adams, Harold H. Bennett, Wilford G. Edling, Glenn E. Nielson and Weston Hamilton. This committee to be sustained at the general conference.
Church Auditors
It was agreed that the Church auditors, who go out into the missions of the Church, should also be sustained at Conference. It was felt it would give them a dignity they should have; they hold a tremendously important position of trust.
The auditors will make their report in the General Conference, and then the Church Finance Committee will give their confirmation of the auditor’s report.
Fri., 22 Apr. 1960:
“Note: The Church Sells Zion’s First National Bank
My son Lawrence called at the house with a statement regarding the sale of the Zion’s First National Bank for my approval. I had him insert a paragraph as follows: ‘To continue many of its financial relations, it is probable that the Church will organize its own bank. It is not planned, however, that this bank will in any way be competitive with your bank or any other banking institution.’
Later the full statement by the First Presidency regarding the decision to take the Church out of the commercial banking business, together with the account of the sale, was published in the local newspapers. (see newspaper clippings following, and also First Presidency’s minutes of this day for signed statement and copy of Sales Agreement) (Copy of the signed statement is also enclosed herewith)
As a consequence of the above sale, I resigned this day as Chairman of the Board of Directors of Zion’s First National Bank.
April 22, 1960
THE CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS
OFFICE OF THE FIRST PRESIDENCY
Salt Lake City II, Utah
April 22, 1960
To the Board of Directors of
Zions First National Bank
Resignation of President David O. McKay, President J. Reuben Clark, Jr. and President Henry D. Moyle as officers and directors of Zions First National Bank, Salt Lake City, Utah.
The decision to take the Church out of the commercial banking business has not been an easy one to conclude. Having once been satisfied that the best interest of the Church will be served by eliminating the Church from the responsibility emanating from the ownership and management of competitive commercial banking interests, we sought a way to accomplish this purpose.
As you know, it was a necessity in 1873 for the Church to lead out in the establishment of the first bank in this territory, long before Statehood.
In banking, as in many other business activities requiring community cooperation, the Church, representing practically all of the inhabitants of this valley, was called upon to initiate, to officer, to stabilize and lend security and inspire confidence in the first businesses, industries and financial activities established in this territory. What has been called sometimes the temporal activities of the Church arose not alone from the exigencies of the early days, but also rather naturally from the concern of the Church from the beginning for the temporal as well as the spiritual welfare of its members.
As we became certain of our position we explored many avenues of withdrawal from our long established position in the financial world. This is hard to do when we have been engaged in an activity which has been conducted so long, so continuously and so pleasantly as have our banking interests.
We have been mindful of the fact that many people, both in and out of the Church, our members and friends alike, have become accustomed throughout their lives, and in many cases throughout the lives of previous generations of their families, to rely upon the safety and security afforded their bank by the Church’s interest therein. It has been this fact that has made it hardest for us to consider seriously the step we have not taken.
We still had the matter under consideration when unsolicited and uninspired by us, a group of our citizens, for the most part local men, made us an offer to purchase the Church’s stock in the Zions First National Bank at a price which to us seemed definitely fair — a price of $67.00 a share. All of these men have a broad background of experience in business and finance. They have all been eminently successful in their own right throughout their lives, and are held in the highest esteem both locally and nationally for their ability and integrity and character. This offer was made the more attractive to us because they voluntarily committed themselves to continue our banking institution as a locally owned and managed bank. They assured us that no material change in the underlying policy heretofore followed, or its officers or employees would be made. They also committed themselves to pursue the conservative and sound policies which have characterized this bank’s history and the history of its predecessors from the beginning.
We entertain the hope that the perpetuation of this bank along the lines above mentioned will insure in a better way than any other we have discovered the least possible concern to the bank’s depositors. The purchasers of our stock invite all other stockholders to retain their stock in the bank if they so desire. They have extended this invitation to us. It is contemplated that we will accept this invitation and retain our own personal stock in the bank rather than to dispose of it at this time. The purchasers, however, are committed to purchase the stock of any other stockholders of record as of this date, who would prefer to sell their present stockholdings, at the same price paid to the Church for their stock.
We have not concluded the sale of this stock to Messrs. Leland B. Flint, Roy W. Simmons and Judson S. Sayre who represent themselves and their associates in this transaction. We are delivering the stock held by the Church to the bank this morning for transfer to the purchasers.
We appreciate the invitation of the new stockholders, and many of the old, to remain as officers and directors of the company as in the past. We deem it wise and proper, however, for us to tender our resignations at this time as officers and directors of the company. We sever our connection with this great institution with sadness in our hearts. We have become attached over the years to the directors, officers and employees who have so loyally and efficiently sustained us throughout the years. We are especially sorry to have to sever our connections with the bank’s customers here and throughout the country, whose patronage we have deeply appreciated. Personally we shall continue to have a deep interest in your growth and development. We feel assured that strengthened by your new associates you will continue to add materially to the advancement of our city, state and nation with the many progressive programs and policies which you have in mind to inaugurate now and in the future.
To continue many of its financial relations, it is probably that the Church will organize its own bank. It is not planned, however, that this bank will in any way be competitive with your bank or any other banking institution.
We extend to you our best wishes, and we now ask you to accept our resignations herewith tendered, and to feel free to elect to the Board the purchasers’ nominees, Messrs. Leland B. Flint, Roy W. Simmons and Judson S. Sayre as the representatives of the group who made the sale of the Church’s stock possible under such favorable circumstances.
Our formal resignation, bearing our signatures, is attached hereto, to constitute your authority to act upon the request herein incorporated.
David O. McKay
J. Reuben Clark, Jr.
Henry D. Moyle
April 22, 1960
Zions First National Bank
Salt Lake City, Utah
Gentlemen:
We hereby resign as directors and officers of your Bank, effective immediately.
David O. McKay
J. Reuben Clark, Jr.
Henry D. Moyle”
Wed., 11 May 1960:
“11:45 to 12:10 – President Moyle came in regarding the story on my life that Fred Schluter of New Jersey is writing. We both think, due to certain conditions, that this should be held up for the time being.
May 11, 1960
From the minutes of the last meeting of the Board of Directors of the Zion’s First National Bank, the Bank having been sold by the Church on April 22, 1960.
President David O. McKay: ‘In turning over the chairmanship of the Board to my dear friend and associate, Orval Adams, I have two things definitely in mind:
‘First, the purpose of organizing the bank years ago, Zions Savings Bank and Trust Company, and later the First National Bank and then Zions First National Bank, was to serve the people; and in turning over the controlling interest to Brother Flint and his associates, this service will be continued. We have absolute confidence that the people will still be served. This is a great bank, it is a great institution, it is a strength to the community and a blessing to the people, and we are sure these services will be continued.
‘Second, there is a tinge of sorrow in leaving this group. It is a pleasure to meet once a month or more frequently and greet you as fellow laborers; there is a feeling of friendship, of brotherhood which cannot be discontinued without a tinge of regret. Bobbie Burns received a hearty welcome once up in the northern part of Scotland, and when he got back he said, ‘When death’s dark stream I ferry o’er, a time that surely will come, even in heaven itself I ask nae more than just a Hieland welcome.’
‘I have a tinge of that feeling not as your welcome but as your farewell, and I apply it to you in saying goodbye: ‘In heaven itself I ask no more than just the association and good will of such men as you on this Board.’
‘Brother Adams, you come and take your place; I step aside with best wishes and with a feeling of regret in saying goodbye to you, but we know the ideal of the bank to benefit the people will continue to be served.’
Chairman Adams, responding, reviewed the history of Zions First National Bank and the banks which had preceded it. He paid tribute to the fine men who had served the bank in addition to President McKay, President Clark, and President Moyle, mentioning Heber J. Grant, Anthony W. Ivins, Stephen L. Richards, Willard R. Smith, and Wendell M. Smoot. He also paid tribute to the members of the Quorum of the Twelve who will continue to serve the bank as directors: Joseph Fielding Smith, Harold B. Lee, and Delbert L. Stapley. Referring to the public confidence which the bank has enjoyed, Mr. Adams recounted the story of the run on Zions Savings Bank which was halted by the publication in the newspapers and on posters of a statement made by the First Presidency of the Church, the text of which reads:
‘IMPORTANT
‘Zion’s Savings Bank and Trust Company was in no way affiliated with the Deseret Savings Bank. The Church had no financial or stock interest in the Deseret Savings Bank.
‘The church is the largest stockholder in this Bank. Back of that ownership is the pledge of the strength, integrity and resources of the Church. IT WILL NOT LET THIS BANK FAIL.
‘Fortunately, this bank needs no help from the Church. It is in a strong, clean, liquid condition. It can pay off every depositor in full. Fear of its failure is not only without foundation, but positively foolish. There is no safer bank in the State or the Nation.
‘Heber J. Grant
Anthony W. Ivins.’
Chairman Adams expressed his confidence in the men who represent the controlling interest in the bank and paid tribute individually to Leland B. Flint, Roy W. Simmons, Judson S. Sayre, and W. Lamar Webb. He concluded his remarks with these words:
Chmn. Orval W. Adams: ‘This is a significant occasion. Some might say it marks the end of an era in the conduct of the affairs of a large segment of the business and financial community of Salt Lake City, but instead it means only a transition of responsibility and a challenge to maintain and continue the established principles of sound leadership that have been charted by the three men who are now retiring from the Board of Directors.
‘President McKay, President Clark, and President Moyle, who collectively and individually have devoted their lives to the fulfillment of man’s most cherished desire — the betterment of his fellowmen — have chosen to withdraw from active participation in the bank’s affairs. In doing so, they transfer their burdens to other hands with the full knowledge that during their official tenures they have nurtured and fostered the wishes of Brigham Young, founder of Zions First National Bank, who more than a century ago recognized that a sound financial institution was essential to the growth and development of the State of Utah.
‘Under the leadership of these men, the bank has been fortunate in having the wise counsel that derives from three lifetimes of devotion to duty and integrity. President McKay, churchman, scholar, and educator; President Clark, churchman, lawyer, statesman, and businessman; President Moyle, churchman, lawyer, and businessman; and President Richards who recently passed away — each in his own conscientious pursuit has contributed to the ideals of sound banking that has resulted in establishing the name of Zions First National as an enviable name in financial circles.
‘Now, in bidding them adieu, those of us who will now share in directing the bank’s future can assume those responsibilities with a keen sense of satisfaction that the success of this institution is assured if we continue to pursue the sound policies and programs that have been exemplified by the members of the First Presidency.
‘The directors, officers, and employees will never be unmindful of the great contribution made by these men.
‘God bless President McKay, President Clark, and President Moyle. We trust that they will carry on for many, many years.’
President Clark was then invited to speak.
Pres. J. Reuben Clark, Jr.: ‘I know nothing about banking and never did. I do not even know enough to be able to maintain a modest banking deposit of my own. There are some things that are elemental that have always been in my mind. I have been able to think about banking and bank problems only as I have been able to think about my own, and as I say, I am not successful and never have tried to be businesswise. I have had some experience, it is true, in rather large operations. I was in this respect, most importantly, the President of the Foreign Bond Holders Protection Council organized under Franklin Delano Roosevelt to handle in a semi-official way the credits of the world owing to citizens of the United States. Money meant so little to me, it never scared me. I cannot think about it more calmly than I can think about my own; and I might say to you men here, indicating what some have recognized in me, the most flattering thing that was ever said to me in my life, that tickled my vanity most, was an observation made by Mr. Morrow with whom I worked in Mexico for some time.
‘He said, ‘Clark, you are the least influenced by mere wealth of any man I ever knew.’ Wealth means nothing to me except a responsibility to use wealth in the right kind of way.
‘Not only have I enjoyed this association, I have valued it very highly. I am not willing to think I shall lose entire contact with this group, for the course outlined in the minutes here as to the future of the church in the banking business and in the organization of a special bank is bound inevitably to lead us back to you people on certain matters and under certain conditions, and I like to hope that the little while I am still around we can always come to you, as I feel sure we shall be able to do, with understanding hearts and a disposition to be as helpful as we can, because I can tell you with all the conviction of my soul that the influence of the church in this community is wholesome, is elemental, is unselfish, and has in mind only the good of the people; but we shall have problems, I am sure, in the future, bankwise, and I speak for ourselves and those who follow us (I shall not be here too long — I do not know, the doctor keeps pushing up my time limit).
‘I wish God’s blessings on your work. You have to have in mind returns, but to me that is secondary in the last analysis: the first consideration is soundness. I thank you, President McKay; I had no idea I would have to say anything. What I have said just comes out, just the words of an old man. God bless you!’
President Moyle was also invited to speak.
Pres. Henry D. Moyle: ‘I am very glad that we suggested at the last meeting that we come in once more. I think that it has been very much worthwhile to come here this morning, and I want to say to you that during the years I served on the Board of Directors it has been a very pleasant duty, and the few months that I have been on the Standing Committee have given to me a keener insight into the affairs of the bank, and it has given me, above all, the privilege of working closely with President McKay and President Clark and sharing daily the results of their experience which they have gained throughout their lives, and the inspiration that comes directly from an intimate association with them.
‘I have no disposition to review the past, although I have been connected with the bank in years past. My thoughts look forward. I am satisfied that the bank will not only maintain its position but will grow and progress and that the confidence that President McKay and his associates have had in Leland Flint, Roy Simmons, and Judson Sayre will be more than justified as the years go on.
‘There is no reason why the association of the church with the bank cannot continue on a local basis relatively as intimate as it has been in the past. As these minutes of the last meeting recall to our attention, they reserved the right to do what we see fit in the future and not be in any wise unfair to the transaction which we have now completed. What the future holds, of course, only the future can tell. But I am sure that we start out of this moment with the desire to do the maximum amount of business that we can do with the bank and to furnish it every assistance that is consistent with the position that we now hold with reference to it.
‘We have yet some business to transact with you, and I am sure that in all of that we will endeavor to be just as helpful now as we have been in the past.
‘I am sure of one thing: it is going to be impossible for the Presidency so to disassociate and divorce themselves from this bank that when we have dealings with you we shall not still feel as though we were part of you. It is one thing to make a physical separation of this kind, and it is an entirely different thing to adjust your thinking and your feelings. These latter are not going to be adjusted, and we are still going to be with you in our feelings and in our hopes and in our desires for your success, and in our desire also to continue to have as intimate association with everyone of you as we can.
‘It is wonderful to live your life in a community like this and see those whom you have known all your life brought together in an association of this kind, and see them succeed not only here but in their own lives and in their own businesses. I am sure that we leave you now with a prayer in our hearts for every good blessing, and certainly you have our blessing with you. Thank you.’
Pres. David O. McKay: ‘Now, I am sure the quicker we get out, the quicker you will get through with your business. In departing I would just like to say this: The strength of any organization, financial as well as religious or social, depends upon two things — first, the character of the directors and leaders, the character from the foundation of this bank and from the present has been the source of its strength. The second is the devotion of those men to the growth of the organization. ‘Losing oneself’, to use a scriptural phrase, ‘for the good of the organization’ is the secret of success. A poet-philosopher put it in these words, ‘For great and low there is but one test. Tis that each man will do his best. Who works with all the strength he can, shall never die in debt to man.’
‘ God bless you!’
Presidents McKay, Clark, and Moyle then withdrew from the meeting.”
Tues., 25 Oct. 1960:
“10 a.m. to 11:30 a.m.
Was engaged in the meeting of the Committee on Expenditures.
Following this meeting, President Moyle and I had a serious consultation with Brother Wendell B. Mendenhall of the Building Committee. At this time I cautioned Brother Mendenhall to move slowly on some of these important church buildings which is causing a vast expenditure of money; that these things had caused much concern in my mind.”
Tues., 27 Dec. 1960:
“Although the office is closed today for Christmas Holidays, was in meeting most of the day. At 8 o’clock met with the Budget Committee, consisting of Elders’ Delbert L. Stapley, Joseph L. Wirthlin, with Elder George Jarvis and Brother Olson of the Finance Department attending.
Elder Stapley stated that instructions to the Budget Committee were to keep the 1961 budget within the anticipated income of the Church, and that the assignment presents difficulties because the Committee does not know what commitments the First Presidency has made, and asked for our directions before putting the budget into final form for the Council on Disposition of Tithes.
He reviewed the report submitted, including schedules showing requests have been made totaling $107,144,000, whereas anticipated revenue is estimated at $82,500,000. His statement of the reductions which the departments have agreed are acceptable was presented, showing the budget reduced to $99,830,000, which is still $17,000,000 over the anticipated income.
We then made further reductions in the budget bringing the amount over the estimated income down to $9,000,000.
The educational budget was carefully reviewed. The Budget Committee’s analysis was first considered with relation to the Pacific Board of Education, whose projects were reviewed. I said ‘We shall hold the Church Board of Education responsible for these schools and when they go to the Islands on Church appointments, they must include visits to the schools as members of the Board of Education.’
The request for $5,000,000 for Ricks College was considered, and it was decided that this be reduced to $3,000,000.
Other ways and means of reducing the budget were considered and it was decided that we shall have the meeting of the Committee on the Disposal of tithing after the first meeting of the Council.
Thurs., 4 May 1961:
Thursday, May 4, 1961
Minutes of the Meeting of the First Presidency
Held Thursday, May 4, 1961 at 8:30 A.M.
Present: President David O. McKay, President Henry D. Moyle
Excused: President J. Reuben Clark, Jr.
Elder David L. McKay, Dr. LeRoy Kimball by appointment came into the meeting.
David Lawrence McKay, at President Moyle’s request, remained in the meeting.
Investment of Auxiliary Funds in Building and Loan Committee
President Moyle reviewed the report of George Jarvis that the Mutual Improvement Association had transferred $40,000 from savings to four deposits of $10,000 each in building and loan companies. He reported that President Christiansen of the Salt Lake Temple had asked if the temple endowment fund should not be on deposit in savings and loans companies. He said he does not personally like these and asked if the auxiliaries funds should be invested in such institutions. President McKay directed that the record be searched for instructions given in President Grant’s time that investments of auxiliary funds should be under the direction of the First Presidency.
David Lawrence McKay explained that the Zion’s First National Bank has an investment trust arrangement for investing in real estate contracts and mortgages and that the Sunday School Board has been looking into this. The income is better than the building and loan deposits. He said that since the auxiliary funds were taken over by the Corporation of the President the Sunday School Baord has submitted any question of investment to the First Presidency.
Financial Department Document
President Moyle submitted for President McKay’s signature a statement prepared by George Jarvis of the Financial Department, authorizing the transfer of funds.
Tues., 18 July, 1961:
“Extreme Ward Assessments.
Following the departure of the above brethren, I reported to my counselors that I had received letters from two different parties calling attention to the heavy assessments that had been levied against them in their wards in connection with contributions to building funds. I said that in one instance the woman writing the letter said that the Bishop had advised her to borrow $1500 from the bank to contribute to the building fund, that her son has polio and that her husband has lost his regular job and she is now asking that their names be taken from the Church records. I said that such demands are contrary to everything that we have taught, and that I think it is a subject that I might well speak upon at October Conference.”
Fri., 25 Aug. 1961:
Florida and Georgia Farms
I said that I felt that a very good choice was made in appointing Van Moss as assistant to Leo Ellsworth in taking charge of the farms in Florida and Georgia. I said that I awoke this morning with the impression that we ought to begin to develop another phase of that great ranch. I feel that with the aid of Brother Ellsworth, Brother Moss and the capable assistants there, the future of the ranch financially is established, that, however, these men, too, would in time pass away and we must look to the future of the ranch. I consider this ranch the greatest ranch in the United States and one which we do not want to sell or let go into the hands of someone else. I asked if the Brethren if they didn’t think it time for us to begin to establish wards and stakes in that ranch, and get into the hands of individual Church members orchards, dairying projects, fruit groves and all the crops which can be grown so successfully in that rich soil. I said that our aim is not to have an income to the Church alone, but our aim is to save the people and help the Lord in bringing to pass the immortality and eternal life of man, and I said that I felt that now is the time for us to begin to have places where young men who cannot make a living down here in Sanpete County; that people who have to leave Berlin and other stricken places will have to be helped, that we could help establish them on these lands requiring them to pay back to the Church what we are investing in the ranch and the Church’s investment would then be in souls.
The Brethren of the Presidency were united in this matter and felt it was a real inspiration. President Moyle suggested that if I would just give the word to Utah-Idaho Sugar Company the matter would be on its way.
Fri., 15 Sept. 1961:
“8:30 to 10:30 a.m.
Attended the regular meeting of the First Presidency.
We held a discussion regarding the sale of U.S. Treasury Bonds held by the Church. (see First Presidency’s Minutes of this day for details.)
Fri., 6 Oct. 1961:
8 a.m. — Meeting with the New Presiding Bishopric prior to their Setting Apart.
Upon invitation of the First Presidency, John H. Vandenberg and the brethren he has chosen for his counselors in the Presiding Bishopric met with us. Brother Vandenberg reported that he had met with Bishop Wirthlin and his counselors, and in a general way had reviewed what they are doing. Accompanied by Howard Barker he had been to Idaho Falls and reviewed the Idaho Falls Hospital, and the new addition that is being contemplated there. He said that the bids were opened, that they were about 8% higher than was expected, the lowest being $1,374,000, and the highest $1,507,000. He recommended that we accept the lowest.
Brother Vandenberg said that he had arranged to go to Canada with Bishop Wirthlin to get oriented regarding the situation pertaining to the Church’s ranches there.
