Book Review: The Mormon Hierarchy: Wealth and Corporate Power

D. Michael Quinn, The Mormon Hierarchy: Wealth and Corporate Power (Salt Lake City: Signature Books, 2017).

When I heard that the third volume of Quinn’s Mormon Hierarchy trilogy would deal with the Mormon church and money, I was totally excited. I love exploring how religions deal with money (and, for that matter, how money deals with religions). And I figured that Quinn would have encyclopedic knowledge of Mormonism and money; he has, after all, written about it in the past. And when I saw that the Kindle version was selling for just $9, what could I do? So I downloaded it and read it.

First the good: Quinn has assembled an impressive amount of information related to the LDS church and money. Nearly 200 years’ worth. Some of his history I was familiar with; a good portion (especially dealing with early-20th-century Utah) I wasn’t. For instance, he has a fascinating snippet of discussion about the church and property tax exemption (both in Utah and throughout the world).[fn1] It’s too brief, and seems at some points to conflate property and income tax exemptions, but I’m entirely sure I’ll return to this part of the book in future projects that I look at.

Unfortunately, his treatment of tax illustrates, in a nutshell, the book’s most significant flaw: while Quinn seems to care intensely about the details of Mormonism, he seems much less interested in the details of finance and money. In the middle of his discussion of the church facing property taxes during the first half of the 20th century, Quinn writes,

In time, the church obtained property-tax exemptions in Utah and for much of its real estate throughout the United States, paying only a tax on profits from its commercial subsidiaries.[fn1.5]

I can’t tell exactly what’s going on here. On my first reading, it struck me as indicating that Quinn didn’t know (or care about) the difference between property tax exemption and income tax exemption. Alternatively, it may be an attempt to transition from one to the other—he goes on to talk about how the church paid taxes on its business income and on real estate holdings it used for business. But at best, this is sloppy—obtaining property tax exemptions has nothing to do with paying income tax on its for-profit subsidiaries’ income (and, for that matter, it would have been the subsidiaries, not the church, paying taxes).

Now of course the tax stuff grabbed my eyes. But it’s not the most egregious example of the careless treatment of finances in the book. I don’t want to comprehensively lay out my problems with the book, but three examples should give a sense of the book’s weaknesses when it comes to money:

Financial Instruments

Quinn writes that under President Grant, the church engaged in risky investments that sometimes led to significant financial losses. J. Reuben Clark did his best to rein in these investments, instead putting the church’s money in “low-interest-paying banks owned by the church.” Soon thereafter, Clark was replaced as the overseer of church finances by Stephen L. Richards. Richards shifted to purchasing “commercial and financial company paper”; Quinn lists the names of the companies whose paper the church invested in, including such non-Utah, non-Mormon names as Sears, Westinghouse Credit, and General Electric Credit.

And then he writes,

Totaling $3,775,000 in 1960 and equal to $27.8 million in 2010, this was only January’s proposed purchases of stock in non-Mormon enterprises. The church’s portfolio was obviously much higher.[fn2]

Now, there’s a huge problem there: commercial paper is not stock. Commercial paper is a type of short-term debt instrument issued by companies. And by short-term, I mean really short-term, with maturities as short as one day, and that rarely extend beyond about nine months (but generally significantly shorter than that). Though commercial paper is unsecured, because of its short maturity, it’s generally fairly secure, and it pays a low interest rate. I mean, it pays slightly more than Treasuries, but just barely.

Importantly, though, commercial paper is nothing like stock. It doesn’t represent ownership in a company, it provides a steady (and stated) return.

Does it matter that Quinn’s unaware of this? Yes it does, because it means he doesn’t ask the right questions. That the church shifted from low-interest investments in Utah banks (which, by the way, does that mean deposits? bonds? something else?) to low-interest short-term commercial paper probably tells us something. Why leave Utah banks? Were they becoming riskier? Did the church want to diversify? Did it want to participate more fully in the broader US economy?

But if you believe that the church was investing in stock, those questions go away, and are replaced by the wrong questions.

And no, I don’t expect most people to know what commercial paper is. But if you’re writing a book on finance and you come across an unfamiliar term, it’s probably worth double-checking what it means. At the very least, you can Google it, which provides an accurate and an accurate Investopedia hit, both of which make clear that commercial paper is not stock. And from there, you can figure what questions you should be asking about commercial paper.

