Solution Manual for Financial Reporting and Analysis 5th Edition by Revsine

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Chapter 01 - Functions and Roles of Financial Institutions and Markets in the Global Economy
1-1
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Chapter 1
Functions and Roles of Financial Institutions and Markets
in the Global Economy
Learning Objectives in This Chapter
• You will understand the functions performed and the roles played by the system
of financial institutions and markets in the global economy and in our daily
lives.
• You will discover how important financial institutions and markets, including
the whole financial system, are to increasing our standard of living, generating
new jobs, and building our savings to meet tomorrow’s financial needs.
What’s in This Chapter? Key Topics Outline
• How the System of Financial Institutions and Markets Interfaces with the
Economy
• The Importance of Savings and Investment
• The Nature of Financial Claims in the Financial Markets
• Functions of Financial Institutions and Markets: Savings, Wealth, Liquidity,
Credit, Payments, Risk Protection, and Pursuing Public Policy
• Types of Financial Markets within the Global Financial System
• Factors Tying All Financial Markets Together
• The Dynamic Financial System: Key Emerging Trends
Chapter Outline
1.1. Introduction to the System of Financial Institutions and Markets
1.2. The Global Economy and the System of Financial Institutions and Markets
1.2.1. Flows within the Global Economic System
1.2.2. The Role of Markets in the Global Economic System
1.2.3. Types of Markets
1.2.4. The Financial Markets and the Financial System: Channel for Savings
and Investment
1.2.4.1. Nature of Savings
1.2.4.2. Nature of Investment
1.3. Economic Functions Performed by the Global System of Financial Institutions
and Markets
1.3.1. Savings Function
1.3.2. Wealth Function
1.3.3. Liquidity Function

1-2
1.3.4. Credit Function
1.3.5. Payments Function
1.3.6. Risk Protection Function
1.3.7. Policy Function

1-3
1.4. Types of Financial Markets within the Global Financial System
1.4.1. The Money Market versus the Capital Market
1.4.2. Divisions of the Money and Capital Markets
1.4.3. Open versus Negotiated Markets
1.4.4. Primary versus Secondary Markets
1.4.5. Spot versus Futures, Forward, and Option Markets
1.5. Factors Tying All Financial Markets Together
1.5.1. Credit, the Common Commodity
1.5.2. Speculation and Arbitrage
1.6. The Dynamic Financial System
1.7. The Plan of This Book
Key Terms Appearing in This Chapter
financial system, 3
market, 4
financial market, 6
savings, 6
investment, 6
wealth, 8
net worth, 8
financial wealth, 8
net financial wealth, 8
liquidity, 9
credit, 9
money market, 12
capital market, 12
open markets, 14
negotiated markets, 14
primary markets, 14
secondary markets, 14
speculators, 16
arbitrage, 16
Questions to Help You Study
1. Why is it important for us to understand how the global system of financial
institutions and markets works?
Answer: The global financial system of institutions and markets is an integral part of
the global economic system. It is the collection of markets, institutions, laws,
regulations, and techniques through which bonds, stocks, and other securities are
traded, interest rates are determined, and financial services are produced and delivered
around the world.
2. What are the principal links between the financial system and the economy?
Why is each important to the other?
Answer: The principal link between the financial system and the economy is the
Financial Markets. The financial markets channel savings to those individuals and
institutions needing more funds for spending than are provided by their current
incomes. The financial markets are the heart of global financial system, attracting and
allocating saving and setting interest rates and prices of financial assets (stocks, bonds,
etc.).

1-4
3. What are the principal functions or roles of the global financial system? How
do financial institutions and markets fulfill those roles or functions?
Answer: The principal function or role of the global financial system is to move scarce
loanable funds from those who save to those who borrow to buy goods and services and
to make investments in new equipment and facilities so that the global economy can
grow and increase the standard of living enjoyed by its citizens. Those who supply
funds to the financial market receive promises packaged in the form of financial claims
(future dividends, interest, etc.) and financial services (stocks, bonds, deposits, and
insurance policies) in return for the loan of their money.
4. What exactly is saving? Investment? Are these terms often misused by people on
the street? Why do you think this happens?
Answer: Saving: For households, savings are what is left from current income after
current consumption expenditures and tax payments are made. For the business sector,
savings include current earnings retained inside business firms after payment of taxes,
stockholder dividends , and other cash expenses. For government, savings arise when
there is a surplus of current revenues over current expenditures in a government’s
budget.
Investment: Investment generally refers to the acquisition of capital goods, such as
buildings and equipment, and the purchase of inventories of raw materials and goods to
sell. For households, investment is the purchase of a home. For business firms,
investment is the expenditures on capital goods (buildings, equipment and other fixed
assets) and inventories (raw materials and goods for sale). For government, investment
is the expenditures to build and maintain public facilities (buildings, monuments,
highways, etc.).
The terms may be misused since their definitions depend on the type of unit in the
economy that is doing the saving or investment.
5. How and why are savings and investment important determinants of economic
growth? Do they impact our standard of living? How?
Answer: The role of the financial system in channeling savings into investment is
absolutely essential to the growth of the economy. For example, if households set aside
savings and those funds are not returned to the spending stream through investment by
businesses and governments, future income payments will decline, leading, in turn to
reduced consumption spending. Then, the public's standard of living will fall. On the
other hand, if the households save and these savings are channeled into investment, the
economy's productive capacity will increase. In turn future income payments will rise,
making possible increased consumption spending and a higher standard of living.

1-5
6. What seven vital functions does the financial system of money and capital
markets perform?
Answer: Savings Function: Bonds, stocks, and other financial claims produced and
sold in financial markets by financial institutions provide a profitable, relatively low-
risk outlet for the public’s saving which flow through the financial markets into
investment. Wealth Function: A stock of assets (the financial instruments) sold by
financial institutions in financial markets provide an excellent way to store of wealth.
Liquidity Function: Financial markets provide liquidity (immediately spendable cash)
for savers who hold financial instruments but are in need of money. Credit Function:
Global financial markets furnish credit to finance consumption and investment
spending. Payments Function: The global system of financial institutions and markets
provides a mechanism for making payments for goods and services. Risk Protection
Function: The financial institutions and markets around the world offer businesses,
consumers, and government protection against life, health, property, and income risks.
Policy Function: The financial markets are a channel through which governments may
attempt to stabilize the economy and avoid inflation.
7. Why is each function of the financial system important to households,
businesses, and governments? What kinds of lives would we be living today if there
were no financial system or no financial markets?
Answer: Each function of financial system will create a need for the money and capital
markets through the flow of funds and the flow of financial services, income, and
financial claims. Without savings, wealth and liquidity, our future consumption may be
limited. It will also be disastrous if our source of income is disrupted. Without credit,
our consumption and investment spending will be limited. Without the payments
function, we will not be able to buy goods and services. Without risk protection, we
will be exposed to life, health, property, and income risks. Without the policy function,
the economy may fluctuate freely beyond control.
8. What exactly do we mean by the term wealth? How does it differ from net worth?
Why is it important?
Answer: Wealth is the sum of the values of all assets we hold at any point in time. The
increase (or decrease) in the total wealth we own in the current time period equals to
our current savings plus the value of all previously accumulated wealth multiplied by
average rate of return on all previously accumulated wealth. While the measure of an
individual’s wealth is important measure of their financial position, a more accurate
measure is that of net worth. Net worth is the difference between an individual’s assets
and their liabilities. It is important because wealth holdings represent stored purchasing
power that will be used as income in future periods to finance purchases of goods and
services and to increase the society's standard of living.
9. What is net financial wealth? What does it reveal about each of us?
Answer: Net financial wealth equals to financial assets - total debt. Net financial wealth
indicates our net value, i.e., the residual value of all our assets after fulfilling all our
financial obligations.