I then explained to Bishop Vandenberg, and his counselors, Robert L. Simpson and Victor Lee Brown, that they will receive the office of bishop, which is as eternal in its ordination as the ordination to the priesthood. I said that it is true that once a bishop always a bishop. I said further that in connection with their ordination as bishops they would preside over all the bishops of the Church, and with that would hold the presidency of the Aaronic Priesthood under the Presidency of the Church, holding the office of high priest. I told them that that is really their spiritual duty. As a bishopric they will handle the finances of the Church. I told them that we should like closer cooperation in regard to buildings and financial affairs centered in the Presiding Bishopric and the Building Department.
Brother Vandenberg asked about the disbursement of tithes and I explained that the three groups of priesthood authorities designated by the Lord are responsible for the disbursement of tithes — the First Presidency of the Church, who stand at the head of the Melchizedek Priesthood in the entire Church — the Quorum of the Twelve Apostles – and the Presiding Bishopric. These groups determine once a week the amount of money that should be disbursed, and are represented in the Expenditures Committee.
I further explained that the Presiding Bishopric would be under the direction of the First Presidency and the Twelve Apostles of the Church, and that, today, in ordaining and setting them apart they would be ordained bishops and set apart as the presidency of the Aaronic Priesthood.
Setting Apart of the New Presiding Bishopric
My counselors and I (Presidents Henry D. Moyle and Hugh B. Brown), then officiated, (I being voice) in ordaining John Henry Vandenberg a bishop and conferred upon him the power and authority pertaining to the position as Presiding Bishop of the Church, and also set him apart as president of the Aaronic Priesthood in the Church of Jesus Christ of Latter-day Saints.
My counselors and I laid our hands upon the head of Elder Robert Leatham Simpson, and President Moyle was voice in ordaining him a bishop and setting him apart as first counselor to Bishop Vandenberg in the Presiding Bishopric of the Church.
My counselors and I then laid our hands upon the head of Victor Lee Brown, and President Hugh B. Brown was voice in setting him apart as second counselor to Bishop Vandenberg in the Presiding Bishopric of the Church. Brother Brown had heretofore been ordained a Bishop.
Additional Instructions to Presiding Bishopric
Following the setting apart of the Presiding Bishopric, the brethren of the Presiding Bishopric remained with us for a few moments, and I explained to them that there will be some changes and further appointments given them. Inasmuch as Bishops Simpson and Brown will require about two weeks to sever their connections with their present employers, I said that the First Presidency would consult Bishop Vandenberg regarding matters that might arise in the meantime. I said: ‘We should like to be free to use you as we feel impressed.’ Bishops Simpson and Brown said: ‘We are in your hands completely.’ I said that they would be expected to accept certain positions by virtue of this setting apart today, and that they would be consulted further relative thereto. In the meantime Bishop Vandenberg was requested to remain where he is as far as his quarters are concerned until other arrangements are made. I asked these brethren to get together and understand one another. They departed from us at 9 a.m.
Deseret Title Holding Corporation
We discussed the matter of providing an office for Bishop Wirthlin as secretary-treasurer of the Deseret Title Holding Corporation. We were agreed that it would be well to have him close to the Financial Department and that perhaps provision can be made in that department for an office for him. In regard to the salary to be paid Brother Wirthlin, it was thought that he should receive the same compensation he is now getting. President Moyle suggested that in order to justify a compensation of that kind it might be well to call him manager, as there is more justification for paying a manager a substantial salary than the secretary and treasurer. Said he was speaking on the matter from a legal standpoint. After some discussion of the matter, we decided to make Brother Wirthlin manager; Brother Henry D. Taylor, secretary, and Theodore M. Burton, treasurer.
Thurs., 26 Oct. 1961:
“Building Committee Financial Matters to be handled by Presiding Bishopric.
I called attention to the fact that Bishop John H. Vandenberg has been serving as Assistant to the Chairman of the Building Committee, and in that capacity has had charge of the finances of the Building Committee and advances made to wards in connection with their building programs. I explained that in cases where the bishops need money to complete a project, instead of stopping the project, we have been advancing money so that the building construction could continue. I said these advances go into millions of dollars, and Brother Vandenberg has handled this phase of the building program in a masterful way for the Building Committee.
I said the First Presidency has not felt that there has been the proper relationship between the Presiding Bishopric and the Building Committee regarding these funds, because the bishops have to pay the money back to the Presiding Bishopric at a later time. Inasmuch as the Presiding Bishopric is also handling the tithing funds it would seem advisable that the Presiding Bishop handle that fund also, instead of placing it with the Building Committee. It is therefore felt that Bishop Vandenberg should continue to handle the fund now that he is Presiding Bishop.
The Brethren approved of this recommendation. They mentioned certain other matters in connection with the operation of the Building Committee that they felt might wisely be adjusted.”
Wed., 1 Nov. 1961:
“9:30 – 10:30 a.m.
Following Brother Mendenhall’s departure we held the regular meeting of the First Presidency.
President Brown suggested that he thought that Brother Mendenhall should bring his problems to the First Presidency rather than going directly to me so that proper minutes could be made of the matters discussed, and the decisions made. (For details of these matters discussed, see the First Presidency’s Minutes for this date.)
Tues., 14 Nov. 1961:
“8:35 – 10 a.m.
Meeting of the First Presidency was held. At the beginning of the meeting, we met with Elders Wendell B. Mendenhall and J. Howard Dunn of the Building Committee. Brother Mendenhall reported that he had arranged to lease the grocery store on the northwest corner of Main and North Temple at $18,000 a year for three years with an option for four years. Heretofore they have paid $600 a month. Brother Mendenhall was instructed to get in touch with Zion’s Securities Corporation and arrange for this property to be turned over to the Corporation, inasmuch as it will be income-producing property.
We also had a long discussion regarding the large amounts of money earmarked for the new Church Administration Building. Genealogical Building, and the underground garage. It was decided that it was unnecessary to tie up these moneys any more than needed for construction for any given period; for instance, the Genealogical Building will cost between $5,000,000 and $6,000,000, which has been approved, and there is no need of tying up that amount of money when we shall be using only approximately $3,000,000 in 1962, and the balance the following year. I mentioned that the budget requirements for 1962 far exceed our projected income for that year, and that we must reduce our expenditures for building projects.
Fri., 24 Nov. 1961:
Following the departure of President Toronto, we met by appointment the Board of Directors of the Florida Ranch — Brother Leo Ellsworth, Donald Ellsworth, Bishop Joseph L. Wirthlin, David Lawrence McKay, Wendell B. Mendenhall, and Walter Dansie, President Henry D. Moyle, Chairman of the Board.
We had an exceptionally interesting conversation about our great holdings of property in Florida, and Brother Ellsworth presented some of his thinking and some of the things he is seeing first-hand regarding the great development that is going on in that area. (see copy of minutes following as prepared by Brother A. Hamer Reiser, who attended the meeting as secretary.)
Then Brother Ellsworth reported that he would like to put in a thousand more acres of citrus fruit, and we approved that. He said that he has under cultivation 140,000 acres, and more on top of that.
We then discussed matters pertaining to our cattle operations in Florida and Georgia, personnel matters, management, etc. (see minutes of the First Presidency for details of this.)
I commended Brother Leo Ellsworth for the great service he is rendering, and for what he has achieved in Orlando, Florida, and now in Georgia. I said that it is music to my soul to hear the report that he has given here today. I stated that the prospects of this investment the Church has made lift me into the heavens; that I don’t know whether it will be realized or not. Brother Ellsworth said that there is no question that we will be able to sell that property for a lot of money.
My son Lawrence said that he would like to move that Brother Ellsworth and President Moyle arrange to have me go down again and see this operation rather than to hear about it, and Brother Wendell B. Mendenhall seconded that motion. I asked if January would be a good month to go down, and President Moyle said that January is not as good a month as March, and that in January you are at the bottom of the trough; it is better to go down
right now than in January. I thanked them and said that I would see about it.
At this point the members of the Board of Directors of the Orlando Livestock company withdrew from the meeting.
. . . .
Brother Mendenhall then presented matters pertaining to the Sacramento River Ranch property. Said that the income from the Ranch has been over double what the Church paid for it. He stated that the property has improved until it is one of the fine spots in California; that it has done in Northern California what the Florida and Georgia ranches have done in Florida and Georgia. Said it has brought a new concept into the lives of thousands of people, business people, that count, and that it has given an entirely different concept of Mormonism to the public. I said that that is a very important part of it. Brother Mendenhall said that they had picked more than 30,000 boxes of tomatoes a day, and that that is a lot of tomatoes! They got a good contract price for them. They have 80 acres planted in almond trees, which is an exceptionally good almond ranch.
Wed., 29 Nov. 1961:
“7:30 a.m.
Murdock Travel Agency
Arrived at the office. Was busy with dictation and instructions to my secretary Clare until 8 a.m., at which time I went into the First Presidency’s room where we held a meeting with Bishop Victor L. Brown of the Presiding Bishopric, President Ernest L. Wilkinson of the B.Y.U., Elder Clyde D. Sandgren of the B.Y.U., and Elder David Lawrence McKay, attorney.
President Wilkinson presented for the group information regarding the present situation, the objectives of the organization, plans considered, rejected, and proposed plans. It was explained that the present system is entirely unsatisfactory; that the travel agency is a sole proprietorship owned by Franklin J. Murdock exclusively, and that the church has no interest in it; that the official licenses for airlines, railroads, steamship lines, etc., will terminate on the death of Brother Murdock, and in that event, in the present situation, there would be a scramble for agencies; that some of the other agencies in Salt Lake City are critical of the Murdock agency and make representations from time to time to the National Trade Association and the American Society of Travel Agencies against the Murdock Agency; that the net profits at the present time are taxed to Murdock individually at graduated income tax rates; that the present profits are approximately $60,000 a year, perhaps more, and since they are taxed to Murdock individually, he is limited to a 30% contribution to the Church under the income tax rates.
It was explained that the objectives are to perpetuate the agency licenses beyond Brother Murdock’s death or retirement, to provide a greater participation by the Church or its agencies in their profits and to minimize the taxation if we can through avoidance of the ordinary corporate tax. It was explained that any corporation that might be set up cannot do more than 20% of its business with any stockholder or any officer of the corporation, and the question was discussed as to whether or not more than 20% of the agency’ business comes from the Church. In the discussion that ensued it was the sentiment of those present that the Church does not do 20% of the business, although far more than 20% is done by the individual missionaries who go on missions; that while the Church does pay any amount in excess of $100 toward the outgoing fares of the missionaries, the balance is paid by the missionary himself or his parents, or the ward. The missionary purchases the transportation and the transaction is between the individual missionary and the agency, and not between the Church and the agency. The missionary prays for his transportation with the money that he has, and with the money that the Church gives him. I said that the very genius of our missionary work is that the missionary pays his own expenses. In cases where his transportation is in excess of $100, the Church pays the excess amount. If the Church wants to help him that would seem to be all right.
The plan of the committee as presented by President Wilkinson proposed that the travel agency be incorporated continuing the Murdock name, and that initially Brother Murdock be the sole stockholder — in this way the licenses would automatically follow, and it would evade any questions by other travel associations; further, that in sub-chapter ‘S’ (a new provision of the Internal Revenue Act), provision is made that if there are are no more than ten stockholders, the corporate tax might be eliminated, thus permitting the corporation to avoid double taxation — that Murdock sell, say 90% of the stock, or perhaps 100% to individuals designated by the Church — he could make a voluntary contribution to the church of his capital gains resulting from the sale without payment of capital gains tax; at the present time he is making a contribution, but cannot pay more than 18% of income; that the stockholders enter into buy-and-sell agreements covering stock upon retirement, or death, the stockholders to give stock options to be exercised in event of termination of services desired by the Church.
By such a plan the corporation would have perpetual existence; the agency licenses would continue in effect after Murdock’s retirement or death; it would avoid double taxation; there would be no corporate tax (the tax on several partners would be less than the tax on a sole proprietor); the stockholders would get their dividend compensation and render their services free.
President Wilkinson suggested that if one of the individual stockholders should be in the Church School System, it could be the individual who may be appointed, as has been suggested, to raise funds for the church School System; this would be one way in which he could be compensated for his services.
It was understood that this entire plan and the modifications proposed are based on the assumption that the Church is not getting more than 20% of the business.
We agreed that the stockholders should be individuals rather than the Corporation of the President. We agreed, after some discussion of the matter, that if it can be done legally, there should be no ownership of stock outside of the Church. President Moyle suggested that we arrive at a fair figure as to what Brother Murdock’s interest is worth and pay for it in cash, rather than have him take stock in the corporation; if Brother Murdock had a stock interest and he passed away, the stock would go to the family, and we would have perhaps an uninterested party as one of the stockholders; then, too, when someone else was made manager he would perhaps want to have a stock interest also. It was felt that the name of the company should be the Murdock Travel Agency, Inc. It was agreed that when the company is organized, all of the stock should be in the name of Brother Murdock; that, however, immediately after incorporation the stock could be transferred to such stockholders as might be decided upon.
The matter was left in the hands of Lawrence McKay to work out the situation, and also to decide whether the company should be incorporated in Utah or Nevada. Lawrence McKay was instructed to go ahead with the matter. Bishop Victor L. Brown will work with him, as will also President Moyle.
Fri., 1 Dec. 1961:
“8 a.m.
I met with my counselors, and the Church Budget Committee as follows: Elders Spencer W. Kimball and Delbert L. Stapley; Bishop John H. Vandenberg; George Y. Jarvis and Wallace Hight.
Elder Kimball who was spokesman for the group, presented the budget for 1962 as itemized on their worksheet. Elder Kimball said that they had brought in each of the departments and had told them, as they went over their budgets, that the requests this year were far in excess of the estimated income of the Church, although they had not given them any figures. They have all cut as much as they think they can cut. He said we may need further cuts.
The budget, as now presented, is $20,000,000 over the estimated income of the Church. After a lengthy discussion (see minutes of the First Presidency of this day for details), I said that we should, as nearly as possible, cut our budget down to our estimated income, and if we have to make capital investments, that is a different thing. It was decided that the capital investments such as Archives building, new office building, garage and foundation, retirement center, Deseret Gym, auditorium, Bureau of Information, etc., would all be eliminated from the budget; also the Oakland Temple, improvements in the Salt Lake Temple, and the Los Angeles apartments, that they are not budget items.
It was also agreed that a campaign should be started to increase the tithing income; this campaign to be a part of the Stake Conference programs for 1962, so that in every stake conference the payment of tithing would be considered. It was also felt that some disciplinary action should be taken in our expenditures in order that the wards, stakes and missions may know that we need more tithing. It was mentioned that notwithstanding there has been an increase in tithepaying, yet the percentage of tithe-payers is still not what it should be by any means.
We shall take to the Council next Thursday the decision to carry on a tithing campaign as a part of the quarterly conference program. I said that we should hope to increase the tithing by $15,000,000 in order to keep within our budget. I said I have that confidence in the people, and I think that we can do it. I indicated that I did not in any way want to retard the progress of the Church. Following the Budget Committee Meeting, we met with the Presiding Bishopric who brought to our attention many matters that come under their supervision.
Fri., 5 Jan., 1962:
“[First Presidency Meeting] Letter to Stake, Wards, Mission Districts and Branches about Tithing. President Moyle read a draft of a letter proposed to be sent to every stake president, bishop, district and branch president throughout the Church, reviewing the rapid growth of the Church and the demands upon the Church for money to provide housing for the new wards and stakes, and to extend every agency and facility to make available the blessings of the Church to all the membership, and ask the officers of the Church by precept and example to encourage members to observe the law of tithing, to assure the income to the Church being sufficient in the coming years to meet the demands which will be made by the growing Church. The letter also counsels the brethren to practice every appropriate economy, to avoid extravagance, and every form of waste and unnecessary expense.
I said that the counsel is timely, and it was agreed that the letter be sent out and that the General Authorities at quarterly conferences follow up on the subject.”
Tues., 13 Feb., 1962:
“[First Presidency Meeting] Church Archives Building
President Moyle and President Brown, after having talked with Brother Wendell B. Mendenhall, recommended that we not build the proposed archives building, thus saving seven million dollars. President Moyle stated that inasmuch as the Genealogical Department is going into the Industrial Center, they will have no need for space in this proposed building. He also stated that they now find that Eastman Kodak Company and some other camera companies, primarily Eastman, have come up with a system by which they can put on a 35 mm film the equivalent of 3600 pages of manuscript and which there can be placed in three cabinet files what normally would require 500.
President Brown in looking into microfilming methods in connection with the genealogical process also thinks that we can do our genealogical microfilming much cheaper with this new process; also, that we can photograph all the records and destroy those we do not need, that we could place the positive of the film in the big vault and the negative could be retained here. The temperature in Cottonwood so far as the vault is concerned would be perfect, that those storage vaults will be maintained at an all around similar temperature, that the space there will take care of all the genealogical records.
I referred to the library of President J. Reuben Clark, Jr., and it was suggested that perhaps these books should be sent to the Brigham Young University.
President Moyle further commented that under this new system of filming they have a card system by which almost instantly you can turn to any record and have it available, whereas now if you were to try to find a record in the basement it would be impossible.
I agreed that there was no reason for building a seven million dollar building to store something that is outmoded, and that this matter is worthy of consideration.
It was agreed that Brother Mendenhall should withhold further operations on the building until further notice.”
Fri., 16 Feb., 1962:
Financial Operations of the Church
An inquiry was received as to why the Church is engaged in financial matters. The writer encloses a copy of an article from the national magazine ‘Newsweek.’ It was mentioned that in accordance with the policy of the Church, we are not giving out word to the public regarding our investments and financial condition.
Fri., 25 May 1962:
“7:30 a.m.
By appointment at my request, I received in my private office Brother Leland B. Flint. Together we talked over a special plan for financing the vast building program for the Church. I told Brother Flint that I should like him to meet with the First Presidency and certain members of the Twelve in the office of the First Presidency this afternoon and present this financial plan. He agreed to be at the meeting at 2:30 p.m.
2:30 p.m.
Important Meeting Regarding Plan for Financing the Vast Building Program for the Church. — At this hour, I called a special meeting of my counselors – Presidents Henry D. Moyle and Hugh B. Brown – President Joseph Fielding Smith, Elder Harold B. Lee, Elder Marion G. Romney; Leland B. Flint of Zion’s First National Bank, and Graham H. Doxey, Manager of Zion’s Securities Corporation, for the purpose of explaining to these Brethren a plan which was first presented to me by Leland B. Flint, relating to the financing of the buildings that are already contemplated by the Church — for example, the Kennecott Copper Building; the New York Building, which includes Mission headquarters, Stake Center, and Apartments; the Church Office Block buildings, and underground parking facilities, etc. The plan presented will enable us to obtain the finances we need without interfering with the regular income and expenditures of the Church which will continue to be used for the erection of chapels, temples, etc.
I asked these Brethren to listen to this financial plan for the Church, so that they would be well acquainted with it pending any further changes in the leadership of the Church which may occur.
When Mr. Leland B. Flint reported that the First National Bank of New York would offer an open credit to the Zion’s Securities Corporation of twenty million dollars, to be handled through the Zion’s First National Bank, all those present at this meeting were delighted and unanimously accepted that plan in preference to the plan heretofore suggested of issuing bonds.
These presiding Brethren now share the responsibility as outlined for the financing of our present enormous building program. This plan was later presented to all the Brethren at Council Meeting held May 31, 1962.”
Sat., 14 July 1962:
Church Expenditures — Time has come for rebuilding of Church Cash Reserves
I stated in our meeting this morning that I feel that the time has come for a retrenchment, and for the rebuilding of the cash reserves of the Church; that non-producing properties must be sold so that the cash reserves of the Church can be built up. I said that I should announce this policy and purpose in the Expenditures Committee meeting today.
Minutes on this subject from the meeting of the Expenditures Committee held at 10:00 a.m. today, as follows:
’62-136. Budget and Church Funds — Amounts Available for 1962 Expenditures-Policy.
Referring to the over-all activities of the Church, President David O. McKay stated, ‘We have now reached the time when we must curtail spending and start building up our cash reserves.’ Building Committee Chairman Wendell B. Mendenhall stated that his Committee has carried forward, in recent months, an extensive analysis of real estate owned by the Church, and that plans are in readiness to offer for sale many properties for which no use is foreseen.’ (See July 19, 1962 for consultation with Graham H. Doxey, Manager of Zion’s Securities Corporation, regarding instructions to him to bring to me a list of the properties that are now at a point where they may be sold at a great profit to the Church.)
Thurs., 19 July 1962:
“8:00 – 8:30 a.m.
Met by appointment Brother Graham H. Doxey of Zion’s Securities Corporation. Items discussed with him were:
1) Z.C.M.I. Lease — I said that it should be reconsidered.
2) Brother Doxey said he would like to take his wife to Alaska — will return August 6.
3) I suggested to him that we should like the expenditures now carried on by the Building Committee and other departments of the Church reduced to a minimum, and that the Church reserves should be increased — first, by the sale of non-producing properties, which may be sold at a great profit to the Church — these should be sold and the reserves of the Church replenished. I suggested that he consult with Brother Mendenhall on some of these properties in California, after which he is to bring me a list of the properties that are now at a point where they may be sold at a profit to the Church. (See July 17 for statement at First Presidency’s Meeting and Expenditure Meeting) (see also report of Graham H. Doxey following)
Fri., 20 July 1962:
“9:05 a.m.
Brother George Jarvis of the Financial Department came into the meeting and read his report of July 19, 1962, on the status of the cash and other liquid reserves of the Church, of the non-budget income, and the non-budget assets, ‘the Church program assets,’ investment stocks and loans to Church businesses. The latter item he amplified as relates to the Florida and Georgia ranches. He also stated that the deposits in Canadian banks remain. Deposits in South Africa may be increased, he said, to take care of building projects approved. The buildings proposed for the South African Mission were briefly reviewed. I said that there was no urgency so far as South Africa is concerned.