Consumer Price Index

Toward the beginning, Quinn explains that, because of the amount of time his book covers, “this volume often states what the equivalent of US dollars in the nineteenth century would be in terms of purchasing power in 2010.”[fn3] And boy-howdy does it. At the beginning of the first chapter, he tells us that the $3,000 Martin Harris used to secure the printing of the book of Mormon was the equivalent of more than $72,000 in 2010.[fn4] Basically every time a dollar amount comes up, he gives a 2010 equivalent amount, and almost every time, he drops a note to the website

Basically, the website provides a CPI calculator: stick in a dollar amount, a starting year, and a destination year, and it will tell you what the dollar was worth. It uses a modified version of the consumer price index (CPI).[fn5] So why didn’t Quinn cite to the Bureau of Labor Statistics CPI calculator? My guess is because official CPI only goes back to 1913; others have extended it prior to then, using their own data and assumptions.

And there’s nothing wrong with using CPI in some cases; it gives a nice rule-of-thumb comparable. But CPI is complicated. In fact, there are different CPIs that apply to different regions, to urban, and to rural areas. And CPI is a measure of consumer expenditures (including food, housing, and transportation)—the institutional church’s expenses would be different from an individual consumer’s. Which makes this problematic:

But when Woodruff died, the church had $2,168,012.20 of total indebtedness. Thus, Snow’s 1899 discovery (calculated by Clawson) was that the difference of $2,068,961.46 came from business losses. By comparison, this would be more than $56 million in 2010 dollars.[fn5]

The problem is, using a basket of goods that households consume to calculate the current value of institutional debt isn’t necessarily accurate. And you don’t have to understand a lot about CPI to know that—even on the results page of the calculator warns that the $56 million amount isn’t necessarily right. Here’s what you see:

Notice that the CPI calculator suggests numbers ranging from $47 million to almost $1.6 billion. But none of those calculations of contemporary worth are entirely consonant with a church’s non-consumer debt. Still, that wide range should have made Quinn think twice about whether CPI was the right way to go.

Moreover, even if CPI were the right way to figure out the current dollar value of the 1899 debt, I’m not sure why the current value of the debt matters. It would have been more valuable to put the debt into some kind of context. A $2 million debt would be mostly irrelevant if the church had assets worth $100 million. On the other hand, it would be potentially devastating if the church had assets worth $2.5 million. But the book is content to give us a CPI-adjusted number, and not dig into the value of that number.

And maybe Quinn had reasons for using CPI. But he never explained those reason; he never offered a theoretical defense of using CPI consistently throughout the book. As such, I’m skeptical that he had any compelling reason, other than convenience. And the practical reason he offers is, well, not so compelling:

For example, even trained historians might currently think that an annual income of $10,000 was modest for the year 1899, when it was actually equivalent to $271,000 in 2010. Rather than my own estimate of comparative worth, the financial equivalents are derived from the Consumer Price Index on the internet.[fn6]

Honestly, I’d be shocked if any historian thought $10,000 in 1899 was a modest annual income. But this explanation suggests that Quinn’s lack of financial sophistication, and the siren call of easy internet calculators, led him to believe that giving the modern value of old dollar amounts was both necessary and sufficient. And I feel like the seduction of the CPI calculator kept him from carefully evaluating the relevance and importance of dollar amounts, replacing them with a facile comparison.

Tithing Revenue

Quinn calculates that in 2010, the church collected about $33.7 billion in tithing revenue.[fn7] Given that the church is notoriously opaque when it comes to finances, how did he arrive at that number?

Well, he has data from 1950-1960. During that decade, tithing was growing at a “mean average” [sic] of 12.9 percent annually.[fn8] So he estimated that tithing revenues continued to grow at a 12.9 percent rate year after year.

The problems with that approach are legion. First, it’s hard to point at the 1950s as a good baseline year. The post-WWII years were an economic boom time in the US, with huge GDP growth and enormous economic expansion. Then we had recession and stagflation in the 1970s, we had a recession in the 1990s, and the 2000s have hit us with a couple recessions, too. So a consistent growth of 12.9 percent, based on a golden decade, strikes me as unlikely.

Also, the growth center of the church shifted. In 1960, 90 percent of church members lived in the (relatively affluent) United States. Another 4-5 percent lived in Europe. At the same time, only 2 percent of church members lived in South or Central America.

By way of contrast, today, of the 15.9 million church members worldwide, only about 42 percent live in the United States. Nine percent live in Mexico, 25 percent in South America, and 3 percent in Africa. Church growth since 1960 has been disproportionately strong in developing economies, so I suspect that, even if the 1950s hadn’t been a poor baseline economically, it would still be a bad population demographic baseline.

Of course, Quinn didn’t have current data (or any data from the last half century), so wasn’t this extrapolation the best he could do?

No. He could equally well have told us that the 1950s had an average (or mean, or whatever he actually means there) growth of 12.9 percent, that the church hasn’t released anything since, and that, given economic and demographic changes since the 1950s, it is impossible to determine the amount of tithing revenue the church brings in. Maybe it’s less satisfying, but it’s more accurate.