1-6
10. Can you explain what factors determine the current volume of financial wealth
and net financial wealth each of us has?
Answer: The volume of financial wealth is thus dependent on current savings (which
is in turn dependent on current income - current expenditures) and the size of previously
accumulated wealth. The volume of net financial wealth is thus dependent on the
current volume of financial wealth and the total debt. The average rate of return is one
of the factors in the volume of financial wealth. Furthermore, different units in the
economy have different wealth and net wealth due to their different inheritances of
wealth, capabilities of creating and retaining wealth, luck, foresight, debt preferences,
opportunities, etc.
11. Can you distinguish between the following institutions?
Money market versus capital market
Open market versus negotiated market
Primary market versus secondary market
Spot market versus forward or futures market
Answer: The money market is for short-term (one year or less) loans, while the capital
market finances long-term investments by businesses, governments, and households. In
an open market, financial instruments are sold to the highest bidder, and they can be
traded as often as is desirable before they mature. In a negotiated market, the
instruments are sold to one or a few buyers under private contract. The primary market
is for the trading of new securities (often used for new investment in buildings,
equipment, and inventories), while the secondary market deals in securities previously
issued (provide liquidity to security investors). In the spot market, assets or financial
services are traded for immediate delivery (usually within two business days). Contracts
calling for the future delivery of financial instruments are traded in the futures or
forward market.
12. If we follow financial institutions and markets around the world each day, it
soon becomes apparent that the interest rates and asset prices in different markets
tend to move together, albeit with small leads and lags. Why do you think this is
so?
Answer: For the common commodity and credit, borrowers can switch from one credit
market to another, seeking the most favorable credit terms wherever they can be found.
The shifting of borrowers among markets helps to weld the parts of the global financial
system together and to bring the credit costs in the different markets into balance with
one another. Also, speculators work to equilibrate asset prices by purchasing assets that
they believe are under priced and by selling those that they believe are overpriced.
Similarly, arbitrageurs purchase underpriced assets in one market in order to sell them
in a market which overvalues them.

1-7
13. What are some of the forces that appear to tie all financial institutions and
markets together and often result in common movements in prices and interest
rates across the whole financial system?
Answer: Credit, the common commodity, can help the borrowers shift between markets
and weld the parts of the financial system together, thus bringing the credit costs in the
different markets into balance with one another. The speculators are continually on the
lookout for opportunities to profit from their forecasts of future market development.
The arbitrageurs help to maintain consistent prices betweens markets aiding other
buyers in finding the best prices with minimal effort.
14. What is meant by the dynamic financial system? What trends appear to be
reshaping the financial system of financial institutions and markets?
Answer: The global financial system is rapidly changing into a new financial system,
powered by innovation as new financial services and instruments continually appear o
attract customers. Major trends are under way to convert smaller national financial
systems into an integrated global system, at work 24 hours a day to attract savings,
extend credit, and fulfill other vital roles. Many countries have begun to harmonize their
regulations so that financial service firms operate under similar rules no matter where
they are located.
Problems and Issues
1. Identify which of the following statements is correct and which is false. If the
statement is false, identify the error and correct the statement.
a. The change in a household’s wealth over a quarter is its income minus
its expenses plus interest earned on its wealth held at the beginning of the period.
ANSWER: False – household’s wealth must also take into account the value of the
individuals asset holdings as well as their liabilities.
b. The market value of a household’s home is equal to the equity that the
household has in the home and is therefore part of the household’s net worth.
ANSWER: False – Market value of a home is not equal to the equity that the
household has in the home. Market value of the home is the going price for such a
home in current time, while equity is the new sales price minus the debt outstanding
on the home.
c. The saving and wealth functions performed by the financial markets
enable households to increase current consumption at the expense of future
consumption.
ANSWER: True

1-8
2. Which of the following economic functions that financial markets perform
would be best represented by the following properties of U.S. Treasury bills:
(i) the fact that they retain their value over time and (ii) their ability to be
sold on short notice at their true market value?
a. Liquidity and risk protection
b. Wealth and liquidity
c. Policy and wealth
d. Risk protection and policy
Answer: b
3. John Jacobs looks over his balance sheet from the beginning of the month. He
observes that his assets include: (i) a market value of $120,000 for his home;
(ii) $25,000 in corporate stock; (iii) a Treasury bill with a face value of $1,000
to be received at the end of the month, for which the current market value was
$983; (iv) a bank deposit account of $6,000; and (vi) some miscellaneous items
that he values at $35,000. His only outstanding liability is the mortgage on his
house, which has a balance totaling $40,000. It is now the end of the month
and he just received his $6,000 salary, along with the income from the maturing
T-bill and interest on his bank deposits, which were paying an annualized
interest rate of 2 percent (2/12 percent per month). His mortgage payment was
$1,500, of which $500 would go toward the principal. His other expenses for
the month came to $4,000. He had planned to make an additional house
payment for the month, all of which would go to paying down the principal on
the loan. However, his daughter is in college and wants to go to the Bahamas
for spring break. The expense of her trip would be an additional $1,800.
a. Would he be able to make the additional house payment and fund his
daughter’s trip without reducing his account balance in the bank deposit
account?
ANSWER: His total monthly income, including the bond and interest payments
equal $1,000 + $6,000 + $10 = $7,010.
His total expenses this month if he chooses to fund his daughter’s trip and make
the additional payment on the house is $1,500 + $4,000 +$1,500 + $1,800 =
$8,800.
Therefore he would have to draw down his savings account by $7,010-$8,800
= $1,790.
b. What would his net worth be if he funded his daughter’s trip and made the
additional mortgage payment?
ANSWER: His total assets would consist of a home valued at $120,000,
$25,000 in corporate stock, a bank account of $4,210, and miscellaneous items
totaling $35,000. This brings his total assets to $184,210.

1-9
His only liability is the outstanding balance on his mortgage. His made two
payments of $1,500 on his mortgage this month. One of the payments included
a $500 payment on the principal of the loan. The other payment was a principal
only payment. Thus the new outstanding balance of his mortgage is $40,000 -
$500 - $1,500 = $38,000.
So his net worth is given by his total assets less his total liabilities, or $184,210
- $38,000 = $146,210.
c. What would his net worth be if he did not fund his daughter’s trip and
made the additional mortgage payment?
ANSWER: If he did not fund his daughter’s trip, but he did make the extra
payment, then his monthly expenses would be $1,500 + $4,000 +$1,500 =
$7,000. His monthly income, including the maturing bond and interest
payments, would still be $7,010. This means that he would be able to increase
his deposit account by $7,010 - $7,000 = $10 this month.
Given this, his assets would be a home valued at $120,000, $25,000 in corporate
stock, a bank account of $6,010, and miscellaneous items totaling $35,000. This
brings his total assets to $186,010.
Since he still made the extra payment, his total liabilities remain the same as in
part b. So his net worth would be $186,010 - $38,000 = $148,010
d. Would his net worth change if he decided to fund the trip, but did not make
the additional mortgage payment? Explain.
ANSWER: If he funded his daughter’s trip, but did not make the extra payment,
his monthly expenses would be $1,500 + $4,000 + $1,800 = $7,300. His income
would still be $7,010. This means that he would need to draw on his savings by
$7,010 - $7,300 = $290.
Given this, his total assets would be $120,000 + $25,000 + $5,710 + $35,000 =
$185,710. Since he did not make the extra mortgage payment, his liability is
only reduced by the $500 principal payment of the original mortgage payment.
So his total liabilities are given by $39,500.
This means that his net worth is $185,710 - $39,500 = $146,210.
Coming into the month his net worth was given by
$120,000 + $25,000 + $6,000 + $1,000 + $35,000 - $40,000 = $147,000
So his net worth fell by $147,000 - $146,210 = $790.
This happened because the $1,000 matured and was spent, reducing his assets,
while at the same time his liabilities was reduced by $500 from the principal
payment on his mortgage. Together this results in a $500 reduction in net worth.
The other $290 in net worth reduction comes from the drawing down of his bank
account to cover current expenses.
So in summary, the principal payment boosted his net worth by reducing his
liabilities by $500, but the spending of the bond and the drawing down of his

1-10
deposit account for current consumption reduced his assets by $1,290.
Together, the net effect is a reduction of $790 in his net worth.
4. George Wintle purchased a new home valued at $200,000. He paid a 20 percent
initial down payment. He looked at his balance sheet to determine what his
cash flow would be for the month. His new mortgage payment was $1,200, of
which only $100 would go toward the principal in the first month. He had a
bank deposit account of $3,500, which he had set aside for a shot vacation. He
also owned $3,000 in corporate stock. His income for the month was $5,000,
but he anticipates receiving a sales bonus of $1,500. He estimated his usual
monthly expenses, other than his mortgage, to be $3,500.
a. If his estimates are all accurate, would he have any additional income left
over at the end of the month that he could add to the money he had set aside
for his upcoming vacation?
ANSWER: If his estimates are correct, he will receive $5,000+$1,500 = $6,500
in income this month and will have $1,200+$3,500=$4,700. This means he will
have $6,500-$4,700=$1,800 left over that he could add to his vacation account
b. If he failed to receive the sales bonus, would he have to sell stock to keep
from drawing down his bank deposit account and having to curtail his
vacation?
ANSWER: If he fails to receive his sales bonus, he will still earn $5,000. In
this case he will have $5,000-$4,700 = $300 left over to put toward his vacation
5. Megan Morgan recently graduated from college and was just hired at a large
retail firm for $36,000 per year. She estimates her personal belongings to be
worth $7,800. She has school loans of $10,000 that will require her to make
monthly payments of $125 for the next 10 years. She rents an apartment for
$550 per month and estimates that she will have monthly expenses for utilities,
phone, cable, and so forth of $150. She needs a car and has a small noninterest-
bearing bank account of $2,000. She could either buy a used car for $1,600 or
take out a loan for $10,000 for a new compact. The new loan would require a
down payment of $2,000 and five years of monthly payments of $350. Her
parents are willing to give her $1,000 for graduation, which she could apply to
the purchase of a car. Megan estimates that $1,600 per month in discretionary
income would be comfortable for her to live on.
a. What was her net worth when she graduated?
ANSWER: Her total assets were given by here total belongings valued at
$7,800 plus her noninterest-bearing account of $2,000 and plus the $1,000
graduation gift from her parents (assuming that they gave this to her prior to our
accounting). This means her assets total to $10,800.
Here only liability is her $10,000 in student loans, so her net worth is $800.