I said I had already reported that the expenditures of the Building Committee should be reduced to a minimum, and every effort should be put forth to increase our reserves. I said I had told the chairman of Zions Securities Corporation to consult with Brother Mendenhall with a view to recommending disposing of all surplus properties and bringing any increase into the reserves. That is the instruction for the next month or so. That should be done before conference. I also mentioned that we have several million dollars worth of property in Florida, and I think we should dispose of any wisely because the value is there. I said that I think we should have under consideration the sale of some of that valuable property in Florida, that it is worth millions, and somebody should be looking intensely and intelligently upon the desire of Cape Canaveral to get some of our property there, that we should dispose of it if they want it. That will add millions to our reserves. I said that there is a feeling, unfounded but abroad, that the Mormon Church is holding property notwithstanding the desire of the government to obtain some of that at Cape Canaveral. I said if they want it, we shall sell it; we have reached the point in that investment where we should stop expenditures and bring in some sales and that will make a change in this.
Brother Jarvis mentioned briefly and reviewed the selling of some government securities at an opportune time. I said that was all right and that it was a good move.
Brother Jarvis also reviewed briefly bank deposits bearing interest. He said at Walker Bank there is a quarter of a million dollars bearing no interest, and two or three hundred thousand dollars bearing 4% interest. He said he had raised the question about the deposit bearing no interest, and has been told to leave it there. He said that until two years ago, we had many bank accounts not drawing interest, but at the request of the First Presidency most of them had been changed. Such a letter had not gone to Walker Bank asking them to change it, but we did start building up our savings account with them. Brother Jarvis said he thought it was $400,000.00 we have.
Brother Jarvis explained that four and a half-million dollars are on deposit in the National City Bank of New York, and $500,000.00 is the working balance in the checking account. It does not draw interest, but four million dollars does. He said the National City Bank has been of great service to the Church in foreign countries, saying ‘I came across that in a number of places in Europe. For example, in Switzerland, the National City Bank assured a large Swiss bank that they would stand behind us in any amount.’
Brother Jarvis explained how the computer runs off the balance sheets after the data has been put into it.
I commented that if it gets in it doesn’t take much time to get it out, but it takes time to put it in.
I expressed thanks for the presentation and stated that we would be governed accordingly. President Brown asked if Brother Jarvis would bring such a report to the First Presidency each month, and Brother Jarvis said he would. I said that I would also appreciate that.
Wed., 5 Sep., 1962:
We discussed the purchase of the Seattle radio station. Also talked about the status of the financial condition of the Church.
A discussion was also held with regards to using our Florida property assets which we shall probably need for our building program.
(See First Presidency’s minutes for details of the above mentioned matters.)
Selling of the Zion’s First National Bank by the Church
President Moyle reported that there has been a tremendous amount of talk around the building about the terrible mistake we have made by selling the bank. He said, “I hear it from all sides. I wanted you to know that the George Morris estate had 1100 shares of bank stock, and they can’t sell it. It has been with Edward L. Burton, and they can’t get a purchaser at $70.00 a share. I am going to be surprised if they get as much as we got for it. I want to call your attention to the fact that the bank has twenty millions dollars more on deposit. It had fifty-eight million in assets when we sold. With more assets they cannot sell it for more than we sold it. We sold it for $13.00 a share above its asset value, and you remember we had letters from three banks telling us it was a pretty high price.
I said, “I wouldn’t pay any attention to that.”
President Moyle replied, “I wish it could be stopped. It is all tied in with the Church being bankrupt and being broke. It is so silly. We are getting 5% on money that we could not get more than 2%. This banking business is getting so competitive that they are hiring women to go from door to door to solicit accounts. Can you imagine the President of the Church sitting at the head of an institution and asking the Relief Society to bring in accounts. This competition in the commerical banking is right at the point where the Church could not engage in it.
(the discussion continued as follows:)
Brown: I have not indicated to anyone that the Church is going broke. Lee Flint asked me to dinner with him yesterday. He explained the bank set-up. He asked me to come to dinner with him. I have not had anything to say about this sort of thing. Reports come in about the loss we have sustained.
Moyle: You can ask me and I can give you facts and figures in every detail.
McKay: I am glad we are out of the bank. I am glad we are out of it.
Moyle: We could not be in it. There is a law suit. The bank will have to sue the Eccles. You remember the Eccles are going to open a bank on the Cottonwood Mall contrary to the understanding. In working out this detail, Edwards did not get a contract that will hold water, but the bank must sue. How can we justify it with hundreds of members of the Church working for First Security. How can you justify bringing suit. I am mighty happy that we are out of it. We are still a very substantial stockholder, next to the largest.
McKay: I had hoped that we would establish the Zion’s Savings Bank and Trust Company, but we took the advice of the bankers back east. They said not to do it, and we have held that in abeyance.
Moyle: The savings bank business has gone to nothing. This Prudential Building & Loan is as big as the bank.
McKay: (To President Brown) You knew we reserved the right to establish Zion’s Savings Bank?
Brown: I think when President Moyle made his report we were told you were doing that.
Moyle: That was the advice at the time.
McKay: We took the advice of leading bankers of the United States, and they were united in saying that it would not be possible to establish a savings bank alone. I do not lose any sleep over that; that is all right. We shall present it to the Brethren. There is no worry about that.
Tues., 18 Sep., 1962:
“8:00 a. m.
Ted Cannon of the Church Information Service came in. One question he brought up was the matter of a book being written by Samuel Taylor. Brother Cannon said that Brother Taylor is trying to give a true picture of the Church’s business holdings to offset some of the articles that have been written, giving misleading stories The book will be written whether we give our approval or not, so I told Brother Cannon to cooperate with Brother Taylor in giving the correct information to him.
Wed., 31 Oct., 1962:
(2) Kluge, John – Gift of property in Florida to the Church
A telegram from Mr. E. E. Calloway, friend and attorney for John Kluge, president of Metromedia Inc., described the 1219 acres of land which Mr. Kluge offers as a gift to the Church. He said it is referred to in the south as “The Garden of Eden;” that the property has been surveyed in 1956, that the title to the property is insured. It is appraised at $250,000. It is one mile north of Bristol, Florida, and is bordered by the Apalachicola River, which is now navigable from the middle of Alabama and Georgia to the Florida line, and within two years would be navigable from Columbus to the Gulf. It has the benefit of twelve months of good weather.
President Moyle said this is a very substantial gift. Mr. Kluge was obviously emotionally affected when he was here on the occasion of the signing of the papers for the purchase of the Boston short-wave radio station.
I asked President Moyle to prepare a letter of acceptance, and also asked that Brother Ellsworth be asked to go to the property and to report his recommendations. I said “I shall feel better after Brother Ellsworth has seen it.”
President Moyle said he would call Brother Ellsworth, who is now on the Whitland property near the Georgia-Florida border. President Moyle said he would inform Mr. Kluge that we would take possession through Mr. Ellsworth whenever he desires us to do so. (See diary of October 30, 1962 for letters and telegram regarding this gift.)
Fri., 18 Jan. 1963:
“8:30 a.m.
I met with the Presiding Bishopric. President Moyle was absent, being in the hospital preliminary to having some teeth extracted, and President Brown is in South America. Bishop John H. Vandenberg and Bishop Victor L. Brown were present.
Among matters brought to my attention by them were:
2) Tithing Report for 1962 — The bishopric presented the tithing report for the year 1962, showing an increase over a year ago of 10.8 per cent. They reported also that the average per capita increase is also very satisfactory.
4) Church Contributions — I said that I am strongly of the opinion that we have reached a point in the Church in financial matters where we should limit our request for funds from the people; that we should urge them to pay their tithing and fast offerings and that each one should carry his share of the missionary work; also that they should make contributions to building funds, much of the latter contribution could be in the nature of labor. I think that the Church should take care of these other extra things. Bishop Vandenberg said he thought a study could be made to see what it would cost the Church to pay the entire ward operating expenses. The Bishop mentioned that in addition to this, we have what is called the ward budget which is for auxiliaries, basketball, Primary and things like that which cost the ward and stake a considerable sum. The Bishop explained that the MIA hires referees and has other expenses in connection with their athletic program, which items the members must pay and the Church does not participate in the cost. I said I think if we could let the people know that if they will pay their tithing and their offerings and participate in their share of the cost of buildings and take care of the missionary work and the Church would take care of the other expenses, that the Church would be ahead. By taking care of the missionary work I said I meant the people maintaining their own missionaries. The Bishop will make a study to see what the additional cost would be if such a program were adopted. In this connection, mention was made of the welfare projects. The Bishop said that very few of the welfare projects meet the commodity assessment by the Welfare Committee, that they are all supplemented by cash. I said that if the people for whom we buy the welfare farms will not work them, and in most part are incapable of working them, that I question very much the virtue of the policy of buying property in the hope of having a profit for the carrying on of the welfare work. Bishop Vandenberg felt that if the people would pay their full fast offering, we would have no need of welfare farms.
Tues., 26 Feb. 1963:
8:30 a.m.
Went into the Office of the First Presidency where we held our regular meeting.
Florida Property – Loan On
President Moyle said that Leland Flint, by appointment, met him at the First National City Bank in New York, that the bank had had its appraisers in Florida a week ago Sunday, and that a report will be coming from the bank today. The bank is considering a loan of $30 million on the property, on the value of the land alone. President Moyle said that he had told the bank that he would recommend in connection with this loan that inasmuch as they are not asking for any endorsement by the Church itself, the company would be standing by itself, that we would be willing at any time in the event the bank desired the loan to be reduced, and that in that event, if there were any failure on the part of the company to pay interest promptly, that subject to President McKay’s approval, we would sell any property at the then market necessary to keep the loan in the shape they would like it. They seemed to be entirely satisfied.
President Moyle said offers are being received to sell land there at $350 an acre. One man was told to take his offer back and bring his sights up to $1,000, and we would consider it. He estimated that it could be disposed of easily for $500 an acre.
President Brown raised a question as to whether or not it would be better to sell part of the land now than to borrow money on it. After discussion, it was felt that to proceed as planned would save Florida Company the appreciating value of the land barring serious international conflict which might change the whole structure of economic values. The nature of the proposed loan being within the appropriate operations of the company by itself and its being no charge upon the Church was considered at length.”
Fri., 1 Mar. 1963:
Contributions by Members to the Church – Cost of Operations by Church
Bishop Vandenberg reported that the total cost of operations and maintenance of ward buildings throughout the Church in the stakes, foreign as well as other stakes, and Canada, but not including the missions, is 9 million dollars annually. The local share is two and one-half million dollars, and the Church six and one-half million. He said if we pursue the idea of the Church taking care of the operation, he would estimate that the cost of the missions would be three and one-half million dollars added to the Church.
I had expressed concern about the people of the Church paying building maintenance, tithing, fast offerings, welfare, building funds and missionary funds. The ratio expense on building maintenance is 70-30. The Church pays 70 percent. President McKay had asked them to find out how much it was.
I said it had been brought to the attention of the brethren recently that faithful tithe payers paid their contributions, and they go to the bank to borrow money to make these payments. I mentioned that this should not be done. The question had come up that if every member of the Church paid an honest tithing and fast offerings and contributions to the buildings and missionary fund that should be enough, and I said that is the Lord’s plan.
Bishop Vandenberg commented that if every person paid honest fast offerings and tithing we could do real things in the Church.
President Moyle commented that not more than thirty percent of the people are paying tithing. Bishop Vandenberg added that we should try to find ways of reaching more people.
President Moyle said the presidents of the Church have always been in favor of encouraging the people to pay their tithes and fast offerings, but whether we have reached the time when we can excuse them from other contributions he did not know.”
Wed., 27 Mar. 1963:
“8:00 – 10:30 a.m.
First Presidency’s meeting held. President Moyle in London.
We first met by appointment Brother George Jarvis of the Church Finance Committee, who explained that the Church Finance Committee, which, under the direction of the First Presidency, makes report to the General Conference, will meet next Monday morning to go over the 1962 report preparatory to making its usual report as the First Presidency may direct. I approved the arrangement.
Brother Jarvis read a letter of acknowledgment to be sent to the Finance committee, expressing appreciation for the efforts of the committee to improve the financial procedure and for the assistance the committee will continue to give. It also expressed gratitude for the services of the special consultant, Harold L. Child. President Brown and I concurred in approving this letter of acknowledgment.
Brother Jarvis said that the Financial Department is preparing the Statistical report in the usual way to be presented at the General Conference on April 6.
Present Financial Condition of the Church
Brother Jarvis reviewed the present financial statement of the Church for our information, and said that he would continue to make periodic reviews, if we so desired. At the conclusion, he said if the expenditures and commitments are increased faster than income, there will be a day of reckoning, and I said that we should certainly guard against that.
We then talked about investment of the surplus funds of the Auxiliaries. Brother Jarvis said that the Relief Society, the Mutual, and probably the Primary, will want to participate in a loan the bank will make to the Associated Milk Producers. I said that we shall wait until these organizations write to us.
Collection of Church Funds Daily
Brother Jarvis reported that his department is undertaking to collect the daily funds of the auxiliaries so that none remains in the offices over night. Instead of having Brother Cannon Lund collect this fund, two messengers have been engaged to do it. He explained that Brother Lund has been responsible to the First Presidency and not to the Finance Department. I advised that there should be spread throughout the Church and throughout the world information that no funds are to be held over night in any Church Building or in any private homes of Bishops or Stake Presidents or others, but should be deposited each night in the bank. I said that this should be known as the general policy of the Church. Brother Jarvis asked if a letter should be prepared. I said that I think so, and that I think, also, that it should be known to members and non-members that we have no cash held in any meeting house or by any officer of the Church in his home.
Thurs., 25 Apr. 1963:
“8:45 to 9:45 a.m.
Meeting of the First Presidency was held. President Brown is convalescing at home.
Brussels – Property for Mission Headquarters
We first met with Brother Wendell B. Mendenhall of the Building Committee who took up the matter of purchasing a building in Brussels for the headquarters of a new mission. President Mark E. Petersen came from London to see the property. The price is $82,000 including furnishings and carpeting. With a tax of $8.200, and $5,000 an estimated cost of remodeling, would bring the total cost to $95,200. President Petersen recommends that it be purchased.
I commented that the mission homes are costing us a great deal of money to maintain according to the 1962 report.
However, I said that if Brother Petersen and Brother Biesinger approve, having gone over the property, and if they are united, there is nothing else to do but to take it. I said we cannot sit here and make any other judgment, so we had better take it. Brother Mendenhall will get the message to them so they can negotiate accordingly on this.
Brother Mendenhall read a letter from President Mark E. Petersen, of the West European Mission, sent to him by the Missionary Committee, in the contents of which that Committee concurred. Enclosed with the letter was a list of furnishings ordered for the French Mission home. President Petersen said he wished he could feel good about the expenditures, but that he could not. He said he would not furnish his own home in such luxury, nor would the Mission Presidents furnish their own homes as such, because they could not afford it. He said some of the mission homes on the continent, and in England, have taken his breath away. He said that when the people look at these furnishings, they must think that their tithing supports such luxury. He said the people receive only $30 a week, and the women come to the Church with holes in their stockings, and the children are poorly clad. The letter included comments upon the dining room furniture and other costs.
Brother Mendenhall said that the Building Committee would like to be relieved of the responsibility for furnishing these mission homes, and that they had all the mission homes to do over in the whole European area. Said that they take a list of furnishings made out to a similar list which has been approved for furnishings of mission homes; that they use the prices which have been approved for years in the furnishing of the mission homes in the United States, and that they thought these were the average type of furnishings for the living space for the mission presidents. The mission presidents indicate what they want, and that is the only way they can satisfy them without conflict. Said that the Building Committee has stayed within the standards.
I said that what President Petersen says must be true; that they are extravagant.
President Moyle then commented upon the people received by the mission presidents in the mission homes; the public officials, prominent people, governors, and mayors of cities. He also mentioned the hard wear and tear upon mission property by missionaries, and many others who come into the home, and said the quality of the furnishings must be of good grade. He said that cheap furniture was purchased for the Paris mission home, but it did not hold up and had to be replaced.
It was suggested that President and Sister Petersen be asked to take the responsibility for furnishing the Belgium-French mission home as they think it should be furnished. I said I think this is a good idea, and that if he approves of the Belgium house he would want to furnish it.
Brother Mendenhall said that he told Brother Biesinger before he left Salt Lake that he felt that we ought not to have anything to do with these mission homes, even to the picking of them, unless the European and West European Mission Presidents directed them to locate something and that they ought to do nothing with it unless directed.”
Wed., 1 May 1963:
“8:45 a.m.
Went into the meeting of the First Presidency. President Hugh B. Brown was not present, he being ill at home.
By appointment, Wendell B. Mendenhall, Howard Dunn, Floyd M. Holdaway, and H. Dyke Walton of the Church Building Committee came into the meeting.
Brother Mendenhall at first called my attention to the special charts which had been prepared so the First Presidency can visualize the presentation the Building Committee desired to make on the requests for the Church Building Missionary Program. He also explained and distributed small charts prepared on letter size paper being a reproduction of the larger charts. I expressed satisfaction with the small charts provided for each member of the First Presidency.
Brother Mendenhall asked Brother Holdaway to present and explain the charts which had been prepared by the Building Committee showing the Church Labor Missionary Program. Brother Mendenhall read the report and explanatory matter which accompanied the charts.
President Moyle commented that wherever the labor missionary plan is to be used the ratio of contribution would be 60-40 in stakes as well as in missions.
Brother Mendenhall reviewed the benefits of the labor missionary plan and said that to have the benefits of the plan the procedures must be adhered to. The people who want this think they can adapt themselves to it and are willing to do it. They don’t want to worry about plans and specifications and furnishings. They just want it done and to be relieved of it. This is what is being done.
I asked what is the difference between applying the labor system to the stakes and the missions. Brother Mendenhall replied it is doing just exactly what we are presently doing. I said that I do not see why we cannot do this, and President Moyle concurred.
Brother Mendenhall said one question should be brought up. There are some areas where young men can be called into this program. The stakes want to be in the mission program. We have several letters in which the Stake Presidents recommend that young men be called into the labor missionary program rather than into the proselyting program. They are furnishing young men into the program to go anywhere to work just as though they would be furnishing proselyting missionaries to go into the missions. As more people come into this, there will be more benefits seen, just as sure as the world it will be developing the people so much faster and if we can use a 60-40 ratio to build the missions up this would mean putting the missions in the United States on a 60-40 basis and the stakes on a a 60-40 basis.
One thing we should point out which we have not mentioned: that the ratio for maintenance should be changed anyway. At the first of next year 1964 the maintenance should be 60-40 across the board for missions and for stakes rather than for 70-30. Maintenance is costing around four million and the people are not cognizant of the necessity to take care of the property. It will not be long before the maintenance and the building will be as much as the budget for building. The people need to have a higher participation in this so they will be more diligent in participating in maintaining the buildings. That will give them 10% more participation in maintaining the buildings. This is what we recommend.
Fri., 10 May 1963:
8:30 to 11:30 a.m.
Was engaged in the meetings of the First Presidency and also of the Presiding Bishopric. Among other matters, we took up the following:
Tithing Report for April
Bishop Vandenberg presented for our information copies of the tithing report for the month of April 1963, and noted an 11.6% increase up to date in the payment of tithes. I think this is very creditable.
Fri., 13 Sept. 1963:
“Regular Meeting of the First Presidency held.
President Moyle to attend Florida Meetings
President Moyle stated that he will leave this noon to go to Florida for the meetings to be held next week, and that he will attend the Sacrament meeting in the Orlando Ward this Sunday evening, where he will be the speaker.
I advised that Brother Leo Ellsworth attend the meetings, and asked President Moyle that during his association with Brother Ellsworth he tell him that the First Presidency have in mind asking him to help in the project of diking the Utah Lake. President Moyle explained that in the meeting of the Board of Directors of Deseret Farms of Florida, consideration will be given to two matters: One, selling 2,500 acres of land to meet the tax situation; and two, to authorize the president of the Company to meet with the President of the Georgia Operations and the President of the Church to work out a plan whereby the problems of the two ranches can be solved. No details will be gone into.
Note: This was the last meeting of the First Presidency attended by President Henry D. Moyle. He became ill while speaking at the Sacrament meeting mentioned above, and word was received of his death early Wednesday morning, September 18, 1963.
Wed., 20 Nov. 1963:
Telephone Bills – Exorbitant
President Brown mentioned that it had been reported to him this morning that it is costing us over $100,000 a year for long distance telephone charges, and that our postage and freight charges are out of proportion. He said that Brother Stapley, representing the Budget Committee, is especially concerned with this. Brother Brown suggested to him and to Brother Kimball that they make a review of this whole area in their budget report this year and show us where we can save some money. I indicated approval of this request. It was agreed by all the brethren that we should have a closer control on long distance telephoning. Instances were mentioned where lengthy long distance conversations had been carried on running into large amounts. It was the sentiment of the brethren that President Brown and others make a study of this matter and bring in a definite recommendation. I asked that this be done and said that in the meantime someone in authority should okay all long distance telephone calls, at least between now and the first of the year. It was decided that a memorandum would be prepared to go to all the departments notifying them of this decision.
Tues., 26 Nov. 1963:
Budget Committee – to be Concerned Only with Tithing Funds
President Brown said that Brothers Kimball and Stapley of the Budget Committee have asked if they are entitled to know what we have by way of liquid funds as they are making up their budget for next year. President Brown called attention to the sentiment of the First Presidency a year ago to the effect that the Budget Committee has to do only with the tithes and that other income and commitments were something for the First Presidency alone to handle. I said that the committee should prepare the budget for the disbursement of tithing funds only, that the other income of the Church is something they need not worry about, and is the responsibility of the First Presidency.