So here’s the deal: I don’t know that I can recommend this book. It has a ton of interesting facts, and it’s an easy read, but the analysis is superficial at best, and frankly detracts from the story Quinn should have been telling.

That’s not to say there’s anything malicious here: Quinn doesn’t accuse the church of trying to hoard wealth, and doesn’t pretend that the church is purely a profit-making enterprise disguised as a church. That is, I didn’t read any polemic here. But I’m not convinced that he worked hard enough to understand the data that he had; he certainly didn’t construct an accurate or compelling story about the Mormon church and money. And I’m not sure that he even established a baseline for the story that I hope will one day be told.

(For other takes on the book, take a look at Ben Park’s review and Steve Evans’s summary review.)

[fn1] Loc. 4601. Since I read the Kindle version, I don’t have the physical page numbers, so I’m going to cite to Kindle locations.

[fn1.5] Loc. 4608.

[fn2] Starting at loc. 4322. Emphasis added.

[fn3] Loc. 149.

[fn4] Loc. 113.

[fn5] Loc. 4262.

[fn5] CPI creates these inter-temporal comparisons of prices by measuring the price of a basket of consumer goods year to year and using changes in that price as an indicator of how much a dollar can buy.

[fn6] Loc. 149.

[fn7] Loc. 849, Table 1.7.

[fn8] Loc. 4945.


  1. Kevin Barney says:

    Thanks for the review.

  2. With the tithing estimates, one could also look at the historical international data and see how that moved. Furthermore, one could have traced out membership growth patterns, the changes in median household income, and a slew of other data to get at a better estimate.

    I don’t have a problem with throwing out estimates, even when based on a tiny amount of data. But I think there should have been more of an effort to calculate a range. Any mention of a specific number (33 point 7 Billion) is un-scholarly.

    As an economist, I agree that there is a real missed opportunity here.

  3. Thanks for this review, Sam. It seems that Quinn could have used the help of experts on tax and tax exemption, securities, economic history, and basic mathematics–“mean average”?? But what about his publisher? Isn’t there an editorial staff there? Shouldn’t they have sent the manuscript to readers who might have raised the very questions that you have? Or does Quinn come trailing such clouds of glory that nobody dares raise those questions?

  4. Thanks, Chris. You’re absolutely right that there are ways to produce estimates of tithing revenue, but those estimates necessarily will be a range, and come with significant chances that they’re wrong.

    Mark, you’re absolutely right—Signature did Quinn a huge disservice. It should absolutely have pushed back; there’s a not-terrible early draft in what they published, but it wasn’t yet ready for primetime. Letting an author know that strikes me as at least part of what a publisher should do.

  5. As a fan of Quinn’s other two volumes on the Mormon hierarchy, I too, was waiting to read and get enlightened. As an engineer, MBA and amateur economist, I was also disappointed with some of the similar things you bring up and the lack of understanding of what I consider pretty basic finance.

    To Mike’s credit, though, on the various podcasts which he appeared (KUER, Mormon Stories) he is quick to point out that he is not an economist, and doesn’t have much financial training. Some of the items he brings up in those interviews regarding things financial sometimes makes me cringe at how little knowledge he does have about this topic.

    That all said, I still appreciate his solid historical fact finding about various financial aspects of the church. Unfortunately, as I sit here as a very nuanced member, his book simply re-enforces my sinking feeling that I belong to a very good real-estate company that is also a church.

  6. Quinn’s book was peer-reviewed, including reviews by economists.

    Perhaps BCC would consider inviting Quinn to discuss his work, his approach and methods, and his response to this review.

  7. “Quinn’s book was peer-reviewed, including reviews by economists.”

    Not all economists are legitimate superheroes like myself.

  8. Gary, that’s interesting. Can you explain how they let his use of CPI, his 12.9% growth to arrive at a specific number, and his assertion that commercial paper is stock pass? If it was peer-reviewed, and the peer reviewers didn’t flag these issues, they didn’t do their jobs well enough. These are fundamental problems with the analysis, and problems that should have been caught and corrected.

  9. Peer review can be challenging. The anonymous reviewers of Quinn, of whom I’m aware, were both academics.

  10. That’s a good point, Gary, thanks. Peer review is absolutely an imperfect system for ensuring perfection.

  11. For what it’s worth, I’ve glossed over numbers while reviewing articles; when it’s a pro bono activity it’s sometimes hard to conjure up the energy to go over everything with a fine-toothed comb, and I assume that that’s much more true for book-length manuscripts.