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b. How much discretionary income would she have each month if she bought
the new car? Would it be feasible for her to save $250 per month and make
all her payments?
ANSWER: Assuming she lives in a world without income tax, her monthly
salary would be $3,000. If she bought the new car, she could use $1,000 of her
bank account balance along with the $1,000 her parents gave her to cover the
down payment.
Her monthly expenses would equal $120 + $550 + $150 + $350 + $1600 =
$2,770. Again, her monthly income, assuming no income tax, is $3,000. This
means she would have $3,000 - $2,770 = $230 left over every month. So she
would not be able to save $250 a month.
c. What would her discretionary income be after the first month if she bought
the used car? Could she now save that $250 per month?
ANSWER: If she bought the used car, here expenses would fall by the amount
of the new car payment to $2,420. Her leftover monthly income would now be
$3,000 - $2,420 = $580.
6. Classify the market in which each of the following financial transactions takes
place as: (i) money versus capital, (ii) primary versus secondary, (iii) open
versus negotiated, or (iv) spot versus futures or forward.
a. A contract to receive wheat three months from today
ANSWER: (iv) spot versus futures or forward
b. The purchase of a share of IBM on the New York Stock Exchange
ANSWER: (iii) open versus negotiated
c. A six-month CD purchased from your bank
ANSWER: (i) money versus capital
d. A newly issued three-month Treasury bill purchased at the government’s
weekly auction
ANSWER (ii) primary versus secondary
e. You open a bank savings account
ANSWER (iii) open versus negotiated
f. You write a check to purchase for cash
ANSWER (i) money versus capital

1-12
7. At the end of the calendar year, a firm has total financial assets amounting to
$4.32 billion, while its total liabilities are $3.58 billion. What is the firm’s net
financial wealth? If the firm saved $50 million over the previous year,
representing the amount by which its financial assets rose relative to its
liabilities, and it had begun the year with 3.72 billion in total financial assets,
how much did it earn on its previously accumulated assets?
ANSWER: The firm’s net financial wealth is given by $4.32 billion - $3.58 billion
=$ 0.74 billion
8. One definition of pure arbitrage is to combine a series of investments with a
series of debts such that the net dollar investment is zero, no risk is taken, and
a profit is made. How does this differ from pure speculation in the financial
markets? Do you think that arbitrage opportunities can really exist? If so, do
you think the opportunities for pure arbitrage would be long-lived? Please
explain.
ANSWER: Pure speculation in the financial market gambles that security prices
or interest rates will move in a direction that will result in quick gains due to the
speculator’s ability to outguess the market’s collective judgment. Thus, speculation
carries risk, and is in contrast with the notion of pure arbitrage presented above.
Yes, arbitrage opportunities can really exist, but they would not be long-lived.
Arbitrageurs will drive down the price of the asset in the market where it is
relatively high, and up in the market where the price is relatively low, until the
security price is the same in both markets. In the future, the new financial services
and instruments will covert smaller national financial system into an integrated
global system. It is difficult for arbitrageurs move from one market to another,
because the financial market will have just only one global financial market.
Web-Based Problems – DATA SERIES MAY BE DIFFERENT
1. Your text defines the wealth of a business firm as the sum of all its assets. To
determine its net wealth (or total equity) you have to subtract the firm's
liabilities from its assets. Net wealth is the value of the firm and should be
reflected in its market capitalization (or stock price times the number of shares
outstanding). Firms in different industries will require different amounts of
wealth to create the same market value (or market capitalization). In this
problem you are asked to compare the wealth (total assets), net wealth (assets
less liabilities), and market capitalization of a large firm in each of the
following industries: Financial Services (Citigroup, ticker symbol C);
Manufacturing (Caterpillar, CAT); and High Tech (Microsoft, MSFT). Using
the financial resources of worldwide web key in each firm's ticker symbol and
find its most recent balance sheet and its market capitalization under. Are you
surprised by how different these firms are in

1-13
terms of the dollar value of assets required to create one dollar of market value?
Answer: You can use the website http://finance.yahoo.com. These are the financial
data on December 2006:
For Citigroup, C: The Total Asset 1,884,318 million dollars
The Total Liabilities 1,764,535 million dollars
Net Wealth 119,783 million dollars
The Market Capitalization 265,430 million dollars
$1 of market value equal $7.1 of value of assets
For Caterpillar, CAT: The Total Asset 50,879 million dollars
The Total Liabilities 44,020 million dollars
For Microsoft, MSFT: The Total Asset 69,597 million dollars
The Total Liabilities 29,493 million dollars
2. A large share of household wealth is held in the form of corporate stock. How
much wealth does the entire stock market represent? To find an approximate
answer, go to the web site for Wilshire Associates at www.wilshire.com and
click Indexes from the menu. Locate the information that explains how the
Wilshire 5000 index is constructed. This index is weighted by the market
capitalization of the firms included in it, such that if you add the right amount
of zeros to the index, you obtain the total value of all the firms represented in
the index. Why is this number a good approximation to the entire U.S. stock
market? Now obtain a chart for the index. How much stock market wealth has
been created or destroyed over the past 12 months? Determine how much stock
market wealth was created or lost per person in the United States over this
period. (Hint: You can find the U.S. population at
http://www.census.gov/main/www/popclock.html). Compare this with the
average after-tax annual income per person in the U.S. Use the disposable
personal income figure that can be found under “Selected NIPA Tables: Table
2.1” at www.bea/gov.doc/bea/dn/nipaweb/index.asp to make the comparison.
Answer: As of June 6, 2007, the total wealth that the entire stock market represents is
15,291.15 billion (from http://www.wilshire.com/quote.html?symbol=dwc). The Dow
Jones Wilshire 5000 base is its December 31, 1980 capitalization of $1,404.596 billion.
The index is an excellent approximation of total value of the U.S. equity market because
it measures the performance of all U.S. headquartered equity securities with readily
available price data.
The following is a chart of the index over a year (from 6/22/06 to 6/21/07):

1-14

1-15
.
Since the difference in the index is approximately 2,800 (=15,300-12,500), we
found the stock market wealth creation to be $2,800 billions for the period between
June 22, 2006 and June 21, 2007.
During this period of time, the U.S. population is approximately 302,152,705
(from http://www.census.gov/main/www/popclock.html). Therefore, $5,060.74 worth
of stock market wealth was created per person in the United States over this period.
During the first quarter of 2007, the disposable personal income is roughly at
$9,898.0 billion, or $32,758.2 per person
(from http://www.bea.gov/bea/dn/nipaweb/TableView.asp#Mid).
3. One of the world's most important financial markets that we will study
throughout this book is the market for U.S. Treasury securities. It is important
because it is one of the few default-free, highly liquid debt instruments
available anywhere in the financial marketplace. To determine the size of this
market go to the Treasury Department’s website at www.treasurydirect.gov
and find the Monthly Statement of the Public Debt (MSPD). How much debt
does the U.S. government owe per person in the United States? (See the
previous problem on how to find the U.S. population figure.) How much of this
debt is held by the public and how much by government agencies? Only a
portion of this debt - termed “marketable” - is traded daily in the system of
financial markets and institutions. The remainder is held by the buyer until it
matures. How much of this public debt is “marketable”?
Answer: http://www.treasurydirect.gov/govt/reports/pd/account/2007/2007_may.pdf
As of May 31, 2007, the amount of debt outstanding held by the public (Non-
governmental) is $4,977,832 millions. When we divide the amount of debt outstanding
by the size of the U.S. population, we obtain the debt that the U.S. government owes
per person in the United States - $16,475. The amount of debt held by the public (Intra
& Non-governmental) is $9,142,527 million, while the amount of debt held by
government agencies is $4,164,695 millions. Of the total amount of $9,142,527
millions of public debt outstanding, $4,977,832 millions, or approximately 54.45 %, of
it is marketable.