Wed., 15 Jan.1964:
“11:30 a.m.
Hotel Utah – Will not lease to Marriott Chain of Hotels
Met by appointment at his request, Leland B. Flint, who presented matters pertaining to leasing the Hotel Utah to the Marriott Chain of Hotels. Brother Flint expressed himself as not in favor of leasing the Hotel, and said he had a plan for renovating the enlarging the Hotel. Will bring his plan to me on Saturday morning after he returns from New York.”
Mon., 20 Jan. 1964:
“10:30 to 12:00 Noon
My secretary, Clare, came over with a number of office matters.
John F. Kennedy Music Center – donation to from the Church
I noted in the Church Section an announcement that the Church had made a donation of $10,000 to the John F. Kennedy Center for the Performing Arts in Washington, D.C.
As I did not remember approving of this contribution, nor had I seen a letter transmitting these funds, I called President Hugh B. Brown and asked him when we had approved of this donation. He said that it was his understanding that it had been approved; however, I called Joseph Anderson and asked him to look in the minutes and see when we had approved of this amount of money being donated for this purpose. He read to me over the telephone from the minutes of the First Presidency that this matter had been brought up by President Brown at the request of Brother Willard Marriott of Washington, D.C., who is on the National Committee sponsoring the project. The minutes stated that I had asked that before making the donation I should like a report on the amount of money being donated by other churches, and then we should decide about what we should do.
However, as the decision had been made, and the money sent directly to Willard Marriott, there was nothing more to do about the matter. Several letters have been received since from members of the Church objecting to tithing money being used for this purpose. (see copy of letter of thanks for the $10,000, and newspaper clipping following)
Tues., 21 Jan. 1964:
“Church Funds – Authorization for President Tanner to Sign for Deposit of Church Funds in Canada and the United States.
I confirmed authority heretofore given to President Tanner to sign for deposits of Church funds in Canada and in the United States.”
Fri., 24 Jan. 1963:
Church Finances
We then considered some important financial matters of the Church. I verified President Tanner’s understanding that I wanted him to take the responsibility of seeing that our Church funds, long term or whatever it may be, are deposited in such a way as to bring the best rates from the banks. After a discussion of these matters, President Tanner said that he is trying to get as clear a picture of the entire financial situation as he could, and that he would like to bring to me recommendations when he thought changes should be made. I indicated my approval of his doing this.
Tues., 4 Feb. 1964:
March of Dimes Contribution
President Brown mentioned a letter that had been received from the March of Dimes people expressing appreciation for the contributions by the Church in the past and asking for a $25,000 contribution this year. It was mentioned that one year ago the Church contributed $10,000. I asked further investigation be made regarding this request, how the money is spent, etc., to determine whether or not we are justified in continuing to make these contributions. (Later, a $10,000 contribution was made to this organization.)
Expenditures Committee – Personnel of
It was reported that since Brother Benson has gone to Europe that there are only two members of the Twelve sitting on the Expenditures Committee, and the suggestion was made by President Brown that if agreeable to me Brother Stapley might be called to this service. I mentioned that it is customary to rotate this position so that all the members of the Twelve might have an opportunity to serve on the committee, and asked that we ascertain when the members of the Twelve who are now serving on the committee were appointed.
Thurs., 6 Feb. 1964:
“Kennedy, President John F. – Contribution to Cultural Memorial
I mentioned that I have received letters from Church members complaining because the Church has made a contribution of $10,000 to the John F. Kennedy Cultural Memorial in Washington, D.C. President Tanner agreed that there is nothing to be gained by publicizing these matters. This contribution was made without my approval.
Fri., 7 Feb. 1964:
Deseret News Manager
I read to the Brethren information that I have received regarding E. Earl Hawkes, who is now General Manager of the Record American in Boston, who is being considered for Manager of the Deseret News succeeding O. Preston Robinson. The information presented gave a background of Brother Hawkes’ business activities and employment since 1932. It also indicated that when Brother Hawkes took over the general managership of the paper for whom he is now working, four years ago, it showed an annual net loss picture of about $300,000, whereas it now shows a net profit of $300,000. I said Brother Hawkes would be here next Wednesday when the First Presidency would have an interview with him.
Tues., 25 Feb. 1964:
“8:00 a.m.
Deseret News – New Manager for
Brother George L. Nelson and Ernest L. Wilkinson called regarding the appointment of a new manager for the Deseret News. Earl Hawkes of Boston, whom we are considering at the present time, is with the Hearst newspapers, and he has expressed concern about whether or not he would be acceptable to my successor. I shall call Brother Hawkes later by telephone. (See following letter from George L. Nelson)
Tuesday, February 25, 1964
February 25, 1964
Confidential
President David O. McKay
47 East South Temple
Salt Lake City, Utah
Dear President McKay:
For your information, I am pleased to give you the following summary of events to date with respect to the selection of a new general manager for the Deseret News Publishing Company.
On Tuesday, February 25, 1964, I reported to you that pursuant to your authorization I had submitted to E. Earl Hawkes on February 16, 1964 an offer to come to the Deseret News Publishing Company as its general manager, with a salary and retirement benefits comparable to those which have been offered to him by his present employer. Brother Hawkes seemed to react very favorably to this proposal at the time, and promised to go over the matter and call me back within a few days. He telephoned me on Monday, February 24, 1964 and stated that he did not see how he could accept the offer and gave two reasons for his decision, namely:
First, he likes his present assignment very much and considers the opportunities there to be far greater than the Deseret News Publishing Company could offer him.
Second, he is not certain that he could do the job at the Deseret News that we would expect him to do.
Brother Hawkes offered to come out at anytime, if we would pay his expenses, and work with us in setting up policies and procedures with the Deseret News which might improve and enhance its character.
I discussed with him at some length the objections he raised, but his decision seemed to be quite firm. However, I did ask him if he would hold the decision in abeyance for a few days until I could report to you and we could get word back to him.
As you know, Brother Ernest L. Wilkinson was invited into our conference on February 25, 1964. The following conclusions were arrived at in that conference:
First, you indicated your desire to confer with Elder Joseph Fielding Smith and Elder Harold B. Lee and explain the qualifications of Brother Hawkes for this assignment. In this connection, if I can be of any assistance to you in this interview you have but to call upon me.
Second, assuming that Elders Smith and Lee are agreeable, you planned to telephone Brother Hawkes and invite him and his wife to come to Salt Lake City at our expense and confer with you, President Smith and Elder Lee. Again, if I can be of any assistance in this conference I shall be available, but, of course, I do not wish to intrude.
Third, Meanwhile, Brother Wilkinson and I have been instructed by you to investigate other possibilities to fill the vacancy.
Fourth, if it should appear that we may be unable to fill the vacancy by about April 1, 1964, you indicated that it might be possible to defer the departure of Brother Robinson accordingly.
As to the possible changes in the personnel of the Board of Directors of the Deseret News Publishing Company, you informed President Wilkinson and myself that for the present President Wilkinson’s tendered resignation is ‘in the air.’ I assume that you have under advisement and will inform us accordingly as to whether the principle will be applied uniformly that one who seeks or holds public office should be disqualified as a Director of this corporation. If that principle is applied to disqualify such person, this would seem to affect two of our directors, namely, President Wilkinson and Brother Browning. You have also indicated that if President Wilkinson is now released from the Board, it might be in the nature of a leave of absence until after his candidacy for office is determined. I humbly suggest, therefore, that if the rule is applied it might be well to fill only one vacancy at this time and to fill the other vacancy if President Wilkinson is elected to office.
I previously mentioned that in my humble opinion, one of the men who might fill such a vacancy with honor and much benefit to the corporation is Elder Thomas F. Monsen. Brother Monsen has had many years of experience in responsible positions in the Deseret News and his knowledge of the workings of the corporation would be invaluable, and I have found his judgment in all matters pertaining to the business to be excellent.
I give this information to you for whatever value it may be in the consideration of these matters.
I shall await your further instructions.
Respectfully,
G.L. Nelson
GLN.mw”
Wed., 26 Feb. 1964:
April Conference – Report for of Auditing Committee
President Tanner presented the report prepared by George Jarvis of the April Conference and also a copy of the statement read at the April Conference last year by the Church Finance Committee and asked if the same statement should be read at April Conference this year. I said that is all right. President Tanner explained that Brother Jarvis had said that heretofore in earlier years the report had included statistics and some financial information, but that the financial portion was not included in the report at the last year’s conference. He asked if appointment should be made by Brother Jarvis with the Finance Committee to go over the reports before the Conference and review the financial reports and the procedures of the department. I concurred in this suggestion.
President Tanner also read postscript to the report which gave comparative information about expenditures of 1958 to 1962 and reported that the expenditures for 1963 will be still larger. I directed that this be not included in the report at the Conference.
I directed that we shall go along with last year. This is the April Conference — we shall make the financial report in the same way. President Brown asked if that report will be on Monday, and I said yes.”
Wednesday, March 4, 1964
MINUTES OF THE MEETING OF THE FIRST PRESIDENCY
HELD WEDNESDAY, MARCH 4, 1964, AT 9:00 A.M.
Present: Presidents David O. McKay and N. Eldon Tanner. President Hugh B. Brown absent, being indisposed.
Florida and Georgia Ranches Conditions Being Studied by President Tanner
President Tanner reported information he had received about the Florida and Georgia ranch operations. He said a meeting will be held this afternoon. He explained that he is following through on getting a complete understanding of conditions; that he will report to President McKay as soon as he has all the information. He reviewed his plan to leave on March 12th after the temple meeting and to go down to the ranches over that week end and to be back March 18th if President Brown is back. President McKay said he should go whether President Brown is back or not.
IEBC, WRUL Need for Money
President Tanner reviewed the need of International Educational Broadcasting Corporation for money as presented in the letter received from President James Conkling. He explained that a note had been prepared for the Corporation to sign, the note bearing 4 1/2%. President Tanner explained that President Conkling had asked to whom the board of directors is essentially responsible. President Tanner answered ‘To the First Presidency and that the First Presidency would like 1) Copies of the minutes of the meeting of the board of directors, and 2) that these meetings should be held regularly. President Tanner said financial operations report should be submitted and a statement of plans which the board proposes to carry out should also be given to the First Presidency. This was after President Tanner had talked with Arch Madsen as President McKay had suggested.
Directors for KSL, KIRO, WRUL, IEBC and the Holding Company
President Tanner reviewed the plan for Gordon B. Hinckley as a representative of the General Authorities to be on the board of KIRO; Richard L. Evans on KSL and he said it would be wise to have one of the General Authorities on the board of WRUL so the Council would be represented throughout. There is no Latter-day Saint man in a top position on WRUL. The active manager now is vice president (Ralf Brent) who is a good man and a Catholic. President Tanner suggested Thomas Monson.
President McKay said he had informed Brother Conkling this morning that the First Presidency hold him responsible. President Tanner explained that Brother Conkling has a man in New York who is directly in charge while Brother Conkling may be in California. President Tanner said he thinks one of our men should be close to the top management of the company. He considered the present manager (Ralf Brent) to be a good man who manages the company under Brother Conkling. President Tanner said he has not heard criticism of this man; that he is a good man but as this company is to be put to use helping in missionary work to whatever extent it can, that we should have someone with the manager who can carry out this purpose. President Tanner reviewed a suggestion he had made for the organization of the proposed holding company for KSL, KIRO and WRUL; that the board members be President Brown, president, Gordon B. Hinckley for KIRO, Richard L. Evans for KSL, and that Thomas Monson be for WRUL; and the chief executives of each of the companies as other members of the board: James Conkling for WRUL, Arch Madsen, KIRO, and Lennox Murdoch for KSL. Nothing has been done yet to set up this holding company. President Brown is president. He suggested that Thomas Monson be a member of the WRUL Board. He commented that it would be wise to keep control of these companies with the General Authorities and the First Presidency. President McKay repeated that this morning he had informed Brother Conkling that the First Presidency hold him responsible and want him to report every month.
President Tanner read a letter given him by Arch Madsen, Wednesday, February 26, 1964 reporting a special stockholders meeting of the Queen City Corporation where resolutions were adopted leading to the Queen City Broadcasting Company and the Wasatch Television Company being organized into one company known as KIRO. The letter referred to the tax reporting advantage of this reorganization and gaining the benefit of high depreciation schedules. It recited that legal requirements of the Federal Communications Commission must be met as well as the requirements of the laws of the states of Utah and Washington which the officers hope to have completed in 60 days.
The next step is the implementation of the organization, the first step in this to be a selection of the board of directors. Brother Madsen then added his humble and urgent suggestion that a member of the General Authorities be named very soon to the board of directors of WRUL as a mean of integrating and coordinating the broadcast connections of the Church. He expressed a desire that these companies have the benefit of the inspired attention and guidance of the General Authorities of the Church as both KSL and KIRO now have. He expressed the opinion that WRUL needs the help of the General Authorities. The letter recited the Church’s investment in these stations and the expansion program proposed for WRUL.
President McKay expressed the wish that he had had this in mind when he talked with Brother Conkling earlier this morning. President Tanner said a meeting is being held this afternoon. He explained that he is carrying on while President Brown is away. President McKay asked that President Tanner talk with Brother Conkling about these proposals. President Tanner asked if he should speak about having a General Authority on the board of WRUL and also on the board of the Holding Company. President McKay answered in the affirmative. The present assignments were reviewed again: Gordon B. Hinckley to KIRO, Richard L. Evans to KSL, and the proposal that Thomas Monson represent the General Authorities on the board of WRUL. President McKay concurred. President McKay expressed the opinion that having a General Authority would please Brother Conkling, and President Tanner agreed.
President McKay reviewed the hope that having KSL, KIRO and WRUL together will help pay the cost of WRUL. President Tanner said one of the main reasons for organizing the holding company is to give that advantage. The present members of WRUL board were reviewed including J. Willard Marriott, David M. Kennedy, Isaac Stewart and possibly David Stoddard. President McKay considered with favor Brother Monson and President Tanner said he would come back to President McKay with it after he had talked to James Conkling. President McKay asked President Tanner to talk with him.
Deposit for Continental Bank & Trust Company
President Tanner presented George Jarvis’ inquiry as to whether or not the request of the Continental Bank & Trust Company for a Church deposit as a manifestation of confidence in the bank should be answered by making a deposit of $100,000 for nine months and $500,000 for twelve months. President McKay advised this subject be carried over for the present.
Mon., 9 Mar. 1964:
“Monday, March 9, 1964
March 9, 1964
President David O. McKay
Church of Jesus Christ of Latter-day Saints
47 East South Temple
Salt Lake City, Utah
Dear President McKay:
I am pleased to make the following report to bring up to date the facts concerning E. Earl Hawkes since my letter to you of March 4, 1964.
On the afternoon of March 5, 1964 you informed me that you had submitted to the First Presidency and reported to the Council of the Twelve the proposal for a long term contract with Brother Hawkes as outlined in our previous communications. You also stated that some questions had arisen as to the advisability of entering into a contract for nine years. We then agreed that I should meet with you on Monday, March 9, 1964 at 8:00 A.M. and that in the interim I should contact Brother Hawkes and request that he hold in abeyance our negotiations until after today. This I did.
This morning, March 9, 1964 I met with you and with your approval I telephoned Brother Hawkes from your apartment informing him of the existence of some reticence concerning the term of the contract and asked him if he would be agreeable to a five year contract. He responded that a change of employment at this time would probably be his last change and that at the expiration of five years his age would be 61, and, of course, he would have severed all ties with his present employer, thereby leaving him with a rather bleak outlook at the age of 61. With your acquiescence and approval, it was agreed that the contract should read for five years with the option in the Company either to retire Brother Hawkes at the expiration of that period, or to retain him by an extension of the existing contract until his 65th birthday, or beyond that time if mutually agreed upon. The retirement pay in either case would be the same.
We are drafting the proposed contract and will forward copies to him tomorrow. He should advise us by that time when he can commence his duties here.
You suggested that you would present this matter to your Counselors and certain members of the Twelve on Tuesday morning, March 10th, and would inform me thereafter.
Sincerely and respectfully,
G.L. Nelson
GLN/mw”
Tues., 10 Mar. 1964:
Deseret News – New General Manager for
I then told the Brethren that the principal purpose of calling this group together this morning is to discuss with them the matter of a successor to O. Preston Robinson as General Manager of the Deseret News. Brother Robinson having been called to preside over the British Mission and it was expected that he will leave April 1. I stated that after thorough investigation it had been decided that the best man available for the position is Elder E. Earl Hawkes, who is working for the Hearst Newspapers in Boston, Massachusetts; that he and his wife are members of the Church, and that he is on the Stake High Council. I said that Brother Hawkes has spent about 25 years with the Hearst people, and is probably one of the top men in the newspaper business in the United States. I read to the Brethren a letter setting forth negotiations that had been had with Brother Hawkes regarding this position and the terms of a proposed contract with Brother Hawkes, which terms propose that he enter into a five-year contract, with an option to retire Brother Hawkes at the expiration of that period or to retain him by extension of the contract for an additional four years or until his 65th birthday, the retirement pay in either case to be the same, namely, one half of his proposed salary, which it is understood would be $35,000 per year. It was mentioned that previously Brother Hawkes had suggested a nine-year contract which would carry him to his retirement age of 65, and that upon retirement he would receive 50% of his allowance annually for the remainder of his life.
I asked the brethren to express themselves individually in regard to this matter, and explained that Brother Hawkes has had some question in mind as to whether a contract entered into with the present administration would be continued by successive administrations.
The Brethren each expressed himself favorably to entering into the proposed contract with Brother Hawkes for five years with retirement as indicated. Elder Kimball mentioned that he had met Brother Hawkes at the Stake Conference in Boston day before yesterday; that he is on the High Council, and his Stake President says he is a good man; that, however, he learned from the tithing record that he paid only $100 in 1962 and $500 in 1963. The sentiment was expressed that should we employ Brother Hawkes for this position he should live up to the tithing requirement.
In discussing the matter, I explained that Brother Hawkes would be the General Manager of the Deseret News, and that he would be responsible for the editorial policy, and that those who write the editorials would be responsible to him.
The Brethren were agreed that if Brother Hawkes is the suitable man for the position, the financial arrangement should not be a deterrent. So far as the attitude of future administrations is concerned toward this arrangement, the sentiment was expressed that future Presidents of the Church would, of course, honor any contract made by the present administration.
I said that I would call Brother Hawkes today and discuss the matter with him, and present the details of the contract to the Brethren later.
Deseret News – Telephone Call to George L. Nelson Regarding E. Earl Hawke
I then telephoned to Brother Nelson and told him that I think the representatives of the Twelve favor the five-year contract, with prospects that if E. Earl Hawkes works out all right, four more years will be added. Told him that I had read his letter to the Brethren. They were united in this matter; they feel fine about it, and there was no hesitancy about the $35,000 salary. They said that he is a good man, and that we want the best. Further, there was no question on the part of the Brethren about upholding the present President’s decision in this matter. I said that gives Brother Hawkes double security, and that I think the matter is working out all right; that President Smith and Elders Kimball and Romney were united in supporting me in this.
Brother Nelson said that he would telephone to Brother Hawkes and notify him of this decision. I said that we shall have to see him and present a written contract to him.
I then told Brother Nelson to call a special meeting of the Deseret News Board right away and present the whole matter to them; that I join with them in this.”
Thurs., 12 Mar. 1964:
“8:35 a.m.
Attended the meeting of the First Presidency. We discussed the following matters:
Deseret News – Employment of E. Earl Hawkes — Meeting with Senior Members of the Twelve – Will Abide by Decision of Present Administration
I reported the meeting I had held with Presidents Brown and Tanner, President Joseph Fielding Smith, and Elders Spencer W. Kimball and Marion G. Romney, regarding the matter of a successor to O. Preston Robinson as General Manager of the Deseret News.
I reported to the Brethren at that special meeting that after thorough investigation, it had been decided that E. Earl Hawkes, who is working for the Hearst Newspapers in Boston, and is considered as one of the top men in the newspaper business in the United States, is the best man available for the Managership of the Deseret News.
I said that each of the Brethren expressed themselves individually in regard to this matter, and were in favor of hiring Brother Hawkes under the terms presented; also they expressed themselves that ‘future Presidents of the Church would, of course, honor any contract made by the present administration.’
Fri., 13 Mar. 1964:
Following Brother Biesinger’s departure, we held our regular meeting with the Presiding Bishopric.
Tithing Reports
The Presiding Bishopric submitted tithing reports for the year 1963, and report for the months 1964 through February. The first showed an increase of 11.5 percent; the second an increase of 9.6 percent.
Sat., 14 Mar. 1964:
“Saturday, March 14, 1964
March 18, 1964
President David O. McKay
Church of Jesus Christ of Latter-day Saints
47 East South Temple
Salt Lake City, Utah
Dear President McKay:
I am pleased to make the following report to bring up to date the facts concerning E. Earl Hawkes since my letter to you of March 9, 1964:
On March 10, 1964 I wrote you enclosing a draft of a proposed Agreement with E. Earl Hawkes. On March 11, 1964 a special meeting of the Board of Directors of the Deseret News Publishing Company was held and a copy of the minutes of that meeting are enclosed.
On March 13, 1964 another special meeting of the Board of Directors was held and I am pleased to enclose a copy of the minutes of that meeting.
In the late evening of Friday, March 13, 1964 E. Earl Hawkes arrived in Salt Lake City.