  12. Thanks for the review, Sam. I really appreciate having someone with your expertise weigh in on the book!

  13. Thanks for the review. You make a convincing case that the book is shy an edit or a next version.

    For the most part I can make cpi adjustments on my own. What I can’t do easily–and what I’d hope to find in a book like this–is sort out significance in context. Things like how big was a $2 million debt at the turn of the century compared to assets? Or annual tithing receipts? Or monthly cash flow? Things like the shift from church-owned banks to commercial paper (Clark to Richards) suggests more than simple rent seeking, something more like a philosophical shift from 100% internal development to external investment.

  14. The Right Trousers says:

    Thanks, Sam. This is great.

    I think what Quinn needs most here is a coauthor. If misunderstanding something causes you to ask the wrong questions, simply addressing a reviewer comment about it isn’t likely to get you to ask the right ones.

  15. Sam, Good questions. It would be great if Mike himself were address the questions you raise. (I would only be second-guessing.) I understand juvenileinstructor has invited him to participate in a Q&A. I hope he agrees to, and that he has a opportunity to address your review and its criticisms. As for a second edition of the book, Mike is nothing if not committed to accuracy, and I’m sure he wants his work to be as accurate as possible.

  16. That sounds great, Gary; thanks for the head’s-up.

  17. Matt Godfrey says:

    Very illuminating review, Sam. Thanks!

  18. Thanks for the insight, Gary. I have also seen Quinn’s trepidation during his interviews concerning the number’s side. A linear projection forecast is a completely valid method, its just far less powerful than other tools that could be put together with the available data.

    I should probably say that I pointed out the lack of range, because I just finished teaching Darrell Huff’s 1954 classic, “How to Lie With Statistics.” He makes that point almost every other chapter.

    One more point, if I may: I agree that the difference between commercial paper and stock is important for moral reasons. What type of assets should the Kingdom of God invest the widow’s mite? Commercial paper is a loan, implying a distance and separation. The banker is not primarily responsible for the decisions of the lendee. Whereas a stock owner assumes some level of responsibility for the actions of the business. It’s more than a mere interest bearing saving’s account.

  19. At first I thought you were just going to have some complaints about esoteric points of tax law. But my academic background and lifelong interest is history, and I’ve held a securities license for more than 25 years, and those are important issues you’re raising. They leave at least as many questions as they answer. If nothing else they show a disappointing lack of clarity in language, on an issue that requires clarity in language. Thanks, Sam, this is a great help.

  20. Estimating tithing revenue is easier than you think if you are willing to have wide error bars. But for most purposes that is close enough.

    First, set aside the idea of average and consider that the rich pay a lot more. An income of a million bucks pays $100,000 tithing. It takes 10 earners of $100,000 to equal it and 100 earners of $10,000.

    Next you ask the finance clerk in a ward with a lot of high rollers (but not unusually high), say the east bench of Salt Lake or a somewhat wealthy ward in a larger city. He will tell you the tithing haul each year is about 1-2 million bucks. Then looking at about 30,000 wards in the church world wide, maybe a third or half in poor countries; you guess about 4 to 6000 wards pay the bulk of the tithing. That gives about 4 to 12 billion dollars in tithing. It might be more or less. This is not a 95% confidence range, more like a 65% confidence range; or maybe even more like the weather in Atlanta when a predicted less than 1 inch of snow turned into 10 inches recently.

    Obviously 30 billion is probably way too high, 1 billion is probably too low. Unless most rich people lie on those TR interviews and pay way less and the average to poor people pay even less than you think.

    What is impossible to calculate is LDS corporate earnings. Nothing to go by except multi-billion dollar malls. I read somewhere that number is 65 billion annually and I heard that in 2001 (9/11) with heavy investment in insurance that they LOST money. Who can tell?

    If an armchair self-derided financial wizzard like myself gives about as useful and accurate information as Quinn, this book might not be that good.

  21. Nunya Bidniss says:

    I’m not entirely surprised at the findings. Everyone seem to love his work, but I found it really sloppy by (my) academic standards. I really don’t know what standards historians hold to, but his practices –if used in my academic field– wouldn’t get him notoriety or a book, much less an article published.

    While an academic some years ago, I decided to check the primary sources of the foot/end notes in a couple of his early books. On one book, I didn’t get past 4 sources before I found misquotes, and by entry 6 I found quotes of invented context, and eventually worse (IMO). In less than one chapter, I was so tired of and disappointed in all the mistakes or fabulating of the original sources, I quit the (self imposed) project.

    I haven’t manage to gather enough esteem for him to get me to pick up *any* of his books since.

  22. Nice comments, Sam. I’m not sure it’s fair to hold a historian to the degree of financial acumen of a tax prof, but the corrections are helpful.

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