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Zion, and now all expectation of peaceful rest on earth was over—
the bitter end had come.
“We dug graves for them by the wayside in the desert, and there
we laid them with many tears, scarcely daring to look one another in
the face, for we felt that our own time might perhaps be nearer than
we thought.
“One by one at first they fell off, but before long the deaths
became so frequent that it was seldom that we left a camp-ground
without burying one or more. This was, however, only the beginning
of evil.
“Soon it was no longer the aged and sickly who were taken off,
but the young and strong, who under other circumstances would
have set disease and death at defiance. Cold, hunger, and excessive
toil brought on dysentery; and when once attacked by that there
was little hope for the sufferer, for we had no medicine, and it was
quite out of our power to give them relief in any other way. I now
began to fear for my husband, for I had noticed for some time an
expression of extreme weariness in his face. Our trials had not
hardened our hearts; on the contrary, I think, as death seemed to be
drawing near, our affection for each other grew more pure and
devoted, and in my heart I often prayed, that if it were His will, God
would let us die together and rest in the same grave. We never
spoke a word to each other on this subject, but we felt the more. I
exerted all my strength, and day after day toiled along at his side,
helping him all I could; but although he never complained, I saw in
his eyes a dull and heavy look which, more than any words, told of
failing strength and the approach of disease, and my heart sank
within me.
“But my own troubles did not alone engross my attention; there
was too much wretchedness around us to allow any one to be
absorbed entirely in his own griefs. Acts of devotion on the part of
both parents and children came before me daily such as would have
put to shame the stories of filial and parental piety which we used to
be taught at school.

“I saw one poor man, whose health had evidently never been
strong, draw the cart with his two little ones in it, as well as the
baggage, mile after mile, until he could hardly drag his weary limbs
a step further; his wife carried a little five-months old baby in her
bosom. This they did day after day, until disease attacked the
husband, and it was evident that he could bear up no longer. The
next morning I saw him, pale as a corpse, bowed down, and
shivering in every limb, but still stumbling on as best he could.
Before the day was half over, the poor wife lagged behind with her
babe, and the husband did not seem to notice her. This was not the
result of heartlessness on his part; I believe that even then he had
lost all consciousness. He did not know it, but he was dying. Still he
stumbled on, until the short wintry day came to a close, and we
pitched our camp, and then I missed him. There was no time to
inquire, and a chill came over my heart as I thought of what might
be his fate. Presently my husband came to the tent and told me all.
The poor man had dragged the cart up to the last moment, and,
when the company halted for the night, he had turned aside, and
sitting down he bowed his head between his knees and never spoke
again. Later still, the poor wife reached the camp, and I saw her
then. There was no tear in her eyes, and she uttered neither cry nor
moan, but there was upon her features a terrible expression of fixed
despair which I dared not even look upon.
“A few days after this, one morning as we were almost ready to
start, I saw that poor mother in her tent, just as they had found her.
She was cold and still—frozen to death—her sorrows were over at
last, and her poor weary spirit was at rest; but on her bosom, still
clasped in her arms, and still living, was her little child, unconscious
of its mother’s fate.
“Most of those who died, as far as I could tell, seemed to pass
away quietly and with little pain, as if every feeling of the heart were
numbed and dead. But my own sufferings and fears at that time
were so great that I could not be a very close observer. Strange as it
may seem, the fear of death did not so much appear to terrify these
poor victims as the thought that their bodies would be buried by the

wayside in the desert, instead of in the sacred ground of Zion. Poor
souls! the absorbing passion of their life was strong in death.
“As death thinned our ranks, the labours of those who survived
were increased, until at last there were hardly enough left with
strength sufficient to pitch our tents at night. A great deal devolved
upon the captain of our hundred, Elder Chislett. He is a very good
man, and a devoted Saint; and I am glad to say that both he and a
lady to whom he was betrothed, and who was also with our
company, escaped with their lives. I have often seen him, when we
stopped for the night, carrying the sick and feeble on his back from
the waggon to the fire, and then working harder than a slave would
work in putting things straight for the night. He showed a great
many kindnesses to my husband and myself.
“But individual efforts availed nothing against fatigue and hunger,
and the fearful cold. To the minds of all of us, the end was fast
approaching. Nothing but our faith sustained us; and foolish as
many people would think that faith, I am quite sure, that but for it,
no living soul of all our company would have ever reached Salt Lake.
“At last the storm came, and the snow fell—I think it must have
been at least five or six inches deep within half an hour. The wind
was very keen and cutting, and it drifted the snow right into our
faces; and thus blinded by the storm, and scarcely able to stand, we
stumbled on that day for fully sixteen miles. What we suffered it
would be useless for me to attempt to describe. Some of the scenes
we witnessed were heart-rending.

OVER AT LAST.
To face p. 136.
“There was a young girl, with whom I was very well acquainted,
and whom I saw struggling in the snow, clinging to one of the hand-
carts, and vainly trying to help in pushing it on, but really doing just
the contrary. She is now in Salt Lake City, a helpless cripple, her
limbs downwards having been frozen during that storm, and
subsequently amputated. A poor old woman, too, whom I think you
must have known in London, lingered behind later in the day. When
night came on it was impossible for any one to go back to search for
her, but, in the morning, not very far from the camp, some torn rags
—the remains of her dress—were found, a few bones, a quantity of
hair, and at a little distance a female skull, well gnawed, and with
the marks of the wolf-fangs still wet upon it;—the snow all round
was crimsoned with blood.
“We halted for a little while in the middle of that day, and to our
surprise and joy, Joseph A. Young and Elder Stephen Taylor drove

into the camp. We found that when the returning missionaries, of
whom I have already told you, left us by the Platte river, they made
their way as speedily as they could to Salt Lake City. Joseph A., who
felt deeply for our sufferings, although he had been away from home
for two whole years, hastened to his father, and reported to him the
condition in which we were. Brigham Young was of course anxious
to undo the mischief which had resulted from the people following
his inspired counsel, and at his son’s earnest entreaty allowed him to
return with provisions and clothing to meet us. Joseph A. lost no
time, but pressed on to the rescue, and having told us that
assistance was on the way, hastened eastward to meet the company
that was following us.
“I cannot tell you what a relief this intelligence was to the minds
of all, and how much the poor people felt encouraged by it. But as
for me, at that time my heart was sad enough. For some time my
husband’s strength had evidently been failing, and for the last two
days I had felt very serious apprehensions on his behalf. He had
been overtasked, and like the rest of us he was starving with cold
and hunger, and I saw that he could not hold out much longer. My
worst fears were speedily realized. We had not journeyed half a mile
from the place where we rested at noon, when, blinded by the snow,
and completely broken down, he dropped the rail of the cart, and I
saw that he could go no further. How I felt, you, as a wife and
mother, only can guess. In a moment my own weakness was
forgotten; my love for my husband made me strong again. To leave
him there or to delay would have been death to one if not all of us.
So I called to those who shared the cart with us, and they helped
me as well as they could to lift my husband up, and put him under
part of the bedding. It was the only chance of saving his life; for, as
I before mentioned, some, previous to this, who had been
overcome, and had lingered by the way, had been frozen to death or
devoured by the wolves.
“I then took hold of the cross-bar or handle of the cart, and
numbed with the cold, and trembling in every limb, it was as much
as I could do to raise it from the ground. To move the cart was

impossible, so I appealed to the old folks again, and they exerted all
their strength to push it from behind, and our combined efforts at
length succeeded; but the chief weight fell upon me. How gladly I
bore it; how gladly I would have borne anything for the mere chance
of saving my dear husband’s life, your own heart can tell.
“The snow drifted wildly around us, and beat in our faces so
blindingly that we could hardly proceed. The greater part of the train
had passed on while we delayed on account of my husband, and
now every one was making the most desperate efforts to keep up
with the rest; to be left behind was death. Had I been asked
whether under any circumstances I could have dragged that heavy
cart along in all that storm, I should certainly have replied that it
would be utterly impossible; but until we are tried we do not know
what we can bear. It was not until the night came on, and we
pitched our tents, that I realized what I had passed through.
“They helped me to carry my husband to the tent, and there we
laid him, and I tried to make him as easy as was possible under the
circumstances, but comfort or rest was altogether out of the
question. All that night I sat beside him, sometimes watching,
sometimes falling into a fitful sleep. I did not believe that he would
live through the night. In the morning he was by no means
improved, and then I felt too truly the abject misery of our position.
It is a painful thing to watch at the bedside of those we love when
hope for their recovery is gone; but think what it must be to sit upon
the cold earth in the tent, upon the open desert, with the piercing
wind of winter penetrating to the very bones, and there before you,
the dear one—your life, your all on earth—dying, and you without a
drop of medicine, or even a morsel of the coarsest nourishment, to
give him. Oh, the bitterness of my soul at that moment! I tried to
pray, but my heart was full of cursing; it seemed to me as if even
God Himself had forgotten us. The fearful misery of that dark hour
has left on my soul itself a record as ineffaceable as the imprint of a
burning iron upon the flesh.

