One of the most noted and far-reaching laws enacted by the legislature of 1853 was the adoption of what was known as the free banking law. Under its provisions, any person or persons depositing with the secretary of state bonds of any state in the union, were authorized to issue currency for an equal amount. The object of many of the founders of banks under this law was to establish them as far away from the lines of travel as possible and put the money into circulation at points far distant from the banks of issue. As Morocco was then forty miles from the nearest railroad, and the intervening country was very sparsely settled, Morocco made a very desirable point for the establishment of such a bank.
The first intimation to the citizens of Morocco that the Bank of America had been established came in 1854. I had been to Cincinnati on a visit, and while there saw some of the money in circulation. Shortly after my return from Cincinnati, in company with John Murphy, I went to Rensselaer on business in connection with the new post-office, of which I had been appointed postmaster. Shortly after our arrival in Rensselaer we were called into the office of George W. Spitler, who informed us of the fact that a bank had been established in Morocco and told us of some of the advantages that would accrue to the country by reason of the same — that our school funds would be increased and the county developed by inducing persons to locate in that vicinity, also that within a short time some of the officers of the bank would be among us and erect a bank building and take charge of the business in general. In the meantime, before these things could be attended to, he requested Mr. Murphy to take home with him one thousand dollars in gold to redeem any bills that might be presented before the regular officers arrived to take charge of things. Mr. Murphy said that was more money than he wanted to be responsible for, but finally he consented to take one hundred dollars for the purpose named.
As time passed, Mr. Murphy redeemed what few bills were presented, until the amount brought from Rensselaer was exhausted, and still no one put in an appearance to establish the bank. But, having entire confidence in the stability of the bank, he redeemed other notes until he had paid another hundred dollars out of his own money. Then he sent David Pulver to Rensselaer with a request for some one to come down and attend to the business or else send more money. On arriving at Rensselaer, Mr. Pulver was informed that the bank had changed owners and there was no one there authorized to speak for the further action of the institution. There was no clue to the proprietors and Mr. Murphy had two hundred dollars of the paper of the Bank of America on his hands, without any assurance that he would ever realize anything for his money expended. It is safe to say he did no further banking business, but when the affairs of the bank were eventually wound up by the secretary of state he made a reasonable salary besides the return of his money, as the issue of the bank, amounting to about seventy-five thousand dollars, was redeemed at eighty cents on the dollar. No one ever appeared to make settlement with Mr. Murphy, nor is it known that there was ever any person in the town of Morocco that had any right of ownership in the same. I was not president of the bank, although there is an outstanding joke to that effect.
This is not an exceptional case, for the state was full of banks that had but little, if any, better foundation on which to rest. This was almost a fair example of the condition of the finances of the state under what was known as the wildcat banking system.
It is impossible for us today to realize the difficulties of doing business under that system. Whenever a bill was offered, you had to get the latest Bank Note Reporter and find the quotation. It might be worthless or show any shade of discount. When one crossed the state line no one in another state would accept his local currency.
To illustrate, I had a note for fifty dollars, due in six months without interest. One of my neighbors bought it, taking the note at its face, and discounted his money ten per cent.
A great many stories are told of the bank at Morocco. Many have but little foundation in truth, but the following, I have every reason to believe, is an actual fact. During the time the bank was supposed to be in operation, the town of Bradford (now Monon) was the railway station nearest to Rensselaer. The railroad line extended north to Michigan City. A stage coach from Rensselaer met the north-bound afternoon train at Bradford and then returned to Rensselaer, so that most of the return trip through a very lonesome region had to be made after night.
One afternoon five men got off the train at Bradford, made their way to the hotel and called for supper. Two of them were attorneys from Lafayette going over to Rensselaer to attend to some legal matters. Two of the others were citizens from Rensselaer — one an attorney and the other a doctor. These four were well known to each other, in fact old acquaintances. Also, all of them were well known to me. The other was a stranger, and although he ate supper at the same table, he seemed to keep as far away from the others as possible. It was noticed that he kept a small satchel on his lap all the time while eating supper, This, and a few remarks he made to the landlord in regard to the location of Morocco and the manner of getting there, satisfied one of the party at least that the stranger’s objective point was the Bank of America at Morocco. He communicated his suspicions to the rest of the company. After supper the hack drove up and all got in. After a few miles had been traveled, by a pre-concerted arrangement, the two Lafayette gentlemen commenced an attack on the two citizens of Rensselaer for the bold and terrible system of outlawry allowed to exist in their county, especially in the neighborhood of Morocco. They cited many cases of murder and horse-stealing and called attention to the gang of counterfeiters said to exist in that neighborhood. The Rensselaer gentlemen defended themselves as best they could from these charges, claiming that they were no more responsible for violations of law in their county than the gentlemen from Lafayette were for crimes committed in Tippecanoe county. These charges and counter-charges were kept up until late at night, when Rensselaer was reached and all went to bed.
Early the next morning the livery-stable keeper was posted by one of the passengers of the night before, so when he was approached by our friend with the black satchel, he refused to take him to Morocco for less than thirty dollars, and asked for a guard of four men. He told the stranger that he (the stranger) would be held responsible for all loss or damage to team and wagon. About this time one of the fellow passengers of the night before called the stranger aside and told him he supposed his business at Morocco must be of the greatest importance, and, as a friend, he would advise him how to go there. In the first place, it would never do for him to go there in the clothes he had on, for he would he almost certain to be murdered. He proposed letting the stranger have an old suit of clothes and a rifle, so that, in the disguise of a hunter, he might make his way on foot to Morocco and back, with at least some prospect of safety. Our friend thanked him for his kindness, went back to the hotel, and in a short time the hack for Bradford drove up and he secured passage for that point. And the bank at Morocco was thereby saved at least one demand for specie.