On the morning of Saturday, March 14, 1964 I met with you at your request and pursuant to your instructions, I conferred thereafter with Brother Hawkes as to the details of the proposed agreement with him. Thereafter, Brother Hawkes and I came to your apartment and reviewed in detail the terms of the proposed agreement as we had worked them out. All of the said details were agreeable to you and to Brother Hawkes.
You thereupon questioned Brother Hawkes as to his activity in the Church and his faithfulness in the Gospel, and his answers and assurances to you concerning these matters appeared to be entirely satisfactory to you. Brother Hawkes thereupon indicated his willingness to sign the Agreement, and you indicated your full approval thereof. It was then agreed that the Agreement should be drafted in final form and sent to Brother Hawkes to be executed by him and then submitted to the Board of Directors for final ratification at their special meeting to be held on March 24, 1963 at 3:00 o’clock P.M.
I enclose a copy of the proposed final draft of the Agreement. I have since individually canvassed all members of the Board except Brother Madsen and Brother Browning who are out of the State, and the said members have indicated their willingness to approve the Agreement.
Brother Hawkes is attempting to learn when he can leave his employment in Boston and take up his duties here and he indicated it might be sometime between now and July 1, 1964.
Respectfully and sincerely,
G.L. Nelson
GLN/mw”
Thurs., 14 May 1964:
“9:00 to 9:50 a.m.
Was engaged in the regular meeting of the First Presidency. Some of the items discussed were:
Zions Securities Corporation Management
We decided that the present manager of Zions Securities Corporation, Graham H. Doxey, should be notified by us as to just what is expected of him.
Wed., 15 July 1964:
“Minutes of the Meeting of the First Presidency
Held Wednesday, July 15, 1964, at President McKay’s Home in Huntsville, Utah at 8 a.m.
Present: Presidents David O. McKay and N. Eldon Tanner. President Hugh B. Brown in Europe.
President McKay and President Tanner met with Wendell B. Mendenhall and David Lawrence McKay from 9:15 a.m. until 10:45 and discussed with them certain matters as follows:
Polynesian Village
Brother Mendenhall reported that the board of directors of the Polynesian Village had met in Hawaii, and that the Village is now well and properly organized and functioning as it should. He reported that Mr. Holyoak, premier of New Zealand, and other dignitaries had visited the Village and all of them spoke very highly of the Village and its performance.
Brother Mendenhall explained that the organization had been operating at a loss all this year and that it was necessary for them now to borrow $150,000 to pay off their obligations and to carry on until October. He said the company would be able to pay the interest on the money and all expenses and would make a profit of $141,000 during this year.
President Tanner questioned seriously the possibility of their being able to make any profit, but expressed the hope that they would be able to show that the organization had made its expenses for the year.
After talking to Lawrence McKay and by telephone to Howard Anderson, president of the California Mission who is a director of the Polynesian Village, President McKay gave his approval for the board to borrow $150,000 from Zions’ First National Bank. The President said he felt that the Polynesian Village was doing good missionary work and providing employment for some of the students and bringing people to the area who would not otherwise come, and that we should continue with the program of the Village for the balance of the year, at which time we would take a very serious look at it and determine how to proceed from then on.
Budget for Church Buildings
Brother Mendenhall explained to President McKay that the Building Committee had used all the money budgeted for their use in 1964, and that there were approximately fifteen buildings being requested by wards or stakes or missions where the authorities in these particular units had understood that they could go forward with their buildings as their share of the money was available. Brother Mendenhall estimated that this would required $2,500,000. He reminded President McKay that when they budgeted for the year 1964 the Budget Committee had reduced their budget by approximately this amount, and that he was advised that if more money was needed he would have to make application directly to the First Presidency.
President McKay said that where the people had raised their money we should not hold up the building program, and he instructed Brother Mendenhall to give us full information regarding each building on which he would recommend that construction begin in 1964. President McKay said that each case would be dealt with on its merits.
Building Program Information to be Furnished
Brother Mendenhall mentioned that he had prepared a recap of all pertinent information pertaining to the Building Program, such as the number of buildings that were being built, the money that was spent, the cost of the different buildings, the program under which each was built and other pertinent information, which he felt should be made available to the General Authorities. He said that he had shown this to Elders Spencer W. Kimball and Marion G. Romney of the Council of the Twelve and that they questioned the advisability of making this information available to the General Authorities.
President McKay asked Brother Mendenhall to supply the members of the First Presidency with this information so that they could study it and decide to what extent it should be made available.
President McKay commended Brother Mendenhall on the fine work that he is doing and on his accomplishments in the interests of the Church.”
Thurs., 22 Oct. 1964:
“8:30 to 9:00 a.m.
Held a meeting with my counselors in the office at the Hotel. Among the matters discussed were:
Church Financial Matters – Report on
Following a discussion of the Church Financial Report for the past nine months, I indicated my approval of President Tanner’s suggestion pertaining to over-all planning whereby we could receive a monthly report regarding the financial condition of the Church. I also authorized President Tanner to continue his work in looking after financial matters.
Mon. 26 Oct. 1964:
“8:30 a.m.
Held the regular meeting of the First Presidency in my apartment in the Hotel. We discussed matters pertaining to the following:
Nauvoo Restoration Incorporated
President Tanner presented a summary of a report by A. Hamer Reiser regarding the Nauvoo Restoration, Incorporated. The trustees and officers of the Corporation are LeRoy Kimball, President and General Manager; Harold Fabian, Vice-President; A. Hamer Reiser, Secretary and Treasurer; David M. Kennedy and Willard Marriott trustees. Brother Thorpe B. Isaacson, at my request, will be added to the Board at the next meeting, November 7.
All the accounts of this Corporation are kept by the Church Central Accounting Department. The Budget Committee appropriated $375,000 for 1964, with which money they have been buying land and other things. The National Parks Service is cooperating with them to the extent that they appropriated $15,000 for historical research and dealing with the importance of the place; also that arrangements have been made for the Great River Road to pass Nauvoo precisely where the Board of Trustees have asked it to be located; the officers of Colonial Williamsburg have given without charge the consulting services of their senior Vice-President, Mr. Edwin Kendrew, and the staff has been working during 1964 on plans for the authentic restoration of the homes approved by the trustees. There were 41,000 visitors to Nauvoo during the months of May, July, and August this year. It was reported that the Brigham Young University motion picture production department is at work on a dramatic thirty-minute motion picture story on the rise and fall of Nauvoo.
A more detailed report and recommendations for Nauvoo may be found in the minutes of the First Presidency of this day.
Referring to the meeting of the Board in Nauvoo, President Tanner said that Dr. Kimball and Brother Reiser have invited him to attend this board meeting in Nauvoo, which would necessitate his leaving here November 5.
I said that I could see no reason for President Tanner’s attendance at this meeting.
I also expressed the feeling that we must curtail the activities and expenditures of this organization. President Tanner raised the question as to whether we are prepared to spend around $300,000 a year on this project, and I said ‘No’.
Following the meeting of the Brethren, I decided not to attempt to do any more today.”
Mon., 30 Nov. 1964:
9:30 a.m.
Elder Thorpe B. Isaacson came in by appointment. He discussed with me particularly the matters of the controversy in San Jose with the Church Building Committee, and the expansion program that is now in the planning stage for the Hotel Utah.
Elder Isaacson, who is a member of the Hotel Utah Board, said he thinks that the money the Hotel Utah will have to borrow may be obtained at less interest than has been suggested by Roy Simmons at the Zions First National Bank. I asked Elder Isaacson to look into this matter and see what he can find out.
11:00 a.m.
Following the departure of Elder Isaacson, I felt too tired to take care of any more problems, so did not have a meeting with my secretary as I had planned to do.
3:00 p.m.
Elder Isaacson returned to the apartment for a few moments to report that he had found that he can obtain the money for the Hotel Utah at an interest rate less than has been proposed. I told him to get in touch with Roy Simmons, and let him know that he must not pay a higher rate of interest for the money than has been offered to him (Elder Isaacson).
Thurs., 10 Dec. 1964:
“8:30 a.m.
Held the regular meeting of the First Presidency in my apartment in the Hotel. President Brown was excused, not feeling well.
The following matters were discussed:
Church Budget
President Tanner reported that the committee is working on the budget for 1965. He said that he had asked Brother George Jarvis to answer a number of questions regarding the Church’s financial condition and that he would be prepared to bring the whole picture to the President within a few days with a recommendation as to how we can curtail our expenditures. He said that our income and reserves will not justify our continuing the program we have heretofore followed, that we must avoid dipping further into our reserves. He mentioned that a tentative date for meeting the committee on the disposition of tithes had been set for Friday, December 11, that he thought, however, we should wait until after the first of the year until we have the picture clearly in mind and know just where we are going and what we are going to do. He suggested that the committee on the disposition of tithes be given as clear a picture as possible without revealing to them any information that the President does not want them to have.
I said that in making out the budget we should limit the expenditures to the estimated income. President Tanner said that in order to do this it would mean cutting our building program in half. President Tanner mentioned also the expenditures at the BYU for dormitories and other purposes, and said he thought we could curtail our activities along that line.
Church Offices – New Building
President Tanner reported meetings held by the special committee appointment to give consideration to matters pertaining to the new office building, and mentioned that John Wallace and other businessmen have said that they think we should not proceed with the building of our new building, that the Kennecott Building and the University Club building on South Temple will make available much office space, and if the Church completes this high rise building, it will mean that there will be many vacant offices in the city. They indicate that it would perhaps take ten years to adjust to the situation. President Tanner said in regard to the new office building that an effort is being made to make necessary adjustments to meet the requirements, that a committee has been appointed and is giving attention to these matters, which committee consists of Theodore Burton, Bishop Victor L. Brown, Wendell Mendenhall, Carvel Davis, Lewis Nielsen, Earl Olson, John Carr, and a Brother Eaton. President Tanner said he had met with the committee on six different occasions and more meetings will be necessary in order that all questions pertaining thereto may have proper consideration.
I asked President Tanner if any statement has been made that we are not going ahead with the building, and he said that he had made no such statement, that on the contrary he had said right along that we were going ahead with it. President Tanner thought the plans and specifications would be ready perhaps in July of 1965.
Tues., 15 Dec. 1964:
Tuesday, December 15, 1964
MEMORANDUM
CONFIDENTIAL Tuesday, December 15, 1964
TO: President Hugh B. Brown
President Nathan Eldon Tanner
FROM: President David O. McKay
After giving serious thought and study to reports that have come to me on the expenditures of the Church Building Committee, I have decided to appoint a committee consisting of Elders Delbert L. Stapley as Chairman, and LeGrand Richards, Howard W. Hunter, and Thorpe B. Isaacson as members, with the special assignment of bringing about some adjustments and reorganization of the Church Building Committee. Since Elder Isaacson already has been looking into a serious condition of building matters in the San Jose Stake and elsewhere, I have asked him to work with the Brethren named above with a view of substantially curtailing the expenditures in the Church Building Department in light of conditions that have arisen in all parts of the world in regard to extravagance, waste, etc.
I have suggested to the committee that they consult with Elder Franklin D. Richards with regard to the reorganization of the Church Building Committee, and to make a written report to me of their findings.
Sincerely yours,
David O. McKay
(President)
Thurs., 31 Dec. 1964:
“8:30 a.m.
President Tanner and I met in my private office for the regular meeting of the First Presidency, President Brown being in California for the Holidays.
We then took up official matters, some of which were as follows:
Nauvoo Restoration
The question was discussed as to the Nauvoo Restoration budget for the year 1965. It was reported that Dr. Kimball is suggesting that Nauvoo Restoration be given a budget of $360,000 for the year 1965. President Tanner explained that he was not too familiar with the project; that, however, he had met with the Board of the Nauvoo Restoration in Nauvoo recently and while there spent considerable time talking to Willard Marriott, Brother Kennedy and the other men about the situation. President Tanner said he told these brethren that if we (page missing)——————and the proceedings are televised to the people in three or four other ward buildings. It is reported that the members like this better than when they meet in the building where the services are being held if it becomes necessary for them to be a considerable distance away from the speakers.
President Tanner said that these are matters that the committee is working on. I told President Tanner that the first thing that would need consideration is the reorganization of the Building Committee. President Tanner said he would like to sit down and talk with me alone about this matter before any action is taken.”
Tues., 5 Jan. 1965:
“8:30 a.m.
Held a meeting with my counselors at which time we went over a number of letters and regular items. These are recorded in the minutes of the First Presidency.
Church Administration
The counselors then discussed with me at some length administration problems which they felt needed clarification. At this time, President Nathan Eldon Tanner expressed himself quite freely about the administrative duties of the Church. Felt disturbed and greatly concerned after their departure.
Tuesday, January 5, 1965
FIRST PRESIDENCY ADMINISTRATIVE PROBLEMS
First Presidency Meeting January 5, 1965
There were present at the meeting President David O. McKay and his counselors Hugh B. Brown and N. Eldon Tanner.
President Tanner mentioned a letter from Roy Simmons of the Zions First National Bank, attached to which letter was one from the senior vice-president and chairman of the Finance Committee of the Lincoln National Life Ins. Co. He mentioned that some time ago Roy Simmons and Gus Backman and someone else (he did not remember his name) had talked to the First Presidency about borrowing money to re-do the Hotel Utah, and approval was given to go ahead and arrange to borrow the money up to $2,000,000. Roy Simmons had said then that he felt for that kind of loan it would possibly run about 5 1/2%. President Tanner said he thought we should be able to get the money at a rate lower than 5 1/2. This question was raised in the Executive Committee and authorization was given for them to go forward. But Brother Isaacson said he could get the money for 5%. He thought that with the Church behind it we should be able to get it for less. President Tanner said at that time that the Church is not behind this that we do not sign guarantees of that nature, that the Hotel would have to stand on its own feet. It resulted in the matter being referred to Brother Isaacson and Brother Simmons. President Tanner said he had not heard a report from Brother Isaacson, that perhaps the President had as he comes to see the President alone all the time.
President McKay: He doesn’t come alone all the time.
President Tanner: He had never faced us here with you, and I know he is bringing you a lot of things about which he does not know very much. It would help you in many of your decisions if you could hear the other side of the question while he is here. It makes it very difficult, in fact I feel I cannot serve you nearly as well with the conditions as they are as I could if I knew what was going on. He comes and talks to you, tells you this and criticizes that, and so on, and we do not know a word about it until a decision is made.
President McKay: You know everything that is discussed.
President Tanner: I hadn’t heard a thing about this committee that was set up, that was talked about being set up for the building. You did not ask President Brown or me; you might have asked President Brown but you did not ask me what I thought about it. I would like to take time to sit down with you, as I said the other day, and just calmly tell you what I know and how I feel, and I want you to know that you are precluding my giving you the service and advice that I could give you. If you want it that way that is fine but I want to be sure that is what you want. I cannot understand why when Isaacson comes and talks to you he cannot talk to the three of us.
President McKay: You are making quite a charge.
President Tanner: I am and I am doing it intentionally.
President McKay: I think you haven’t a clear understanding about any of our conversations with Brother Isaacson or anyone else. This is the place where we discuss those things.
President Tanner: President McKay, we do not, we never have Isaacson here. You asked him to look into that San Jose thing without us knowing anything about it. I raised the question. I said I had started to investigate that. That doesn’t offend me but I want you to know what is going on. I would give my life for you, President McKay, and I mean that from the bottom of my heart, and I think you need to be protected about some things that are going on. In fact, I am going to be as plain and frank as I can possibly be with you. I will support you with my life if necessary but I do not think a man should come here — if you want it that way it is fine, but I do not see why you have counselors and you have him come in and talk to you and you make decisions without us knowing anything about it.
President McKay: What do you mean?
President Tanner: Setting up this committee for the building and the investigation in San Jose. Those are two things. I am not on a fight, I have no desire but your interests and the interests of the Church, and I know there are things that you do not know. We should know them with him here. You see, President McKay, this is not fair, it is not fair to anybody for you to have him come in and talk to you about these matters and we know nothing about it. That isn’t fair. I think you are getting advice that could be checked and double-checked, and not somebody talking to you an hour or two and telling you these things and getting you upset about it. I am not offended but I do not see how you can expect me to give you much help if you do not take me into your confidence. If you do not want to take me into your confidence I cannot help that.
President McKay: You are entirely wrong with that.
President Tanner: President McKay, I am not wrong. I am not accusing you of anything; all I am saying is the way it is being administered we cannot help you. That is all I am saying. I am not offended, I am not upset only as I know what is going on. That is the only interest I have. As I have said before, and I say it again, I mean it, no matter how I disagreed my thought is your thought after I know what it is, but I think you are entitled to have all the information, which you are not getting.
President McKay: I do not know of a thing that affects the Church without bringing it to you two men.
President Tanner: I do not think we have time this morning, President McKay, but I am going to write out a number of things so that you can sit down and discuss them. I do not object to Isaacson being your confidential advisor, economically and otherwise, but I say if he is going to do it without us knowing what is going on we cannot give you the help we could and we cannot give you all the facts without knowing what is going on.
President McKay: This is new to me.
President Tanner: I don’t know why you say that, because I know that Isaacson has been in here talking with you about several matters, but I do not object to that, but they are matters pertaining to the Church, they are matters we should be consulted about. If you want it to go on this way you will not hear another word from me — I am just saying you make it very difficult for me — I am not talking about Brother Brown — to administer the affairs of the Church. I came in here twice last year and recommended to you that we set up a committee to work with the building committee. Nothing was done about it. Isaacson comes in and recommends we set up a committee and you set it up immediately and the wrong kind of a committee in my opinion; they are men who are prejudiced against the building committee and their idea is to replace the leader without a study. I have nothing for Mendenhall, all I am interested in is straightforward administration of this Church, but when I made those recommendations last year no consideration was taken; Isaacson comes in here and says we should set up a committee and get rid of Mendenhall, without saying a word to us. I am working my head off with the building committee to get this thing shaped up. If you want to talk to Brother Romney, Brother Kimball, Bishop Simpson or Bishop Brown who are on the Expenditures Committee I am sure they will tell you we have made much progress this year. That does upset me. I make a recommendation and nothing is done; he comes in and makes a recommendation and tells you who should be on the committee and he goes ahead and sets up that committee.
President McKay: What committee do you refer to?
President Tanner: I refer to Isaacson, Stapley, LeGrand Richards and Howard Hunter.
President McKay: They came in and made a recommendation?
President Tanner: Why were they asked to make a recommendation? I maintain they shouldn’t have been set without consultation with your counselors. I have worked my crazy head off trying to clear this building committee, and I have asked you to set up a committee to work with us and you have ignored us, and he comes in and you set it up like that. All I want to say to you is I cannot give you the help I could give you if I were taken into your confidence, if we knew what was going on, that these decisions were made with one man sitting with you and your counselors knowing nothing about it. The only way I can work is to be straightforward, nothing less than the truth, and I want you to know exactly how I stand, and regardless of the position you take, regardless if you use Isaacson or whomever you choose as your personal advisor, I am going to have to wait until you tell me what to do instead of giving you recommendations. I am giving you a straightforward, clear example. When I sit in that Expenditures Committee, and Isaacson doesn’t know about it, I talk with Brother Romney and we discuss how we can cut out certain expenses, and then have this come on, it really shakes a person — it does me, I don’t know how it would affect anybody else. When I work with you you can rest assured — I probably shouldn’t have to say this — you can have my full confidence and support without any reservation, I will support you as a prophet, I will support you in anything you decide, but I think your decisions are being made without all the facts being given to you, and I am saying this without any feeling against you, President McKay, it is against the influence that is being brought to bear on you.
President McKay: You have a misconception of my confidence in any one man or any several men.
President Tanner: I am not complaining about that, I am pointing this out to you, that you are, there is no question about it, listening to complaints and suggestions from this particular man which you are putting into effect. I can give you more of them if you want them. I am not going to give them to you this morning but I will have my case prepared, but I am giving you one today which I wish you would explain to me.
Another thing, when you said you had asked Isaacson to make a study of that San Jose thing I said at the time that I questioned the advisability of that man making a study. Have you received a report from him?
President McKay: No.
President Tanner: Why? I would like to see his report. Now he is taking another approach. I am not supporting Mendenhall; I will support whoever is right, I will support him in everything he is doing that is right. I want to tell you Isaacson is out to get Mendenhall, Mendenhall in whom you have had the finest confidence, whom you have given your support. The last time you and I were together you congratulated him on the thing he had done, the progress he had made, the service he had given to the Church, and this man comes in and it looks like you are ready to kick him out. I can only talk frankly to you President McKay; I cannot leave things misunderstood or a question in your mind. I will be that straightforward with you and once you make your decision you will never hear another word from me.
President McKay: I am glad you mention this case; you have had confidential conversations with men independent of us on some matters.
President Tanner: I would like to know what you are referring to. If I have not been honorable and straightforward with you I would like to see the man who has. I do not know whom you mention. I do not know what thing you refer to, you cannot point to one place where I have not been as loyal to President McKay as it is possible for a man to be.
President McKay: I do not question your loyalty.
President Tanner: What kind of conference are we talking about? I love you and would give my life for you but I hate to see you being abused; you are being misinformed and you do not have all the facts and I think that is terrible.
President McKay: I do not act on anything, I leave it to you.
President Tanner: Oh yes you do. That San Jose thing and the setting up of this committee, and I know how that committee was set up.
President McKay: Didn’t we bring that here?
President Tanner: Not a word except what I read in the minutes, you were setting up this committee. You said this committee was set up to reorganize the building committee, and I said, “President McKay, I question the advisability of that; I would like to sit down and talk to you about it.’ I wanted to talk to you alone but it has come up this way and I want to express it here.
President McKay: I think you should take it up with the three of us. What are you referring to?