“The morning broke at last, dark and dreary, and a thick heavy
mantle of snow covered all the camp; but we contrived to
communicate with each other, and soon it was whispered that five
poor creatures had been found dead in the tents. Want, and
weariness, and the bitter cold, had done their work, and we did not
weep for them—they were at rest; but for ourselves we wept that
we were left behind—and we looked at one another, wistfully,
wondering which of us would be taken next.
“We buried those five poor frozen corpses in one grave, wrapped
in the clothing in which they died, and then we comforted each
other as best we might, and left the dead who were now beyond our
reach, that we might do what we could for those who were fast
following them to the grave. A meeting of the leaders was held, and
it was resolved that we should remain where we were until the
promised supplies reached us. We could not, in fact, do otherwise,
for the snow was so deep that it was impossible for us to proceed,
and the sick and dying demanded immediate attention. That
morning, for the first time, no flour was distributed—there was none.
All that remained, besides our miserable cattle, was a small quantity
of hard biscuit which Captain Willie bought at Laramie, and a few
pounds of rice and dried apples. Nearly all the biscuit was at once
divided among the whole company, and the few pounds which
remained, together with the rice and apples, were given to Elder
Chislett for the use of the sick and the very little children. They also
killed two of the cattle and divided the beef. Most of the people got
through their miserable allowance that very morning, and then they
had to fast.
“Captain Willie set out that morning with another Elder to meet
the coming supplies and hasten them on, and as we saw them
disappear in the distant west we almost felt as if our last hope
departed with them, so many chances there were that we should
never see them again.
“The whole of that long, long day I sat beside my husband in the
tent—and I might almost say I did no more. There was nothing that

I could do. The little bedding that was allowed for both of us I made
up into a couch for him; but what a wretched makeshift it was! And
I got from Elder Chislett a few of the dried apples which had been
reserved for the sick; but it was not until nightfall that my husband
was capable of swallowing anything—and then, what nourishment to
give to a sick man! The day was freezing cold, and I had hardly
anything on me, and had eaten nothing since the day before; for my
mind was so agitated that I do not think the most delicate food
would have tempted me. God alone knows the bitterness of my
heart as I sat there during all that weary day. I never expected to
see my husband open his eyes again, and I thought that when
evening came I would lie down beside him, and we would take our
last long sleep on earth together.
“When night came on and all was dark I still sat there; I dreaded
to move lest I should learn the terrible truth—my husband dead! I
looked towards the place where I knew he was lying, but I could see
nothing. I listened, and I fancied that I heard a gentle breathing—
but it was only fancy. Then, louder than the incessant moaning of
the wind, I could hear in the distance a fearful cry—a cry which had
often chilled our hearts at midnight on the plains—it was the wolves!
The darkness grew darker still—so thick that one could almost feel
it; the horror of death seemed stealing over all my senses. Oh that
there might be one long eternal night to blot out for ever our
miseries and our existence. I threw my hands wildly above me, and
cried bitterly, ‘Oh God, my God, let me die!’
“God was nearer to me than I thought. As my hand dropped
lifelessly to the ground it touched some moving thing—it was my
husband’s hand—the same hand which I had watched in the twilight,
stiffening, as I thought, in death. The long, thin fingers grasped my
own, and though they were very, very cold, I felt that life was in
them; and as I stooped down to kiss them I heard my husband’s
voice, very weak and feeble, saying in a whisper, ‘Mary.’ I threw
myself upon his bosom. In a moment the fear of death—the longing
for death—the wild and terrible thoughts, all had gone; the sound of
that voice was life to me, and forgetful of his weakness, forgetful of

everything but him, I threw myself upon his bosom and wept tears
of joy.
“Very carefully and gently I raised him up, and, in the darkness,
every whispered word conveyed more meaning to my mind than all
his eloquence in by-gone times. After some time I persuaded him to
take a little nourishment—miserable stuff that it was—and presently
he fell asleep again. I laid his dear head upon the best pillow that I
could make of some of my own clothes, and then I slept a little
myself—not much, but it was more refreshing than any sleep that
had visited my eyes for a long time past—hope had come again.
“The next morning my husband was evidently better, and I knelt
down beside him and thanked God for the miracle that He had
wrought; for was it not a miracle thus to raise my dead to life again?
How many stronger, stouter men than he had I seen fall sick and
die; but to me God had shown mercy in my utmost need.
“We waited three long days for the return of Captain Willie. My
heart was so full of thankfulness that my husband had been spared
that I certainly did not feel so acutely the misery with which I was
surrounded as I otherwise should have done; I was like the prisoner
who feels happy in a reprieve from death, but whose situation is
nevertheless such as would appear to any other person the most
wretched in which he could be placed. The misery that was suffered
in that camp was beyond the power of words to describe. On the
second day they gave us some more beef-rations, but they did us
little good. The beef was, of course, of the poorest, and, eaten
alone, it did not seem to satisfy hunger, and those who were
prostrated by dysentery, although they ate it ravenously, suffered
much in consequence afterwards.
“The number of the sick rapidly increased, and not a few died
from exhaustion; and really those seemed happiest who were thus
taken from the horrors which surrounded them. Had it not been for
the intense frost, we should all probably have fallen victims to the
intolerable atmosphere of the camp. I would not even allow my mind
to recall some of the scenes which I witnessed at that time: scenes,

the disgusting and filthy horrors of which no decent words could
describe. When you consider the frightful condition in which we
were, the hunger and cold which we endured, you may perhaps be
able in a small degree to conjecture—as far as a person can
conjecture who has not himself suffered such things—what we then
passed through. I saw poor miserable creatures, utterly worn out,
dying in the arms of other forlorn and hopeless creatures as
wretched as themselves; I saw strong and honest, honourable men,
or who had once been such, begging of the captain for the
miserable scraps which had been saved for the sick and the helpless
children; I saw poor heart-broken mothers freezing to death, but
clasping as they died, in an agony of loving woe, the torn and
wretched remnants of clothing which they still retained, around the
emaciated forms of their innocent babes—the mother-instinct strong
in death; and sometimes at night when, all unbidden, I see again in
dreams the awful sufferings of those poor God-forsaken wretches, I
start in horror and pray the Almighty rather to blot out from my
mind the memory of all the past, than to let me ever recollect, if but
in fancy, that fearful time.
“The third day came, and still no relief. There are mysterious
powers of endurance in human nature, weak as we often deem it,
but there is a point beyond which the bow, however flexible, will not
bend. It was evident that if no help arrived speedily, the end was not
far off.
“The sun was sinking behind the distant western hills, in all the
glory of the clear frosty atmosphere of the desert, and many who
gazed upon its beauty did so with a mournful interest, believing that
they would never again behold the light of day. But at that moment
some who were anxiously watching with a last hope—watching for
what they hardly dared expect to see—raised a shout of joy. We
knew what it was! Men, women, and children rushed from their
tents to welcome the approaching waggons and our friends in time
of need. Captain Willie and the other Elder had found the rescue
from Salt Lake overtaken by the storm just as we were, but he had
told them of our terrible situation, and they had hastened on without

a moment’s delay. It was he and they, convoying good supplies, who
now approached us. The poor creatures shouted wildly for joy; even
the strong men shed tears; and the sisters, overcome with the
sudden change from death to life, flung themselves into the arms of
the brethren as they came into the camp and covered them with
kisses. Such happiness you never saw—every one shaking hands
and speaking joyfully—every one saying ‘God bless you’ with a
meaning such as is seldom attached to those words.
“The supplies were to us more than food and clothing—they were
life itself. Elder John Chislett was appointed to distribute the
provisions and clothing, and everything was placed in his hands. He
gave out to us all that was immediately necessary, but strongly
cautioned us to be very moderate in what we ate, as it was
dangerous to go from the extreme of fasting to a full meal. After
supper the clothing and bedding was fairly divided, and we felt more
thankful for those little comforts than a person, who had never
endured as we had, would have felt had he become suddenly the
recipient of boundless luxury.
“Two of the Elders who had held forth such delusive hopes to the
company, not long before, as I have already told you, were with the
brethren who came to our relief. I have never ventured to ask how it
was that they could hold out to us in God’s name such promises,
when they must have known after a moment’s reflection, that they
were utterly baseless; but I think that probably they left their
comfortable homes in Salt Lake City and came across the stormy
desert with supplies to meet us, only to show practically how
anxious they were to atone for having led us astray. Next morning
Elder Grant went on east to meet the company following us, but
Elder W. H. Kimball took command of our company for the rest of
the way.
“We could now journey but very slowly, for the road was bad; the
sick and weakly were, however, able to ride, and altogether we
suffered less. To some this change for the better arrived too late—
the mental and physical sufferings which they had endured were too

much for them. Poor souls! they alone and their Father in heaven
knew what they had passed through. They seemed to have lost all
consciousness, as if their faculties had been numbed and stultified.
We talked to them of the past, but they looked at us with
unmeaning eyes, as if we spoke of something in which they had no
interest; we tried to lead their thoughts to Zion, and the promises of
the Lord; but it was all in vain. They turned from us with a look of
terrible apathy; and one or two, who partly seemed to understand,
only replied with an indifference painful to witness—‘Too late, too
late!’
“As we journeyed, the weather every day grew colder. Many of the
unfortunate people lost their fingers and toes, others their ears; one
poor woman lost her sight, and I was told of a poor sick man who
held on to the waggon-bars to save himself from jolting, and had all
his fingers frozen off. Few, if any, of the people recovered from the
effects of that frost. One morning they found a poor old man who
had vainly tried the evening before to keep up with the rest. His
corpse was not far from the camp, but it had been sadly mangled by
the wolves. Then there came another snow-storm, only worse in
proportion as the weather was colder, and it was with the utmost
difficulty that we could be kept from freezing. We wrapped blankets
and anything else we could get around us, but the cold wind
penetrated to our very bones. I was told that some of the people,
even women and children, who lagged behind, were whipped so as
to make them keep up, and to keep life in them. I did not see this
myself; but I believe, if the story was true, it was an act of mercy
and not of cruelty, for to delay a moment was fatal. The captain of
our hundred more than once stayed behind the company to bury
some unfortunate person who died on the road: how he ever got up
with us again I cannot tell, but he seemed to be as indefatigable in
his labours as he was wonderfully preserved.
“Sometimes the carts came to a dead stand-still, and several had
to be fastened together and drawn by a united effort, and in more
than one instance the poor people gave up altogether;—they were
carried on, while they lived, as well as we could; but their carts were

abandoned. The stragglers came in slowly to camp the night of the
storm—the people from the Valley even went back to fetch some in
—and it was nearly six o’clock in the morning before the last arrived.
“The next day we remained in camp, for there were so many sick
and dying that we could not proceed. Early in the morning Elder
Chislett and three other Elders went round to see who was dead,
that they might be buried. They found in the tents fifteen corpses—
all stiff and frozen. Two more died during the day. A large square
hole was dug, and they were buried in it three abreast, and then
they were covered with leaves and earth, every precaution being
taken to keep them from the wolves. Few of the relatives of those
who were dead came to the burial—they did not seem to care—
death had become familiar to them, and personal misery precluded
sorrow for the dead.
“As we drew nearer to Salt Lake Valley we met more of the
brethren coming to our assistance. They supplied us with all we
needed, and then hastened on to meet those who followed us. The
atmosphere seemed to become sensibly warmer, and our sufferings
were proportionately less as we approached Zion.
“What the feelings of others might have been when they first saw
the goal of our hopes—Zion of our prayers and songs—I cannot tell.
Weary, oh so weary I felt, but thankful, more than thankful, that my
husband’s life had been spared. He was pale and sick, but he was
with us still.
“I have written too much already, Sister Stenhouse. I cannot tell
you more now, but I may as well add that when we left Iowa City
we were about five hundred in all. Some left us on the way. When
we left Florence, and began the journey across the Plains, we were
over four hundred and twenty, of which number we buried sixty-
seven—a sixth of the whole. The company which followed us, and to
which I have frequently alluded, fared worse than we. They
numbered six hundred when they started, but they buried one
hundred and fifty on the journey—one in every four. May God grant
that I may never again see such a sight as was presented by the

miserable remnant of that last company as they came on slowly
through the Cañon towards Salt Lake Valley.”

CHAPTER XVI.
WE FORSAKE ALL, AND SET OUT FOR ZION:—
OUR JOURNEY ACROSS THE PLAINS.
IT was with strange feelings of doubt and unrest that I read that
painful story; but I folded up Mary Burton’s letter and stored it
carefully away in my desk, and then I began to think.
Certainly I was still a Mormon—at least I was nothing else—but I
was not now so firmly grounded in my faith as once I was, and
these terrible stories completely unsettled my mind. Then, too, I was
well aware that, before long, my husband and myself would be
called upon to cross the Plains to Zion, and I felt that if our
experience were anything like that of Mary Burton, I and my children
would never reach Salt Lake. The prospect was not very cheering.
One morning we were surprised to receive a visit from the Apostle
George Q. Cannon, who had come to take the place of Mr.
Stenhouse as President of the Mission in the Eastern States, and we
were now to prepare to travel with the next company of emigrants.
To me this was most unpleasant intelligence. Polygamy—the
knowledge that before long I should be brought personally within its
degrading influence—had now for years been the curse of my life,
and I had welcomed every reprieve from immediate contact with it
in Utah. But the time had come at last when I was to realize my
worst apprehensions, and I think at that time, had I been permitted
to choose, I would have preferred to die rather than journey to Zion.
Besides this, ever since my husband had been engaged with the
secular papers, we had been getting along very comfortably. We had
now a pleasant home and many comforts and little luxuries which
we had not enjoyed since we left Switzerland, and I was beginning
to hope that we should be allowed to remain in New York for a few

years at least. We had also by this time six children—the youngest
only a few days old—and I leave it to any mother to determine
whether I had not good cause for vexation when I was told that we
were expected to leave New York within two weeks, with the
emigrants who were then en route from England. My husband also
was to take charge of the company, and therefore everything would
depend upon me—all the preparations for our long and perilous
journey, the disposal of our furniture, and, in fact, the thousand and
one little necessary duties which must attend the packing up and
departure of a family.
In the course of a few days the emigrants arrived, and then my
husband was compelled to devote all his time to them. When I told
the Elders that it was almost impossible for me, in the delicate state
of health in which I was, and with a babe only two weeks old, to
undertake such a journey, they told me that I had no faith in the
power of God, and that if I would arise and begin my preparations,
the Lord would give me strength according to my day. Thinking that
probably my husband believed as they did, I made the effort, but it
cost me much. In the Mormon Church the feelings or sufferings of
women are seldom considered. If an order is given to any man to
take a journey or perform any given task, his wife or wives are not
to be thought of. They are his property just as much as his horses,
mules, or oxen; and if one wife should die, it is of little consequence
if he has others, and if he has not he can easily get them; and if he
is not young or fascinating enough to win his way with the young
ladies, he has only to keep on good terms with Brigham Young, or
even with his bishop, and every difficulty will be smoothed away, and
they will be “counselled” to marry him.
It is never expected, nor would it be tolerated in any Mormon
woman, that she should exercise her own judgment in opposition to
her husband, no matter how much she might feel that he was in the
wrong: I have frequently seen intelligent women subjected to the
grossest tyranny on the part of ignorant and fanatical husbands who
were influenced by the absurd teachings of the Tabernacle. One of
the greatest Mormon writers, Orson Pratt, has said,—