President Tanner: I have given it to you as plainly as I could. These two things you have taken on his advice, and set it up without referring it to us, and twice during the year I recommended that we do certain things and you ignored both of them and when he comes to you you set him up a committee. I do not object to that if that is the way you want to carry on.
President McKay: I certainly haven’t set up anything in San Jose.
President Tanner: Yes it is right in the minutes where you asked him to go and make a study and report to you. There are a lot of things in connection with that that I gave you before and you did not pay any attention to them. He tries to do all his work entirely secret. I have enough information I can show you if you will listen beyond prejudice without any question of doubt. I have nothing against Isaacson. I heard many criticisms from general authorities and others when I came here but I determined I would pay no attention to anybody else. It hit me and it certainly has hit me.
President McKay: Not intentional, I am sure of that.
President Tanner: I did not think it was done intentionally to hit me but in my administration where I am trying to serve you and this church there is nothing you would ask me to do that I would not do, but I tell you you are being misinformed.
Here is another thing, he knows what is going on in some of these discussions. Why did he have a copy of a letter we wrote Mendenhall the other day? Why would Isaacson have a copy of that letter?
President McKay: I do not know.
President Tanner: I know he had it.
President Brown: I think he has access to all our minutes.
President Tanner: I am only going to accuse where I am able to back up what I am saying. I haven’t time this morning but I think it is very serious, President McKay.
President McKay: I will say it is serious.
President Tanner: I can tell you several things. The other day in a group Isaacson said ‘Why Tanner and Mendenhall are just like that’ (two fingers together).
President McKay: What did you answer?
President Tanner: He didn’t say it to me, he said it in a group. The one who told me said ‘This is the only criticism I have heard of you in this administration.’
President McKay: Somebody is talking and he doesn’t know what he is talking about.
President Tanner: Isaacson is one of them — I can prove that to you. I will tell you two things that happened shortly after I came here. Do you remember Isaacson coming here and criticizing the First Presidency for the deal they made on the bank and the Kennecott Building, and I said ‘I am going to get Isaacson and Flint together, because I do not think this kind of thing should be going on, we should have complete harmony among our general authorities and when one of the General Authorities is out telling the people the Presidency made a bad deal I think it is terrible.’ I said ‘I am going to get Flint and Isaacson together,’ and you said ‘fine.’ I told Isaacson I wanted them to get together and he agreed. I told Flint and he said he would love to do that, that there was some misinformation going out. They agreed to get together with me. Two or three days later Isaacson called me over the phone from Flint’s office and said ‘I am here with Flint today. We have gone into this thing and I was mistaken, I did not have the facts.’ That was not significant with me at the time but he would not come to my office and go into this with me. I said at the time that I was pleased with the bigness of the man to say that he was wrong. He called me from the office where Flint was. And just last month he was criticizing this thing again. Now why does a man do that?
President McKay: I do not know.
President Tanner: Neither do I. President McKay, I have no fight with you whatever but if I am to serve you I am going to be honest with you, I am going to give you all the information, I am going to give you all the criticisms I know and everything, but I would like to have the same in return. If you want the best out of me it is the only way you can get it.
President McKay: I am glad you unburdened yourself and pointed out my weakness.
President Tanner: No, not your weakness; it is a weakness in administration in my humble judgment. I do not want to be misunderstood — if I haven’t had as much experience in economics, in business administration, of things pertaining to this as Isaacson has had I would like to see. If he is any more loyal to you than I am — he is not; there isn’t a man more loyal to you than I am, I do not care who he is. If I weren’t loyal to you I would not be talking to you. I think you are being hurt, because I want to tell you that there is nobody who has the confidence of the General Authorities less than the man you are listening to.
President McKay: I am not listening to him.
President Tanner: I don’t know why you say that because I know you are; I know you are listening to Isaacson when you are setting up a committee like that. I do not want to argue any more. I was gong to make my case, but if that is the position you are going to take, I will say, President McKay, I will do anything you ask me to do from now on.
President McKay: You do as you are doing now.
President Tanner: I cannot. I do not want any appreciation or anything of the kind, but I put my nights and my days into getting this thing organized and getting things done that need to be done, but to have this man come and upset things is very discouraging. The setting up of this committee to go into this thing the way it was set up is really disturbing to me, President McKay. Why doesn’t he come here and listen to what I have to say?
President McKay: He has no right.
President Tanner: He comes to you and knows what I have said. Imagine him having that letter that we wrote to Mendenhall. That is offensive to me.
President McKay: What letter?
President Tanner: That last letter about the way he should handle the situation. Should we just let it go the way it is?
President McKay: Did I sign it?
President Tanner: We three of us signed it, but why did he have a copy? There is no reason in the world why he should have it. I do not know whether you gave it to him or Clare gave it to him, but he had it. You asked me to carry on the best I could but I want you to know I cannot serve you as well with this kind of operation as I could otherwise, but I will do my level best, and that is the end of it. You will never hear another word from me about this, President McKay. That is what introduced it this letter from the Lincoln National Life Insurance Co. They said we discussed a five percent interest rate on a twenty year amortized schedule. However, no terms were agreed up since we have not seen the financial statement nor have we inspected the property, nor do we have a clear idea of remodeling, refurbishing,’ etc.
President McKay: I think we will consider this at another time; we will consider it again tomorrow morning.
President Brown: I think it is a very good thing this matter has been brought out to the front. I have sweat under it for two or three years and it has been very difficult. I wish I had come out with it in the beginning and told you where I stood on it, but I thought I wouldn’t do it.
President McKay: What are you saying is that I have a third counselor in Brother Isaacson.
President Brown: I think you have.
President Tanner: In some ways when you think of these two things I have mentioned, and I can mention others, I would not call him a third counselor. I say his advice is taken in preference to mine.
President Brown: You say ours.
President McKay: It isn’t true.
President Tanner: President McKay, I have definitely this morning contradicted you and I do it with love in my heart, but I do not want any misunderstandings — if I know something I want you to know that I know it, and I say you have taken his advice on this committee business after I have recommended twice and you paid no attention to me and when he comes along you set up another kind of committee and it is not the kind of committee that will do the job, it is only set up to get rid of Mendenhall and reorganize the Building Committee.
President McKay: Mendenhall was not in mind at all.
President Tanner: He certainly was in mind, there is no question about that. He is the one who was in mind, no question about it. It might not have been in your mind but when you said reorganization to me the other day that isn’t all it could mean to these men. I am too well acquainted with what is going on. It is a dead issue as far as I am concerned unless and until you want to raise it, because I will serve you to the best of my ability but I cannot do it as well as I could otherwise.
President McKay: All right, you had better go to your meeting now and we will meet tomorrow morning.
President Tanner: I want you to know I love you, I pray for you; there is nothing I would not do for you, and I feel I am not doing it unless I tell you these things.
President McKay: You give me quite a shock, quite an insight into my own weaknesses, but they have been unintentional. I have not taken Brother Isaacson into this.
President Tanner: I have just given you two definite cases where you have. There is no doubt about it, where you have taken his advice and have done what he suggested which was contrary to what I recommended; and the other, in spite of what I recommended. those are two and I can give you others. I cannot be anything less than honest with you.
President McKay: You must never be.
President Tanner: I would not do anything to offend you but I must tell you what I know and then I say it is entirely up to you what you possibly do. You have a right to ask counsel from anybody, all I am saying is that as a counselor I cannot serve you nearly as well unless I know what is going on, and I think we should know before instead of after.
President McKay: I thought I was giving you everything.”
Tues., 2 Feb. 1965:
“Minutes of the Meeting of the First Presidency
Held Tuesday, February 2, 1965, in the winter home of President David O. McKay at Laguna Beach, California.
Present: President David O. McKay and President Hugh B. Brown. President N. Eldon Tanner was in Salt Lake City. The following matters were discussed:
Sale of Z.C.M.I.
President Brown submitted a letter which he had received from Allied Stores, signed by Rex Allison, regarding the possibility of the sale of Z.C.M.I. The President indicated no such sale would be made but suggested the letter be held pending his return to Salt Lake, when we would discuss the whole matter with the manager of Z.C.M.I., Harold Bennett.
Wed., 17 Feb. 1965:
“9:00 a.m.
Hotel Utah – Loan for Remodeling
Presidents Hugh B. Brown and N. Eldon Tanner called at the Hospital and discussed with me the proposed loan to be made by the Hotel Utah.
President Tanner said the Equitable Life Insurance Company would be prepared to lend the Hotel Utah Corporation the required money for the remodeling, decorating, and furnishing of the Hotel, and if required, to pay to the Corporation of the President the loan which the Hotel has with the Corporation of the President, or in other words, to make a total loan of $4,000,000 to the hotel without any security of the Church or Zions Securities Corporation; that the money would be available at 5-1/4 percent per annum, and as the money is drawn down, the balance of the approved loan to be one half of one percent as a stand-by charge with the interest of 5-1/4 percent commencing at the time of any withdrawal.
I remarked that inasmuch as the Corporation of the President is the owner of over eighty percent stock, the lender should accept that as sufficient guarantee, but that inasmuch as the Lincoln Life had stated definitely that they would not make the loan without some other guarantee, we should, upon the recommendation of Roy Simmons of Zions First National Bank, and Brother Harold B. Lee, who is a director of Equitable Life Insurance Company, borrow the money from the Equitable.
Tues., 23 Feb. 1965:
Deseret Farms, Inc.
I showed Clare a letter from Leo Ellsworth of the Deseret Farms, Inc. in which he requested that Elder Thorpe B. Isaacson be put on the Board of Directors so that he could assist him in his plans to sell the Georgia and Florida Farms. Clare said that Coleman Madsen had called from Florida to see if I had received the letter as Brother Ellsworth was very anxious to have Brother Isaacson’s help in this matter. I instructed Clare to write a note to Lawrence on the letter asking him to see that Brother Isaacson is put on the Board.
Wednesday, March 10, 1965
March 9, 1965
Mr. Leo Ellsworth
Deseret Farms of Florida
Star Route
Melbourne, Florida
Dear Brother Ellsworth:
Please be advised that in response to your letter requesting the assistance of Elder Thorpe B. Isaacson in disposing of the properties located in Georgia and Florida, I have appointed Brother Isaacson to assist you in any way that you deem necessary.
It would be expected that upon receipt of any information, he would immediately discuss the same with me and receive my approval before any action is taken.
I have discussed this personally with Brother Isaacson, and he has agreed to accept this assignment. Therefore, I am forwarding a copy of this letter to him for his information.
With kind personal regards, I remain
Sincerely yours,
David O. McKay
(President)
cc: Elder Thorpe B. Isaacson”
Wed., 7 Apr. 1965:
“8:00 a.m.
Deseret Farms
Held a meeting in my apartment in the Hotel Utah with Leo Ellsworth, Coleman Madsen, Lawrence McKay, Elder Thorpe B. Isaacson, and Dave Hawkins, regarding the sale of Florida and Georgia Farms.”
Fri., 28 May 1965:
Deseret Farms, Georgia – Offer of Purchase
David Lawrence McKay came into the meeting. He said he had information about an offer to purchase Deseret Farms, Georgia. I asked him to present it to the Brethren.
David Lawrence McKay explained that Leo Ellsworth has had an appraisal of properties in Georgia. The written appraisal which he handed to David Lawrence McKay has a notation on the front, ‘This is a cash price.’ On further check it is obvious that the cash price is not the price which the Church would get on sale and disposal. The three million dollars which Leo has offered for the whole property, less cattle, is approximately one million dollars less that the depreciated book value of the Georgia property. In other words, the Church would lose approximately one million dollars in value, not counting the loss we have sustained in the operation by selling to Leo at this time.
There are three alternatives: one is to sell to Leo at this price, $3,100,000. He won’t go any higher. Two, another is to continue to operate it ourselves under Leo and let him try to sell it to someone else; if we do that, in my (Lawrence’s) opinion, we will lose more money than by selling it now; three, turn it right now and operate it ourselves as a separate entity and sell it ourselves, and have Leo have nothing to do with it. He might stay in Florida.
I said that would be that we would be running two big farms, one in Florida and one in Georgia.
David Lawrence McKay said, ‘Entirely separate. With no connection with each other. The Georgia property made $825,000 this year according to the audit.’
President Brown commented that according to that we could make $3,000,000 in three or four years.
David Lawrence McKay commented that favorable market prices have made this possible, although the tax return shows a loss of $2,000,000. In response to President Tanner’s question, David Lawrence McKay said that this is not in addition to the loss before. He said he had not talked with the auditor though he tried to get him yesterday.
David Lawrence McKay then said, ‘My feelings would be to turn it back to Van Moss. To do that we should say that you (President McKay) have turned the matter over to me and I have taken the responsibility, so that Leo Ellsworth will blame me and not blame you. Doing that would alienate Leo.’
I said, ‘I won’t do that!’
David Lawrence McKay said, ‘The other alternative seems to me would be to sell this to Leo and accept our loss.’
President Tanner remarked further ‘And let him operate both places after selling it.’
Lawrence said, ‘That would be my recommendation.’
President Brown asked why we should take a million dollar loss on it, and Lawrence said that it looks like we will take a million dollar loss if we see it now. Leo’s position is that this is a fictitious gain, that he (Lawrence) does not believe it, that this is true. The way Leo feels now he would likely turn it back to the Church finally on his death. A lot can happen between now and his death.
President Tanner referred to an impression he gained from Leo at one time that he was arranging for two million dollars to come to the Church from his estate.
Lawrence commented that Leo had informed him that he has set aside bonds for the Church in the amount of two and one-half million dollars.
President Tanner suggested that Leo pay four million dollars for the Georgia property and set aside one million and one-half so that the Church would be free from justifiable criticism in disposing of the property at a loss. If this were done, the place would sell for what it is worthy. If Leo would do that it would clear you and the Church and everybody.
In response to President Brown’s inquiry as to the tax obligation in the event of that arrangement being made, Lawrence said, ‘There is no problem tax-wise. The tax would come to the Church and the Church does not pay the tax. There would be no tax problem.’
There was concurrence in the suggestion that this would be better tax-wise for Leo.
President Tanner suggested that he could enter into an agreement for the four-million dollars and take care of it some way. Lawrence said that could be worked out; that is a good suggestion. He also commented that the tax returns show the loss of about four million dollars in the last three years operation in Georgia. Leo can use some of this as against his gains on his other property by combining the whole operation. There is a possibility that he can do this. It is rather tenuous.
President Tanner said, ‘I have known several who have done it.’
Lawrence explained that Leo has inquired of a tax lawyer through Coleman Madsen and Brother Madsen assures him that if he will operate this for two years, he can take advantage of the tax loss. President Tanner commented, which would mean that he would be saving six or seven hundred thousand dollars.
I asked ‘What do you recommend?’
Lawrence said, ‘I like this suggestion very much which President Tanner makes — that we urge him to reduce the amount of his gift to the Church and pay this increased million dollars for the property.’
President Brown commented that this makes a more realistic deal.
President Tanner said ‘If he will do that it will be better for the Church. He has been on the job and he has been a director. If he buys it himself we will all be open to severe criticism, if we lose one million dollars on it. I think in the end he will be better off to do this.’
Lawrence said ‘If he would do that, my recommendation would be that we sell it to him, if not that we turn it back to Van Moss.’
I asked where Van Moss is now and commented — ‘He is supposed to have made several hundred thousand dollars.’
Lawrence said last year he made for the ranch $845,000. ‘Van Moss is planning to leave on the tenth of June. I think he will stay. That will require a long term contract though. I would prefer this other arrangement if Leo would do it.’
I said we join with you in making that recommendation.
President Tanner said ‘I think it is the thing to do.’
President Brown said ‘I think if Leo knows that it came from the whole Presidency and your father —
President Tanner commented ‘I think it should be you and your father.’
I said, ‘If you please, that is the recommendation of the First Presidency.'”
Thurs., 10 June 1965:
“8:30 a.m.
Held a meeting with my counselors in the office in the apartment. Some of the matters discussed were:
Church Financial Report
Went over a copy of the financial report of the Church as of May 28. I was pleased to know that our position is much improved over what it was a year ago.
Kennecott Building
The report was given by President Tanner that Roy Simmons has finally met our terms on the cancellation of the lease agreement between Zions First National Investment Company and Zions Securities. President Tanner said that there was no question but what during the next three to five years we will have difficulty in filling the building and will suffer some loss, but in the long run we shall be much better off by adopting a program whereby Zions Securities Corporation will operate the building and lease the space therein.
President Tanner stated that Zions Securities consider it advisable that we have someone to take charge of the leasing of the building and the securing of tenants at least for the next few years, and that Brothers Graham Doxey and Taylor Merrill have recommended for this position Elbert R. Curtis. They feel that he is the best man available for this work. The Presidency approved Brother Curtis for this appointment. It was indicated that it will be necessary to pay him about $10,000 per year.
Thurs., 9 Sept. 1965:
New Zealand Ranch – Assignment of Responsibility For
President Tanner explained that Elder Delbert L. Stapley had asked whether or not responsibility for the management and direction of the ranch owned by the Church in New Zealand should be re-assigned. It has been and still is under the direction of Brother Mendenhall. His brother is the manager. The Church ranches in California are assigned to Brother Mendenhall (except Rancho LaVerne, which is assigned to Elder LeGrand Richards). Brother Mendenhall is under the direction of the First Presidency.
Fri., 13 Nov. 1965:
“Deseret Farms – Selling of Property, etc.
One of the items we discussed pertained to the Florida and Georgia ranches.
Brother Isaacson called attention to a letter addressed to Presidents David O. McKay, Hugh B. Brown and N. Eldon Tanner, and the members of the Florida Board by Coleman Madsen representing Leo Ellsworth. President Isaacson explained that the letter came to me and that I had asked that it be brought to this meeting. President Isaacson also stated that Brother Ellsworth had been asked for a budget showing his expenditures and estimated income and that he now gives us an estimated income on the calves he will sell in 1966 of $2,542,250. This is what he estimates the earnings in Florida will be next year. Sometime ago, President Isaacson explained, Brother Ellsworth was instructed to commence selling off the property. He stated that at our latest meeting it was estimated that the Church is owing 34 million dollars in Florida on which we are paying interest. He also stated that Brother Ellsworth was authorized to sell two pieces of property, one 1700 acre piece on which he had an offer of $80 per acre, and which he thought he could get $100 an acre for, that he was authorized to sell this property at $100 an acre. There was also a 50,000 acre property that he thought he could get $200 an acre for, which would be 10 million dollars. He was authorized to make contact and report to us on that, but we have heard nothing from him. He stated that while we have authorized Brother Ellsworth to sell the property in an orderly manner advantageously, we have no report of anything having been sold. President Isaacson said he was wondering if we shouldn’t urge Brother Ellsworthy to move on this matter and sell by all means. President Isaacson had been invited by Brother Ellsworth to come down and look at certain of our lands there, but he thought it unnecessary for him to go until he had something concrete to look at.
I said that we would keep the matter in President Isaacsons’ hands, he to report to the First Presidency. He also stated that it was the opinion of all concerned that we should dispose of the property as fast as we can. President Isaacson will notify Brother Ellsworth by telephone of this decision and which he will conform by letter.”
Tues., 23 Nov. 1965:
Committee on Expenditures – Elder Ezra Taft Benson to Return to Committee
President Isaacson raised a question with reference to the members of the Twelve who should meet with the Committee on Expenditures. He said that the three members of the Twelve who were the latest appointment were Spencer W. Kimball, Marion G. Romney, and Ezra Taft Benson, that Brother Benson has been away for a considerable time and no one has been appointed to take his place. Elder Isaacson asked if Brother Benson should not resume his membership on this committee, particularly in view of the fact that there will be much building in Europe. I said that Brother Benson, having been appointed to this service, should now attend the meetings as he formerly did.
Fri., 3 Dec. 1965:
“3:40 p.m.
Deseret Farms – Florida Matters
Brother Coleman Madsen of the Deseret Farms of Florida called at the apartment regarding Florida Ranch matters. He gave a report of the land that has been sold by Leo Ellsworth and prospects for future sales.
Brother Madsen said that Leo Ellsworth is very desirous that President Isaacson work closely with him on the Florida property, and suggested that he be made Vice-President of the Deseret Farms of Florida. I said that I should like President Isaacson to take care of these matters for me, and accordingly prepared a memorandum to President Isaacson informing him that I am asking the Board to appoint him as Vice-President of the Deseret Farms of Florida.
Tuesday, December 7, 1965
December 20, 1965
TO PRESIDENTS OF STAKES AND BISHOPS OF WARDS;
It has come to our attention that in some cases bishops of wards are levying assessments upon their people in order to raise funds to meet financial requirements, particularly in the matter of raising funds for building purposes. Some of these assessments, we are informed, are based on a percentage of the individual’s income, and on occasion bishops have encouraged members to give their post-dated monthly checks for each month, payable over a period of a year, which checks have at times been discounted at the bank to raise ward funds.
It is further reported that in other instances bishops have actually encouraged their people to borrow money at the bank or otherwise to pay their building fund assessment.
We feel that such assessments and policies are unwise and should not be employed. They frequently create ill feelings and misunderstandings, and have a tendency to destroy the fundamental element incident to the gathering of all Church funds, namely, that of a voluntary gift or contribution.
We therefore ask that these methods be discontinued, and that in gathering funds for Church purposes, individual members be encouraged to contribute on a voluntary basis what they feel they can afford, and specify the time in which they are able to do it. Over the years the Church authorities have advised the people to avoid debt. It would be inconsistent to encourage them to borrow money in order to pay Church assessments.