“The wife should never follow her own judgment in preference to
that of her husband; for if her husband desires to do right, but errs
in judgment, the Lord will bless her in endeavouring to carry out his
counsels; for God has placed him at the head, and though he may
err in judgment, yet God will not justify the wife in disregarding his
instructions and counsels; far greater is the sin of rebellion, than the
errors which arise from the want of judgment; therefore she would
be condemned for suffering her will to rise against his. Be obedient,
and God will cause all things to work for good.”
The trouble and annoyance occasioned by leaving a comfortable
position in New York to travel to such an unknown region as Utah
was then, was not a trifle; but we hastened our preparations,
sacrificing all that we possessed in the most reckless manner, and in
due time set out.
When we reached Florence—the starting-point on the Frontiers—
we were detained on account of some mismanagement on the part
of the Church Agents, and remained for three weeks in camp. Ours
was what was called “an independent company;” by which I mean
that we were able to defray our own expenses without borrowing
from the Church: the poorer emigrants were assisted from a fund
provided for that purpose—the Perpetual Emigration Fund.
Our company was in an infinitely better position than that of those
emigrants of whose sad fate my friend Mary Burton had told me; for
our journey was made at the proper season, and, as far as was
possible under the circumstances, convenience and comfort had
been attended to. The incidents which befell us were few, and
although, of course, every one of us felt weary and worn out, we
were not called upon to pass through the miseries and sufferings
endured by the hand-cart emigrants. Looking back to our primitive
mode of travelling, it appears to me almost as if I must be making
some mistake about my own age, and that it must have been
several centuries, instead of a few years ago, since we crossed the
Plains. The ox-team and waggon, the walk on foot in the day and

the camp-life at night, have been pleasantly exchanged for the swift
travel of a few days in a Pullman palace-car.
What living contradictions we were as we crossed the Plains—
singing in a circle, night and morning, the songs of Zion and
listening to prayers and thanksgivings for having been permitted to
gather out of Babylon; and then during the day as we trudged along
in twos and threes expressing to each other all our misgivings, and
doubts, and fears, and the bitterness our thoughts against
Polygamy; while each wife, confiding in her husband’s honour and
faithfulness, solaced herself with the hope that all might yet be well.
How little sometimes do the songs of gladness reflect the real
sentiments of the heart. How often have I heard many a poor heart-
broken woman singing the chorus,—
“I never knew what joy was
Till I became a Mormon.”
I never could sing that song, for my experience had been exactly
the reverse.
It was the month of September—the beginning of our beautiful
Indian summer—when we emerged from the cañon, and caught
sight of Salt Lake City. Everything looked green and lovely, and in
spite of all my sad forebodings while crossing the Plains, I
involuntarily exclaimed, “Ah, what a glorious spot!” It looked like a
beautiful garden—another Eden—in the midst of a desert valley. We
had a glimpse of the Great Salt Lake far away in the distance,
stretching out like a placid sheet of molten silver, while everywhere
around were the lonely-looking snow-clapped mountains, encircling
us like mighty prison-walls.
It would be impossible for me to describe my feelings at that time.
Even while I was enchanted with the glorious prospect before me,
there arose again in my mind that haunting spectre of my existence
—Polygamy. I believed that this little earthly paradise would probably

be to me, and my daughters after me, a prison-house, and with a
mother’s instinct I shuddered as I thought of what they might be
destined to suffer there. Lovely as the scene was, there was a fatal
shadow overhanging it all. Then, too, there was no escape: if the
sad forebodings of my heart were realized, it would be utterly
impossible for us ever to get away. The idea of a railway being
constructed across those desert plains and rocky mountains never
for a moment entered my mind, and even had I thought it possible,
I should have supposed that it would take a lifetime to complete. No,
there was no help for me, even if it came to the worst. I felt that my
doom was sealed; and there were many women in our company
who thought just the same as I did, and who were troubled at heart
with fears as sad as mine.
My first impressions of Salt Lake City when we began life there
were anything but pleasant—we had to “rough it.” For nearly two
weeks we were obliged to remain in our waggons, as it was quite
impossible to obtain house-room. At that time each family built their
own little hut, and there were no vacant houses to let.

VIEW OF MAIN STREET, SALT LAKE CITY.
(From a Photograph.)
To face p. 148.
The weather was now growing very cold and wintry, and it was
absolutely necessary that we should have some better shelter than
the waggons afforded. One day my husband told me, when he came
home, that he had been offered a house which belonged to the
Church. It was in a very dilapidated condition, he said, but that if I
would go and look at it with him, we could then decide about taking
it. No time was to be lost, for companies of emigrants were coming
in almost daily, and if we neglected this chance we might not find
another.
When we arrived at the house I was much discouraged at seeing
the condition it was in: the window-panes were all cracked or broken
out, the floors and walls looked as if they had never known soap or
paint, and the upper rooms had no ceilings; in fact it was not fit for
any civilized Christian to live in. In point of size there was nothing to
complain of, but of comfort or convenience there was none—the
wind whistled through every door and every cracked window; and
altogether it presented anything but a cheering prospect for winter.
My husband told me that Daniel H. Wells, who was superintendent
of Church property and also one of the First Presidency of the
Church, had promised him that if we took the house it should be
repaired and made fit for living in before winter fully set in; and
under the circumstances we thought we could do no better than
accept his offer.
Thus we began housekeeping in Utah, and we unpacked our
trunks and tried to give the place as home-like an appearance as we
possibly could. I had known what it was to be in a strange country
and destitute; and, therefore, benefiting by experience, when I left
New York, regardless of the teachings of the Elders and of my own
husband’s directions to the contrary, I had secretly stowed away
many little necessaries towards housekeeping. Indeed had I not
done so, we should have been as badly off when we reached Zion as

when we arrived in New York. Besides which, I have no doubt that
our waggons would have been filled with the trunks of those very
brethren who counselled us not to take more than was absolutely
necessary. The brethren who gave this counsel were, I noticed,
constantly purchasing while they advised every one else to sell, and
I thought it wiser to follow their example than their precepts.
Among my treasures was some carpet, and when that was laid
down and the stove put up we began to feel almost at home. The
wind, however, soon drove away all thoughts of comfort, for it came
whistling in through a thousand undetected crevices, and the tallow
candles which we were obliged to burn presented a woeful
spectacle. Even the most wealthy, then, had no other light but
candles, and every family had to make their own: I have often seen
people burning a little melted grease with a bit of cotton-rag stuck in
the middle for a wick—how pleasant the smell, and how brilliant the
light thus produced can be imagined. Everything was upon the same
scale—and to keep house in any fashion was really a formidable
undertaking, especially to those who had been accustomed to the
conveniences of large towns. I believe that many women consented
to their husbands taking other wives for the sake of getting some
assistance in their home duties.
We spent nearly all the first evening in our new house in trying to
discover some means of keeping out the storm, but to little purpose.
Nearly a fortnight passed before any one came to see about
repairing the house, but as it belonged to the Church my husband
seemed to think it must be all right. The Mormon men are always
very lenient towards “the Church”—very much more so than the
Mormon women, for the latter have somehow got mixed up in their
minds the idea that Brigham Young and “the Church” are
synonymous terms. I remember one day a good young sister—a
daughter of one of the twelve Apostles—saying to me, “I have just
seen the Church,” and when I asked her what she meant, she said,
“I have just met Brigham Young and Hyram Clawson, and are they
not the Church?” It was evident to me that others besides myself
sometimes gave way to wicked thoughts. Nevertheless I was still of

opinion that “the Church” had plenty of money and ought to have
repaired the house.
One day a man whom I had never seen before, called upon me
and asked what repairs I should like done. I was not feeling very
well, and had been annoyed at the delay, and I answered rather
ungraciously that I should like anything done, if it were only done at
once, for I thought we had waited long enough. He answered me
very politely, and said that he would see to it immediately. When Mr.
Stenhouse returned home in the evening, he said, “So you have had
a visit from President Wells.” “No,” I said, “there has been no one
here but a carpenter—an ugly man with a cast in his eye, and I told
him that I wanted the house fixed right away.”
“Why, that was President Wells,” he said, very much shocked, and
I think I felt as bad as he did when I realized that I had treated one
of the “First Presidency” so unceremoniously.
This Daniel H. Wells, besides being an Apostle, a Counsellor of
Brigham Young, and one of the three “Presidents” who share with
Brigham the first position in the Church, and are associated with him
in all his official acts, was Lieutenant-General of the Nauvoo Legion,
and at the present time and for some years past Mayor of Salt Lake
City. It was a shocking indiscretion, to say the least, to speak
slightingly of such a high and mighty personage.
The repairs, however, were seen to, and the house rendered a
little more habitable. We had now to begin the struggle of life
afresh, and could not afford to be too particular about trifles;—to
obtain shelter was something—for the rest we must still continue to
hope and trust.