Sincerely your brethren,
David O. McKay
Hugh B. Brown
N. Eldon Tanner
Joseph Fielding Smith
Thorpe B. Isaacson
The First Presidency”
Wed., 12 Jan. 1966:
“9:30 to 12:30 p.m.
Held a long meeting with the Brethren of the First Presidency. President Smith was excused for a meeting in the Temple with the Twelve, and President Hugh B. Brown was absent, in Arizona. Many general matters were discussed, among which were the following:
Stake and Ward Assessments – To Be On a Voluntary Basis
A letter was read from the presidency of the Corpus Christi Stake referring to the First Presidency’s circular letter of December 20, 1965, to presidents of Stakes and bishops of Wards relative to levying assessments to raise funds, and suggesting that members be encouraged to contribute on a voluntary basis. The Stake Presidency mentioned the difficulty they are having the various wards in raising funds for their ward budget and other purposes, and indicated that it is their practice to levy these assessments on the basis of percentage of income. With their letter the Stake Presidency enclosed one from the Bishopric of the Corpus Christi Second Ward addressed to members of the Ward stating that it has been decided that the budget assessment for 1966 should be based on percentage of the wage earner’s salary.
We decided to answer the Stake Presidency that the people should be encouraged to pay according to their ability on a volunteer basis, and that the handbook of instructions might properly be followed as far as the budget is concerned according to the ability of the individual to pay; that, however, an assessment should not be levied as a demand request.
Wednesday, January 12, 1966
January 14, 1966
PRESIDENTS OF STAKES AND BISHOPS OF WARDS
Dear Brethren:
It has come to our attention that sometimes assessments to stakes and wards are not equitable. This is reported in connection with the raising of funds for Welfare, building construction, maintenance and such other projects which call for united action. Sometimes wards or stakes are asked to contribute on a membership basis rather than the ability to pay. Sometimes wards with large populations, many of the people being very limited in financial assets, are asked to contribute the same as wards where most of the population are affluent. The same is true when inter-stake projects are projected. The stake made up of rather poor people sometimes is asked to contribute on a population basis with the stakes where the people are more prosperous.
We, therefore, suggest that when inter-stake or inter-ward or even ward or branch projects are planned, that contributions be expected more on the ability to pay rather than on a per capita basis.
Sometimes the larger families are the least prosperous or with their prosperity and their large families they have far less money over and above their actual necessities, yet because of their large families, their assessments are far greater than many older couples who are affluent and whose families are all married off.
Sincerely yours,
THE FIRST PRESIDENCY
By David O. McKay
N. Eldon Tanner
Joseph Fielding Smith
Thorpe B. Isaacson”
Tues., 12 Apr. 1966:
Church Financial Operations of 1965
We read a letter from Wilford G. Edling of the Church Finance Committee with which we enclosed a copy of the financial committee report to the First Presidency relative to the financial operations of the Church during 1965. Among other things he states that the Committee is pleased to find and report that in 1965 the funds received exceeded expenditures by more than 21 million dollars.
Much of the spending has been cut from the Building Department under the supervision of Elder Mark B. Garff, for which I am very thankful.
Tues., 19 Apr. 1966:
Tithing Report
We looked over the quarterly tithing report and noted that in the months of January, February, and March, there was a large increase in tithing as compared with the same three months a year ago, and that the total amount received per capita is $50.6 compared with $36 in 1956.
Tues., 14 June 1966:
Tithing – Report of
We reviewed a report prepared by the Presiding Bishopric of tithes received in Stakes and Missions for the first four months of this year, indicating an increase of 13 1/2 percent over 1965. The report for the first five months, including May, showed an increase of only 11.9 percent.
Tues., 23 Aug. 1966:
Tithing – Increase Over Same Period Last Year
President Tanner handed to me financial reports for June 30 and July 31; also report of tithing. The tithing report indicated that at the end of July the tithing received for the current year is well ahead of what was collected for the same period last year, and that if during the remainder of the year the tithing funds received equals the tithing funds received for that period in 1965, we will have reached our estimated revenue income from that source.
Tues., 20 Dec. 1966:
Tithing Report
We went over a report of tithing received for the first eleven months of the year including November, which report indicates an increase over the same period a year ago of 11 percent; also that there is a per capita increase. Every year we have shown an increase per capita in tithing even though we have many new members.
Tues., 10 Jan. 1967:
“10:30 a.m.
Building Department – Decrease in Expenditures
Elder Mark B. Garff, Chairman of the Building Committee, came in and reported on financial conditions. In discussing his experiences in the Building Department since I called him to take Wendell B. Mendenhall’s place, Brother Garff said that he has saved the Church millions of dollars. He has cut down the number of employees in the Department proper from 800 to 200; has altered the plans for our Church buildings which will save the Church $50,000 on each building. Telephone bills, travel expenses, etc. have been cut. He mentioned many other ways in which the expenses have been curtailed.
I told Brother Garff that I am very appreciative of the service he has rendered, and feel satisfied that he is doing an excellent job for us.
Note by CM
At this point, Elder Garff, with tears in his eyes, said to President McKay: ‘President McKay, I did not know you too well before you called me to be the Chairman of the Building Committee, but I want to tell you that you have had a great effect on my life. I used to have quite a temper, and would let off a lot of steam, but since knowing you, I have hardly said an angry word to anyone. I have known a few great men in my day — I knew Presidents Heber J. Grant and George Albert Smith, both of whom I admired, but they did not effect me like you have. I have made quite a study of the lives of great men, and I have come to the conclusion that there are a very few men who have that indefinable something that attracts men and touches their hearts. Winston Churchill was one of those men who could lift men up and encourage them to do better. Dempsey, the fighter, has that quality to some extent. It takes generations to produce a man like you, President McKay, and I cannot tell you what you have done for me. The people of this Church love you — they will do anything for you, because you have that ‘something’ that lifts a man up and gives him a desire to do better.’
Big tears welled up into President McKay’s eyes, but he could not answer Brother Garff — he just took his hand and shook it.”
Wed., 11 Jan. 1967:
“Deseret Management Corporation – Does not Take Away Authority from the Corporation Sole of the President of the Church
President Tanner reported that in order to set up the Deseret Management Corporation, which is a Holding Company for all Church-owned corporations, it becomes necessary that the Federal Communications Committee approve Bonneville International Corporation coming in under the Deseret Management Corporation, and that in order for them to consider this, it is necessary that I, as the Corporation Sole of the Church, sign applications for this consideration. These documents have been submitted in a letter from Robert W. Barker of Washington, D.C., who is legal counsel for BIC.
I attached my signature to eight copies, two signatures on each copy.
My son, Lawrence, who was present, explained to me somewhat in detail the nature of the applications and the purpose thereof; namely, that companies which have been losing money might offset their losses against the gains made by other companies such as KIRO or KSL in the matter of tax assessments. Lawrence also explained that this new set-up does not in any way take away from the President of the Church any of his authority in these organizations; that the Church, or the Corporation Sole of the President of the Church, is still the owner.”
Tues., 18 Apr. 1967:
Tithing Report, Increase in
I was handed the tithing report for the first three months of this year, showing an increase in tithing of 8 percent over the same period last year. Comment was made that with all the new Church members, the per capita payment of tithing has increased over any previous record, that in the Stakes it shows an increase of 4 percent.
Tues., 25 Apr. 1967:
“9:30 a.m.
Building Department – Report on Progress, Plans, Savings of Money, etc.
Met by appointment the following in the apartment at the Hotel Utah: Elders Mark B. Garff, Chairman of the Building Committee, Thomas S. Monson of the Council of the Twelve, and Alvin R. Dyer, Assistant to the Twelve. Brother Garff’s secretary, Willo De Pew, was present to take the minutes of the meeting.
Elder Garff told of his trip to Hong Kong to look over land purchased by the Church Building Department when Wendell B. Mendenhall was Chairman of the Building Committee. The proposal was to build a high-rise apartment house on this property, together with a chapel and facilities for the Church. Because of his great concern regarding this commitment, Elder Garff met with Elder Gordon B. Hinckley, President Hugh B. Brown, President Keith E. Garner of the Southern Far East Mission, and Architect Emil Fetzer, and Allan Acomb of the Church Building Committee, on the property which is located on the Kowloon side of the bay and not in Hong Kong.
After investigation it was the unanimous opinion of all present that the Church should not proceed with the high rise building, and that we should use only part of the land and erect a building of minimum size to take care of the chapel and cultural hall, as well as missionary quarters. We shall have to make a minimum expenditure as demanded by the Crown Government of approximately $275,000. Elder Garff stated that he thinks because of the location of the land and its distance from any of the members that it is not a good investment, but that we should have to move forward or forfeit the money we have already put in the land which approximates $400,000, or a total expenditure at that place of $675,000.
Elder Garff then presented to the group a detailed chart showing the growth of the Church from its inception until the present time and what monies have been spent and what our problems would be in the next ten years.
Elder Garff stressed the fact that too much of our money appropriated for buildings had been spent in the geographical regions outside the United States, and membership in these areas only account for 10.7 percent of the total Church membership. The buildings in these areas are oversized and have gone far beyond the ability of the local people to make a contribution in keeping with the size of the building, and in some cases the people in these areas are not even maintaining the buildings.
Elder Garff mentioned that if the Asiatic people were ever to accept the Gospel in numbers, because of the density of their population, there would be an in-balance and we would be dominated by a preponderance of Asiatic people. Elder Dyer said that the revelations which came to the Prophet Joseph Smith were to the effect that people would gather from all nations to Zion here in America; that this is the place where the Saints should be gathered.
At this point Elder Monson stated that the fruitful filed for activity of missionaries is here in the United States; that the most fruitful field we have is up and down the West Coast in the Continental United States; that in these areas the people could make far greater financial contributions to the Church than those in foreign areas. Elder Garff said that the fact of the matter is that the only place in the world we have any financial strength and great spiritual strength is in the Continental United States, also we could not continue to put approximately 30 percent of our budgeted money for chapels in foreign areas where we have only 10 percent of the Church population, because this has put us in a position where we are now lagging by 300 buildings in the United States.
After telling of the expenditures in the Building Department during the past few years, Elder Garff said that the present Committee has returned to the Church $32,000,000, and that through this savings there should be enough to construct the general Church Office Building whenever I wished to go forward with it.
Elder Monson made the statement that Elder Garff and his co-workers have done a wonderful job, and that this can definitely be seen by the program and changes which have taken place in the procedures of the Building Department, and he definitely felt the Lord had blessed Elder Garff and was restoring to him his health; that he had gone about his work quietly and at no time has belittled or spoken despairingly about his predecessors, and that Elder Garff had gotten the job on its way.
I expressed my gratitude and pleasure with the entire report, and told Elder Garff to continue with the policies he is now following. I repeated to him that directions concerning his work will come directly from me; that he is to deal directly with me in all his affairs.
As Elder Garff said good-bye and shook my hand, we both had tears in our eyes, and I said: ‘Our agreement still stands; you are working for me, and you take your orders from me and no one else.’
I told Brother Garff also that I was interested and satisfied with his entire report today, and that I had been greatly enlightened regarding the problems of the Building Department, and that I will support him in all his endeavors, and that I shall help him in any way possible.
Tuesday, April 25, 1967
CONFIDENTIAL
April 25, 1967. Minutes of the meeting held in President David O. McKay’s suite in the Hotel Utah at 9:30 a.m. Those present were: President David O. McKay, Elder Mark B. Garff (Chairman of the Church Building Committee), Elder Alvin R. Dyer (Assistant to the Council of the Twelve), Elder Thomas S. Monson of the Council of the Twelve and Elder Willo DePew (Mark B. Garff’s secretary) took the Minutes: Elder Garff was graciously received by the President and after exchanging greetings, Elder Garff asked if the President could stand the strain of going through a lengthy report showing the position of the Church Building Department, its past expenditures and future prognostications. The President stated he was more than willing and was ready to proceed.
Elder Garff in a short resume reported on his trip to Hong Kong stating that in past years the Church Building Department had purchased land from the Crown Government of Hong Kong with agreement that we would utilize the land within a certain period of time and that this agreement was entered into before Elder Garff became Chairman of the Building Committee. The proposal was to build a high rise apartment house on this property, together with a chapel and facilities for the Church. Because of the great concern regarding this commitment, Elder Garff met with Elder Gordon B. Hinckley, President Hugh B. Brown, President Keith E. Garner (of the Southern Far East Mission), and Elders Emil Fetzer and Allan Acomb of the Church Building Committee, on the property and it was the unanimous opinion of all that we should not proceed with the high rise building and that we should use only part of the land and build a building of minimum size to take care of the chapel and cultural hall as well as missionary quarters and there would be some vacant space and we could not determine at this point what we would do with it because we had to make the minimum expenditure as demanded by the Crown Government of approximately $275,000. Elder Garff stated that he thought because of the location of the land and its distance from any of the members that it was not a good investment but we would have to move forward or forfeit the money we had already put in the land which approximates $400,000. This piece of property is on the Kowloon side of the bay and not in Hong Kong.
Elder Monson made inquiry as to the legal difficulty we are having in the orient and Elder Garff stated that he could not pinpoint these difficulties but he was sure they would be worked upon.
We all then moved to President McKay’s living room where Elder Garff presented to all present a detailed chart showing the growth of the Church from its inception until the present time and what monies have been spent and what our problems would be in the next ten years. Elder Garff stated to President McKay that when the President asked him to take over the Building Department he was like a man trying to make his way through a forest without an ax to chop his way and it took approximately 60 days for him to understand the program of the previous Building Committee and to trace where the money had been spent and in many cases no one could give an accurate accounting of the money expended. The problem has now been resolved and all expenditures are channeled through the Financial Department to Elder George Jarvis and the Building Department does not sign checks or make expenditures on its own. Elder Garff further stated that in many instances chapels and buildings which have been constructed throughout the world are far too large for the needs of the people and that the local members in many instances can only contribute labor. Many of the buildings have been oversized, especially in Europe and South America, that in the past we tried to be all things to all the people; also, if the program had continued in that the locals were not participating in their share of money, we would soon find ourselves in extreme difficulties financially, that one of the major problems of the Building Department was to now size the buildings to fit the needs of the people also to find a way for the local Saints to pay their portion of the costs of the building.
Elder Garff traced the expenditures of the Church through the Building Department from the years 1918 to 1945 while President Heber J. Grant was President, wherein he spent $9,439,000 in 15 years; that President George Albert Smith, from the years 1946 to 1951, had expended $25,225,000, that President David O. McKay, from the years 1952 to 1965, has spent $200,094,000, making a grand total of $234,758,000 which has been spent on chapels since 1918 up to and including 1965.
President McKay asked the question what percentage the local paid on maintenance of Ward and Stake buildings and Elder Garff said it was expected that the local people would pay 40% and the Church pay 60%, but there were exceptions to this in Missions where the ratio was 75/25. In making the presentation, Elder Garff stated we had developed an expandable plan wherein we could expand the facilities of Wars by adding to the original portion of the building and where possible we had discontinued building large buildings beyond the needs of the people. In most cases there are two and sometimes three Wards meeting in one building. Elder Monson stated this was being watched very carefully to see that more than one Ward uses the new buildings, which greatly reduces the expenditures of the people by bringing about their maximum with a minimum cost to the members and the Church itself. Elder Garff further showed from his prepared chart that from 1963 to 1965 the expenditures for building projects in Wards, Stakes and Missions totaled $118,000,000; of this amount 27.5% had been spent in the last three year period in the geographical regions outside the United States and membership in these areas only accounted for 10.7% of the total Church membership. Elder Monson explained to President McKay that Elder Garff, as Chairman of the Church Building Committee, had curbed the buildings in areas outside the United States; the buildings had been reduced in size so that the people could pay a share of the building and be able to maintain the same. However, there had to be a forgiveness plan used, especially in foreign areas, to encourage the local to pay something on these buildings so they could be dedicated. One of the realistic problems was the buildings, which in many cases were oversized and went far beyond the ability of the local people to make a contribution in keeping with the size of the building; in some cases the locals did not have enough money to maintain the building. Elder Garff mentioned to the President that if the Asiatic people were ever to accept the gospel in numbers, because of the density of their population there would be an imbalance and we would be dominated by preponderance of Asiatic people. Elder Dyer mentioned at this point that the revelations which came to the Prophet Joseph Smith were to the effect that people would gather from all nations to Zion here in America, that this was the place where the Saints should be gathered. At this point Elder Monson stated the fruitful field for activity of missionaries was here in the United States, that the most fruitful field we have is up and down the West Coast in the Continental United States, that in these areas the people could make far greater financial contributions to the Church than those in foreign areas. Elder Garff stated the fact of the matter was that the only place in the world we had any financial strength and great spiritual strength was in the Continental United States, also we could not continue to pour approximately 30% of our budgeted money for chapels in foreign areas where we have only 10% of the Church population because this had put us in a position where we now are lagging by 300 buildings in the United States. This trend was now being revised that more money was being spent in the United States. Elder Garff further stated that the projects, additions and remodelings which are taking place at present in the United States and Canada are 380 under development, 149 in the architectural phase and 100 in the construction phase; that in foreign and Indian areas there are 46 projects under development, 47 in the architectural phase and 54 in the construction phase, making a grant total of 776 buildings.
Looking ahead as to what our future needs and expenditures will be, it is our estimate that the Church will need to build approximately 837 Church units (including the 1965 backlog of 300 projects), new meetinghouses at a total cost of nearly $209,250,000 during the next three year period. Projecting our total cumulative needs through five years, we will need to construct 1,245 meetinghouses at a total cost of $311,000,000; and for the next ten year period a total of 2,213 meetinghouses will be required at a cost of approximately $543,250,000. The Church’s share of this amount, about 65%, represents considerably more than the Church expended ($234,758,000) during the last 35 year period of time covering the Presidencies of Heber J. Grant, George Albert Smith and David O. McKay.
Elder Garff reminded President McKay that when he asked him to take over the Chairmanship of the Building Committee there were two requests President McKay made of him; one was to charge the idea of us being a rich and extravagant Church and at the same time provide sufficient worshipping facilities for the membership of the Church, and to save the Church money. Elder Garff’s report was given to the President showing that from July 1, 1965 to December 31, 1966 there had been a decrease of $2,762,000 (which is 69%) of what was apportioned in the total working funds for the Building Department; this was a considerable savings. Total loans outstanding for meetinghouses and seminaries were decreased $3,686,000 (which is 48%); and meetinghouse and seminary projects which had been completed but not paid for had been reduced $6,865,266 (which is 90%) and there was a deficit on buildings under construction in the amount of $22,000,000 when he took over as Chairman of the Building Committee and he had to get appropriations from the general funds of the Church to take care of these deficits; personnel in the Building Department were decreased by 256, which is 49%; Ward meetinghouses which we, the new Committee, were responsible for, had saved approximately $50,000 on every building we had built compared with the costs of comparable buildings which were built under the supervisory plan; we had saved approximately between $70,000 and $80,000 on every Stakehouse we had built under our new program as compared with the old method; this should amount to a savings of approximately $9,000,000. On the 1966 budget we returned $20,000,000 to the general funds of the Church; $16,250,000 representing budgeted money for chapels and the remainder for special projects was saved and when there are all totaled they amount to approximately $32,000,000 that the Building Committee has returned since Elder Garff became Chairman of the Building Committee. Through this savings there should be probably enough to construct the general Church office building whenever President McKay wishes to go forward with it. At this point Elder Monson made the statement that Elder Garff and his co-workers have done a wonderful job and that this can definitely be seen by the program and changes which have taken place in the procedures in the Building Department and he definitely felt the Lord had blessed Elder Garff and was restoring to him his health, which seemed to Elder Monson was a great blessing to Elder Garff; that Elder Garff had gone about his work quietly and at no time belittled or spoken despairingly about his predecessors; that Elder Garff had gotten the job on its way. President McKay asked where Brother Wendell Mendenhall is now (Brother Mendenhall was formerly the Chairman of the Building Committee) and Elder Monson replied that he was involved in his own personal interests in cattle and ranching operations. Elder Garff stated to the President that he had not openly spoken out against any of the former Building Committee, that he had selected his own Committee and they are willing to work early and late with him if necessary and each understood they would have to go beyond their ordinary selves in the work that had to be accomplished, otherwise he did not want them as a member of his team. Elder Garff expressed to the President the hope that he, President McKay, was satisfied and happy with what the Building Department had accomplished and was now in the process of accomplishing and he explained that he was trying to take care of the building needs of the people; that the buildings we are building are not luxurious but are designed in size to meet the needs of the people and are functional in all aspects and come within the range of the people’s ability to pay for their share of the structures.
Elder Garff explained and discussed with the group the maintenance costs needed for the different Temples; he explained that the Salt Lake Temple Annex is now completed and as far as the Building Department is concerned, it is ready for dedication. There we had expended approximately $6,500,000 on the Annex and remodeling of the Temple, which costs were exorbitant and completely out of line with what the costs should have been. Elder Garff also mentioned to the President that it might be considered feasible to build some smaller Temples and not go to the expense of enlarging the now existing Temples, that because of the students at the Brigham Young University and their travel to the Manti Temple in great numbers, he might consider a small Temple in Provo and one in Ogden as we already have the land provided for such buildings; also there is a critical need for a Temple on the East Coast of the United States. Elder Dyer at this point interjected the thought there should be no Temples built anywhere except those designated by revelation to the President of the Church and Elder Garff answered that his suggestion was based on what his own personal observations and thinking are and he thought it well to mention this matter to the President.
At this juncture President McKay expressed his gratitude and pleasure with the entire report and advised Elder Garff to continue the policies he was following, also again reiterating to Elder Garff that directions concerning his work would come direct from the President, that he was to deal directly in all his affairs with the President. At this time Elder Garff told the President that he had dedicated himself to the work that the President had asked him to do. Elder Garff stated he had tried to conform his life in every respect in accordance with the President’s teachings and he had served him with a full heart and with all his strength and he considered his affiliation with the President very personal and from the beginning he had agreed to work for him and him alone. As Elder Garff parted, President McKay, with tears in his eyes and clasping Elder Garff’s hands, said to Elder Garff, ‘That agreement still stands. You are working for me and you take your orders from me and no one else.’
President McKay seemed very happy and pleased with the entire report and said he had been greatly enlightened regarding the problems of the Building Department and he would support Elder Garff in all his endeavors and would help in any way possible. This last conversation Elder Garff had privately with President McKay. Elder Garff’s secretary (Willo DePew), Elder Thomas Monson and Elder Alvin Dyer, had left the room and he was alone with the President excepting for Sister Clare Middlemiss who was standing by Elder Garff as these remarks were passed between the President and Elder Garff. Before Elder Monson and Elder Dyer left the room they expressed great gratitude of being invited to hear the report and commended the work that has been done and, along with President McKay, encouraged Elder Garff to continue diligently in his work.
Approved: David O. McKay”
Thur., 12 Oct., 1967:
“Held a meeting with Presidents Hugh B. Brown, Nathan Eldon Tanner, Joseph Fielding Smith, and Elder Alvin R. Dyer, newly-sustained Apostle. This was Elder Dyer’s first meeting with the First Presidency, and he had come at my invitation. A number of matters were presented by the Brethren, among them were:
Tithing Receipts
We reviewed a report of tithing receipts for the first eight months of this year, showing a perceptible increase over the same period a year ago. It mentions, however, heavy operating and project expenditures which make the net less than a year ago. The over-all picture, however, is very encouraging.
Tues., 12 Dec., 1967:
“8:30 a.m.
Held a meeting with the Counselors. Some of the matters discussed were:
Beneficial Life Insurence Company – Church Not Interested in Selling President Tanner referred to a letter received by him from two Bishops — Joseph Gasser, and one other whom he said he was not sure whether he is a bishop or not. I said, “Well, doesn’t he state whether he is a Bishop or not?” And President Tanner then said, “Yes, I am sure he is a Bishop.”
He said that their letter conveyed the information that they had a buyer for the Beneficial Life Insurance Company. I said that the Beneficial Life Insurance Company is definitely not for sale; that this matter had been brought up before and decided that we would not dispose of this company.
Fri., 8 Mar., 1968:
“8:30 a.m.
First Presidency’s Meeting. (See Minutes of First Presidency Meeting by Elder Alvin R. Dyer)
(Sale of the Cochran Ranch in Canada)
The sale of the Cochran Ranch in Canada owned by the Church was approved by President McKay. It contains 30, 000 acres and cost the Church $200 per acre. It will be sold for $60.00 or $65.00 per acre. The cattle on it will be sold for $500,000, and the machinery for $100,000, so that all in all the Church will receive about 2 1/2 million dollars from the deal.
Tues., 16 Apr., 1968:
“8:30 a.m.
Met with Presidents Brown, Tanner, Smith, and Dyer in a meeting of the First Presidency in my office in the Hotel Utah Apartment.
Among official items discussed were the following:
Tithing Report — Substantial Increase
It was reported that the Presiding Bishop had presented at the meeting of the Presiding Bishopric last Friday that the tithing for March and the fiscal year to date shows a substantial increase over the same period for the previous year. In the Stakes the tithing per capita is up 4%.
Tues., 18 Jun., 1968:
“Held a meeting with my Counselors this morning at 8:45. Present were Presidents Tanner, Smith and Dyer. President Brown is at home indisposed, and President Isaacson still is confined to his home because of a stroke.
The following matters were given attention this morning:
Tithing Report: President Tanner reported that at the meeting of the First Presidency and Presiding Bishopric there was presented the tithing report for the current fiscal year including May showing a better than 10% increase over the same period a year ago.
Wed., 19 Jun., 1968:
“8:45 a. m.
Held a meeting with my Counselors in the office at the apartment in the Hotel Utah. Presidents Tanner, Smith and Dyer were present. President Brown is at home, indisposed, and President Isaacson is absent on account of illness.
Some of the matters considered were:
Church — Financial Picture Of:
President Tanner reported on the finances of the Church, indicating the solid condition in which the Church now rests in its financial position as of May 31, 1968. During the past several years the Church has placed in certificates of deposit and in other investments its surplus funds. Interest received on money invested in 1963 was $3,800,000, but for the first nine months of September 1967 up to and including May 31, interest on investments amounted to $7,500,000. The increase is due to the increase in interest rates, and also due to the fact that much more surplus funds the Church has at present than heretofore. The Church is trying to accumulate in its surplus account sufficient money to carry us a few months no matter what might happen. In addition to funds in this country, we have money in various countries which totals 3.8 million dollars of which 2.6 million could be taken out of the various countries. This is in addition to Canada, which has some 28 million dollars of Church assets which includes 20 million which could be taken out of that country also. The tithing income for the first five months of 1968 shows an increase of 11.3% over the same period a year ago.
I was pleased to hear of the substantial condition of our finances.
Tues., 16 Jul., 1968:
“Held a meeting of the First Presidency shortly after 9 o’clock this morning.
Some of the items discussed:
Tithing Report
The tithing report was submitted as given by the Presiding Bishopric, showing an increase of tithing paid for the fiscal year to the end of June of 10.5 percent over the same period a year ago. This is double the percentage increase in membership.
Thur., 15 Aug., 1968:
“9:00 a.m.
Held a meeting with Presidents Brown, Tanner and Smith. Some of the matters discussed were:
Church — Financial Growth of
Our attention was called to the financial statement for the first eleven months of the fiscal year ending July 31, 1968, presenting a tremendous increase in tithing for the month of July and for the year as a whole. The tithing receipts far exceed those of 1967.”
Tues., 20 Aug., 1968:
“9:00 a.m.
Held a First Presidency’s meeting with Presidents Brown, Tanner, Smith and Dyer.
Church — Disposition of Tithes
The brethren reported that yesterday afternoon at 2:00 the annual meeting of the Committee on the Disposition of Tithes was held in the First Presidency’s Board Room. Those present all felt that the Budget Committee had done a very good job and the budget was passed by unanimous vote. President Tanner reported the estimated income for the year 1968-69 and the amount that it is proposed to spend for the different departments of the Church. He indicated that after taking into account the amount put aside for contingencies and the budget expenses, there would be a surplus of about forty-nine million dollars.
Church — New Office High Rise Building
Because of the surplus over the budget, the Budget Committee approved the proposal to go forward with the new office building, the plans and specifications for which will be completed by September, at which time they will be put out for bids and the steel will be ordered. He said it is felt that we may be able to build this building in three years, whereas it was formerly thought it would take four; in which event the building will be completed by 1971. A question was raised by Brother Lee in regard to the height of the building. He did not think that our building should be higher than any other building here. The proposed building would be 29 stories high, including three stories on the top for storage, maintenance, etc., which would be five stories higher than the University Club Building. He said the foundations are built to carry the building even higher than that. This would make it possible to bring all our offices except the Relief Society, which is in its own building, and the Distribution Center which is using the old Deseret News Building on Richards Street into this one building. The computer work would be in the basement of the Utah Hotel Motor Lodge. President Tanner said that it was his feeling in regard to the height of the building that if we did not have the Kennecott Building or the University Club Building it might be wise to reduce the height of our building, but that the increase in height will not be offensive aesthetically. He said he believed that it was the general sentiment of the brethren that we should go forward with the building as planned.
President Tanner mentioned that the building will have two wings, four stories high each, which will make the high rise building appear lower than otherwise. The building he said will certainly be serviceable and functional. Two years have been spent working with the architects and members of the committee, and it is thought that we should go forward with the building as planned.
President Dyer mentioned that there has been a feeling among some people in the city that it would be better to have a number of smaller buildings to house the Church offices at different locations. He commented that when we build a high rise building like this, the higher the stories the less the cost per square foot would be. President Dyer said that he had seen the picture of this proposed building and the plaza section, which will be called the mall, between the new building and the Church Office Building, and that there will be a clear view of the Temple from First Avenue, and in between the buildings will be a beautiful garden plaza. He felt to sustain the proposal that we go forward with the building along the lines specified. He mentioned that this would take care of our office requirements for the next ten years. President Tanner commented that the building will be 70-75% occupied as soon as built, and the floors not needed at this time will not be completed but will be shells until they are needed.
President Tanner asked me if we should go forward with the building and I indicated my approval of this project.
Mon., 21 Oct., 1968:
“8:45 a. m. Meeting of the First Presidency in the hotel apartment. President Brown absent due to illness.
Embezzlement of Church Funds
President Tanner gave a brief report on the embezzlement of Church funds perpetrated by LaMar Edward Kay of the Church Financial Department and Seldon Clarence Darrow, the total amount in excess of $600,000. Since the finances come under President Tanner’s jurisdiction in the Presidency, he stated that a complete and thorough investigation was under way into the Department to ascertain the weaknesses that would permit such a thing to happen. President Dyer made the comment that each and every individual connected with conditions that made it possible for Kay to propel the false requisitions through the Department should be checked since he had learned that a supplementary signature had to be obtained upon the requisitions in addition to that of Kay’s signature.
President Dyer inquired if we had ever insisted on bonding our employees that handle money. President Tanner said that a few years ago it was decided not to bond them, that we have hundreds of bishops and stake presidents and so many departments where money is spent and it was decided that with the proper administration we should not bond them because the cost would be too exorbitant. President Dyer suggested that the Church as a Church is also a big business institution and that we are attempting to employ experts in the various departments like our Advance Planning and to secure personnel directors who are equal to those that are found in industry and business generally; that the same is no doubt true in the Financial Department. These are men who could command high salaries anywhere in the world, so our level of personnel is high, and it seemed to him that where this condition exists there are certain restrictions placed on these men and he thought we should seriously consider the advisability of bonding them. It would be a protection to the Church.
President Tanner said that Brother Edling, Brother Jarvis, Brother Blodgett, and also Harold Davis, the auditor, would meet with him on Thursday at 7:30 a. m., at which time they will have Brother Kirton with them and go into every phase of this situation. This case is also in the hands of the FBI and the police force. In the meantime, Brother Kirton is acting to recover all that can be recovered as a result of the financial exploits of Kay and Darrow in purchases of automobiles, rifles, boats, and other materials which had been given to people either as gifts answering blackmail charges or as outright prestige gifts.
(See Newspaper Clippings following)
Thur., 24 Oct., 1968:
“8:40 a. m. Meeting of the First Presidency in the hotel apartment. Present were: Presidents N. Eldon Tanner and Alvin R. Dyer. President Hugh B. Brown indisposed and President Joseph Fielding Smith meeting with the Twelve.
The following matters were taken up:
Embezzlement of Church Funds
President Tanner reported that this morning at 7:30 he had met with
Brother Wilford Edling, Wilford W. Kirton, Harold Davis, George Y. Jarvis and Alan Blodgett in regard to the embezzlement of Church funds, and had asked Brother Edling to make a careful and thorough investigation of the entire Finance Department — the methods and procedures and the people who work there to see how this embezzlement could have happened — and to make recommendations as to how we can improve conditions and make certain that such a thing does not happen again. President Tanner said that Brother Edling said two interesting things; one was that you cannot make a foolproof system where no one can beat it, but you should make it as foolproof as you can. In regard to the employment of individuals in key positions of this kind President Tanner said this matter will be handled by the Personnel Department. President Tanner said that Brother Jarvis, when he employed this man Kay, consulted three of his previous employers and got clearance from them and also talked with his bishop about him. The bishop knew nothing against the man but said he was not very active. In discussing this matter it was agreed that in the future in obtaining clearance for an employee in a position of this kind we could check with the police department who would check with the FBI.
In regard to any possible recovery, President Tanner said that the police investigators are checking on every lead they can get. He stated that we have learned that the money, among other things, was used for purchasing a boat, perhaps two boats; two racing cars, and that presents in the nature of cars and other things were given to different people. It is also understood that Kay had purchased a four-plex apartment house which he turned over to someone else, and also a new home for someone. President Tanner said that in regard to making an audit of the situation he felt it was wise that we should not leave this to our own auditor but bring in Brother Edling, who is competent to do a very fine job.
(See newspaper clippings which follow)
Wed., 30 Oct., 1968:
“8:45 a. m. Meeting of the First Presidency held in the hotel apartment. Present were: Presidents Hugh B. Brown, N. Eldon Tanner, Joseph Fielding Smith and Alvin R. Dyer.
The following were among the matters discussed:
Church Financial Report
The preliminary Church financial report for the 1967-68 fiscal year was reported. The brethren were very much pleased with the report which indicates a remarkable increase. The Church finances are in very fine condition.
Fri., 22 Nov., 1968:
“At 9 a. m. met with my counselors Presidents Hugh B. Brown, N. Eldon Tanner, Joseph Fielding Smith, and Alvin R. Dyer.
Among matters discussed were:
Tithing Report – Constant Percentage Increase
It was reported that a tithing report in comparison from 1959 to 1966 indicates a constant percentage increase. In 1959 there was a 4.2% increase in membership over the previous year and an 8.9% increase in tithing; in 1962 a 7.8% increase in membership and 10.8% increase in tithing; in 1966 a 5.3% increase in membership and a 10. 5% increase in tithing. The report also indicated a tithing report for the months of September and October 1968 indicating an overall increase of 13.2% increase in September 1968 over September 1967, and an increase of 17.8% in October 1968 as compared to October 1967.
This is a remarkable evidence of the faith and devotion of a great many members of the Church.”
Mon., 13 Jan., 1969:
“Minutes of the Meeting of the First Presidency
Held Monday, January 13, 1969, at 9:30 A.M., in President McKay’s Apartment
Financial Report as of November 30
President Tanner reported the Church income from all sources during the three months, September, October and November, and the expenditures, showing that the expenditures were more than $6,000,000 less than the income. He said that the cash and assets held in lieu of cash belonging to the Corporation of the President rose to an all time high, and that the amount collected as tithing for November was the greatest in any one month to date excepting January, and that we have $3,700,000 net surplus of funds over and above our commitments, that these surplus funds have been invested in securities and bank certificates of deposit.
J. C. Penney Building
President Tanner reported, and he said this is confidential, that Roy Simmons of Zions First National Bank had conferred with him about a financial matter. He said that the bank expects to erect a building in the city for J. C. Penney Company for their accounting offices, which would employ about 1,000 people here. It would be an $8,000,000 building. The bank would put up $2,000,000 of their own money and they would like to know if we would be interested in investing from one to six million dollars at 7% in the project for a period of 20 years, if we wish to go that long, and the bank will guarantee it. President Tanner said this seemed to be a very good investment but he felt that if we decided to accept it there should be some arrangement whereby we would participate in the profits or in rental or lease benefits. He said the project has not been entirely agreed upon but has been approved by the executive committee. President Tanner thought that perhaps we might take half the balance, that if they put up $2,000,000 we would put up two or three million, and someone else would put up three million more. The brethren looked favorably upon this proposal. President Tanner will confer with them further in regard to the other profit arrangement he mentioned.
Wed., 5 Feb., 1969:
“9:00 a. m. Meeting of the Eirst Presidency. Present in the President’s hotel apartment were Presidents Hugh B. Brown, N. Eldon Tanner, Joseph Fielding Smith and Alvin R. Dyer.
The following matters were discussed:
Church Department of Finance Reorganization
President Tanner reported in connection with the recent embezzlement of a large sum of money from the Church Financial Department that a careful investigation of the Financial Department had been made by Peat, Marwick and Mitchell, who will make a report in the near future. President Tanner said the conditions were such that it will be necessary to appoint a new comptroller for that department succeeding Brother Jarvis, that it will therefore be necessary to ask Brother Jarvis for his resignation. President Tanner said that this does not mean that Brother Jarvis was in any way involved in the embezzlement but that there is a weakness in the administration of that department making this embezzlement possible, and there are things that need changing and the need for a stronger administration. President Tanner said that he proposed as Brother Jarvis’ successor, vice chairman Alan Blodgett, and to give him as an assistant a very fine man who is now with the Advance Planning Department. President Tanner said it was his feeling that we should then have a complete study made of the department beyond what the auditors have done, that it might be considered advisable to make separate departments of the three divisions or to consolidate them into one department with managers of the various divisions. It was agreed that President Tanner should handle this situation in the wisest and kindest way possible so as not to cause any reflection upon Brother Jarvis, that, however, he should be asked for his resignation.”
Thur., 6 Mar, 1969:
“9:00 a.m. Meeting of the First Presidency in the President’s Hotel Apartment. Present were Presidents Hugh B. Brown, N. Eldon Tanner and Alvin R. Dyer. President Joseph Fielding Smith meeting with the Twelve.
Among the matters discussed were the following:
Financial Report
President Tanner referred to the solid financial conditions of the Church due to its cash and other assets, and reported the progress from 1964 up to the present which had increased more than ten times from 1964 until l968. I was very pleased to hear this report.”
Tues., 6 May, 1969:
“(Minutes of Meeting of President Alvin R. Dyer with President McKay.)
There was no meeting of the First Presidency held today.
(Meeting with President McKay in his Apartment – 9:30 a.m.)
The President was relaxing in his study when I arrived. He was taking no oxygen and stated that he was very glad to see me. I discussed the following matters with him:
4. We discussed the matter that the Church each year seems to be living up to its tithing budget whereas there should be some concern for reserve. It was plain that President McKay was deeply concerned about this.
Thur., 26 Jun, 1969:
“9:00 a. m. Meeting of the First Presidency in the President’s Hotel Apartment. Present were Presidents N. Eldon Tanner and Alvin R. Dyer.
Among the matters discussed were the following:
Financial Report
President Tanner summarized the financial report of the Church for the month of May and for the first nine months of the fiscal year showing a surplus for the month of 5 1/2 million, and for the year 29 1/2 million–an unexpected increase.
Financial Advisor — Need for
President Tanner said that he felt that we had reached a point where we badly need a financial advisor, that he did not feel that he should take the full responsibility. He mentioned that I had asked him to do this a year ago and that he had been doing it by consulting with Merrill Lynch, Pierce, Fenner and Smith, Inc. and other investment houses that can give advice, but if agreeable to me he would like authority to set up a committee and also secure the services of some firm like the First National City Bank of New York which can give us the service that we need, and he thought that we should have them come here and help us analyze our situation and either give us this service or advise us as to how this service might be obtained. President Tanner said that he would also like to talk to William F. Edwards about the matter. I indicated my approval. President Tanner reported that Alan Blodgett, who has taken over the management of the Financial Department, is doing a splendid job.”
Thur., 14 Aug., 1969:
Minutes of the Meeting of the First Presidecay
Held Thursday, August 14, 1969, at 9:30 A.M., in President McKay’s Apartment
Present: Presidents David 0. McKay, N. Eldon Tanner and Joseph Fielding Smith .
President McKay seemed to be feeling better this morning. President Tanner reported that President Brown was in Alaska and President Dyer was not in his office, and Joseph Anderson was on his vacation. In their absence President Tanner and President Smith met with President McKay.
Church Financial Report
President Tanner discussed with President McKay the financial report for the month of July, 1969, and pointed out that the receipts for July were greater than the disbursements.
Fri., Sept. 5, 1969:
“Minutes of the Meeting of the First Presidency
Held Friday, September 5, 1969, at 9:20 A.M., in the First Presidency’s Office
Present: Presidents N. Eldon Tanner, Joseph Fielding Smith and Alvin R. Dyer
Investment Program of the Church
President Tanner mentioned a recommendation that he had made some time ago to the First Presidency which was approved that we set up an advisory board or committee to advise us regarding the investment program of the Church and the handling of funds. President Tanner said that he would be prepared in a day or two to submit names of brethren whom he could recommend for membership on this committee. He mentioned that at the time he raised the question it was thought that it might be advisable for us to bring in the Brigham Young University and their investments, also the Beneficial Life and their investments. He felt that Howard Hunter, who is chairman of the board of the Beneficial Life, might be chairman of this proposed advisory committee with William F. Edwards, Glenn Nielsen, Alan Blodgett and Brother Kenneth Handley, who is with Goodbody and Company, as members. President Tanner said that in discussing this matter it has been suggested that it might be well not to limit it to one firm in New York but two or maybe three, and have them invest part of our money.
Tues., Sept. 16, 1969:
“9:15 a.m. Meeting of the First Presidency held in the President’s Hotel Apartment. Present were Presidents Hugh B. Brown, N. Eldon Tanner, Joseph Fielding Smith and Alvin R. Dyer. . . .
Church Investment Policy – New Committee Formed Re: Investments
President Tanner referred to a matter that had been brought before the First Presidency on former occasions, namely, recommendation that we have a committee on our investment policy to direct our investments with whom we could work closely, which idea had been approved by the First Presidency. President Tanner now recommended the following to serve as the committee: Howard W. Hunter, chairman of the Executive Committee Beneficial Life and Utah Home Fire; Glenn Nielsen, who is on the development fund committee for the BYU; William F. Edwards; Kenneth H. Handley of Goodbody and Company; Alan Blodgett, head of our Financial Department.
I indicated my approval.”
Wed., Sept. 24, 1969:
9:20 a.m. Meeting of the First Presidency in the President’s Hotel Apartment. Present were Presidents Hugh B. Brown and N. Eldon Tanner.
The following matters were discussed:
Financial Report–Preliminary
President Tanner called attention to the preliminary financial report of the Church for the fiscal year ending August 31st. He said this is not final and there will probably be some minor changes but in spite of that fact we have a considerable surplus of money.