CHAPTER XVII.
MY FIRST IMPRESSIONS OF THE CITY OF THE
SAINTS.
When I arrived in Salt Lake City, a great many improvements had
been effected; and expecting, as I did that this would be our future
home for many years, perhaps for life, I was interested in everything
that I saw.
The first Sunday I went to the Tabernacle I was greatly amused at
the way in which some of the sisters were dressed. Quite a number
wore sun-bonnets, but the majority wore curious and diverse
specimens of the milliner’s art—relics of former days. Some wore a
little tuft of gauze and feathers on the top of the head, while others
had helmets of extraordinary size. There were little bonnets, half-
grown bonnets, and “grandmother bonnets” with steeple crowns and
fronts so large that it was difficult to get a peep at the faces which
they concealed. As for the dresses, they were as diversified as the
bonnets. Some of them presented a rather curious spectacle. I
noticed two young women who sat near me: they were dressed alike
in green calico sun-bonnets, green calico skirts, and pink calico
sacks. On inquiring who they were, I was told that they were the
wives of one man, and had both been married to him on the same
day, so that neither could claim precedence of the other. Outside of
Utah such a thing would seem impossible; but so many of the young
girls at that time came out to Zion without father or mother or any
one else to guide them; and left to their own inexperience and afraid
to disobey “counsel,” it is no wonder that they soon yielded to the
universal custom.
The two young women whom I have mentioned did not appear to
me to be overburdened with intelligence; they looked like girls who

could be made to believe anything; but after that I met with two
well-educated women who, like these foolish girls, thoughtlessly
tried the experiment of two or more marrying the same man on the
same day, agreeing with their “lord” that that would be the best way
to preserve peace in their household. But they were terribly
mistaken; and even before the marriage-day was over, the poor
bewildered husband had to fly to Brother Brigham for counsel.
The Tabernacle services seemed to me as strange as the women.
There was no regular order in conducting the proceedings, but the
prominent brethren made prayers or “sermons” as they were called
upon to do so. The “sermons” would be more properly called
speeches; they are nothing but a rambling, disconnected glorification
of the Saints, interspersed with fearful denunciations of the Gentiles,
and not unfrequently a good sprinkling of words and expressions
such as are never used in decent society. More unedifying discourses
could hardly be imagined. As for the spirituality and devotional
feeling which characterized our meetings in England, they were only
conspicuous by their absence, and many devout Saints have told me
that when they first went there, before the erection of the great
organ, the free-and-easy manners of the speakers and the brass
band which was stationed in front of the platform, made them feel
as if they had come to witness a puppet-show rather than to attend
a religious meeting.
There was one lady at the Tabernacle service whom I regarded
with considerable interest. This was no other than Eliza R. Snow, one
of the Prophet’s wives. I was told that she was the first woman
married in Polygamy after Joseph Smith received the Revelation, and
I believed it was so. People who lived in Nauvoo, respectable people,
and not one or two either, have assured me that for four years
before Joseph is said to have received the Revelation, he was
practising Polygamy, or something worse, and that the Revelation
was given to justify what was already done. However this might be,
it is generally understood that Miss Eliza Snow was the first plural
wife of the Prophet. Her principal occupation at the present time is
converting rebellious wives to obedience to their husbands, and

convincing young girls that it is their duty to enter into Polygamy.
Unhappy husbands derive great consolation from her counsels. In
matters of religion she is a perfect fanatic, and in connexion with the
Female Relief Society she reigns supreme; but otherwise there are
many excellent traits in her character, and I could tell of many acts
of loving-kindness and self-denial which she has performed, and
which will surely have their reward. As the chief poet of the Mormon
Church, and as the Representative of Eve in the mysteries of the
Endowment House, she enjoys a reputation such as would be
impossible to any other woman among the Saints.
Another of the late Joseph’s wives is a Mrs. Doctor Jacobs, who
was actually married to the Prophet while she was still living with her
original husband, Jacobs. Under the same circumstances she
married Brigham Young, after Joseph’s death. For some time her
husband knew nothing of the whole affair, but Brigham very soon
gave him to understand that his company was not wanted. The
sister of Mrs. Jacobs—a Mrs. Buel—was another of Joseph’s wives,
and she married the Apostle Heber C. Kimball, but does not appear
to have made a very good bargain.
Besides these there is another lady, a Mrs. Shearer—or, as she is
familiarly called—“Aunty Shearer.” She is in every respect a unique
specimen of womanhood, tall and angular, with cold yet eager grey
eyes; a woman of great volubility, and altogether grim-looking and
strong-minded. She was an early disciple, and is said to have
sacrificed everything for Mormonism. She lived in Joseph Smith’s
family, and, of course, saw and heard a great deal about Polygamy,
and at first it was a great stumbling-block to her. She was, however,
instructed by the immaculate Joseph, and so far managed to
overcome her feelings as to be married to him for eternity. Like the
others, she is called “Mrs.,” and I suppose there is a Mr. Shearer
somewhere, but upon that point she is very reticent. Her little lonely
hut is fitted with innumerable curiosities and little knick-knacks,
which some people are for ever hoarding away in the belief that they
will come into use some day. She is a woman that one could not
easily forget. She wears a muslin cap with a very wide border

flapping in the wind under a comical-looking hood, and is easily
recognized by her old yellow marten-fur cape and enormous muff:
her dress, which is of her own spinning and weaving, is but just
wide enough, and its length could never inconvenience her. Add to
these personal ornaments a stout pair of brogues, and you will see
before you “Aunty Shearer,” one of the Prophet’s spiritual wives.
I may as well explain what is meant by “spiritual” wives and
“proxy” wives.
Marriages contracted by the Gentiles, or by Mormons in
accordance with Gentile institutions, are not considered binding by
the Saints. That was partly the cause of my indignation and the
indignation of many another wife and mother. We were told that we
had never been married at all, and that our husbands and our
children were not lawfully ours: surely that was enough to excite the
indignation of any wife, whatever her faith might be. For a marriage
to be valid it must be solemnized in the Endowment House in Salt
Lake City, or the persons contracting it can never expect to be
husband and wife in eternity. Should the husband die before he
reaches Zion, and if the wife loves him sufficiently well to wish to be
his in eternity—when she arrives in Salt Lake City, if she receives an
offer of marriage from one of the brethren, and does not object to
him as a second husband in this world, she will make an agreement
with him that she will be his wife, for time, but that in eternity she
and all her children shall be handed over to the first husband. A
woman thus married is called a “proxy” wife.
Now “spiritual” wives are of two classes. The one consists of old
ladies who have plenty of money or property which of course needs
looking after; and generous Elders marry them, and accordingly
“look after” the said property, and the owner of it becomes the
Elder’s spiritual wife. She will only be his real wife in eternity when
she is rejuvenated.
The other kind of “spiritual” wife is one who is married already,
but who does not think that her husband can “exalt” her to so high a
position in the celestial world as she deserves—perhaps some kind

brother who takes a great interest in her welfare has told her so—
she then is secretly “sealed” to one of the brethren who is better
able to exalt her—perhaps to this same brother; and in the
resurrection she will pass from him who was her husband on earth
to him who is to be her husband in heaven—if she has not done so
before.
This is what is meant by “proxy” and “spiritual” wives. I think it
will be evident even to the dullest comprehension that under such a
system, “the world, the flesh, and the devil” are far more likely to
play a prominent part than anything heavenly or spiritual.
All this is so repugnant to the instincts and feelings of a true
woman, that I feel quite ashamed to write about it. And yet the
working out of this system has produced results which would be
perfectly grotesque were it not that they outrage every ordinary
sense of propriety. Let me give an example. One of the wives of
Brigham Young—Mrs. Augustus Cobb Young—a highly educated and
intelligent Boston lady with whom I am intimately acquainted,
requested of her Prophet husband a favour of a most extraordinary
description. She had forsaken her lawful husband and family and a
happy and luxurious home to join the Saints, under the impression
that Brigham Young would make her his queen in heaven. She was a
handsome woman—a woman of many gifts and graces—and
Brigham thoroughly appreciated her; but she made a slight
miscalculation in respect to the Prophet. He cares little enough for
his first wife, poor lady, and few people who know him doubt for a
moment that he would un-queen her and cut her adrift for time and
eternity too, if his avaricious soul saw the slightest prospect of gain
by doing so; he did not care for her, but he never would allow
himself to be dictated to by any woman. So when the lady of whom
I speak asked him to place her at the head of his household, he
refused: she begged hard, but he would not relent. Then finding
that she could not be Brigham’s “queen,” and having been taught by
the highest Mormon authorities that our Saviour had, and has, many
wives, she requested to be “sealed to Him!” Brigham Young told her
(for what reason I do not know) that it really was out of his power

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