There was always a group of men who were pushing for Federal chartering of banks and they never missed a chance to try to discredit the State chartered "wildcat" banks. Despite their accusations most banks handled their money quite well. Most kept the 20% or so gold reserves as recommended by Thomas Paine. The banks all issued their own notes on their own engraved plates. There were a multitude of different designs, sizes and denominations. Most banks circulated their notes in their immediate area and would fully redeem them at any time.

Of course, there were those few banks that over printed notes and circulated them at a distance on purposed where redemption would be difficult. The further the bank note traveled from the issuing bank the more it was discounted. Publications called "reporters" or "detectors" were printed listing descriptions of notes from failed banks or even descriptions of counterfeit notes for the benefit of merchants and bankers who were asked to accept out of town notes unfamiliar to them. The more obscure the issuing bank and the further away it was the more the note was discounted. Only the notes from the great Citizen's Bank of Louisiana in New Orleans were accepted at full value anywhere in the country. The Citizen's Bank of Louisiana issued, among others, the famous ten-dollar notes printed in English on one side and French on the other. These ten dollar notes in French had a prominent "DIX" for ten on one side and were know as dixes. New Orleans and the surrounding area became know as dixes-land. The first verse of Dixie was originally, "I wish I was in the land of dixes".

Whenever merchants had several unfamiliar notes they went to a "shaver" who purchased the notes at a discount, loaded them in a carpetbag and traveled to the bank for full redemption. I recently read a story about a shaver and the Bank of Morocco.

It seems that a certain banker had obtained several bank charters from the Indiana State Legislature. He developed a list of obscure towns that had been recently platted in remote county courthouses and set up banks in each of them. One such town that nobody had ever heard of was Morocco, Indiana where he set up one of his banks. A certain shaver received $1000 issued from the Bank of Morocco and set about to redeem them. He visited the State auditor's office and they could only tell him that the Town of Morocco was in Newton County. He traveled by train, stagecoach and rented horse. At dark he finally happened onto a small settlement in Newton County that only contained a few cabins and a blacksmith shop. The shaver asked for directions to Morocco and was informed by the smithy that he was there. The shaver asked for directions to the bank and the blacksmith became defensive. Finally after much verbal fencing it was determined that the blacksmith was the banker but that the bank was closed for the day and would not reopen until the next morning. The shaver ate dinner with the blacksmith and his family but had to spend the night on the open plain to await the bank opening the next morning. The next morning the blacksmith led him to a small cabin and they went inside. The shaver was then told they were inside the Bank of Morocco and to state his business. The shaver then pulled out the $1,000 worth of bank notes and asked for redemption in gold. The blacksmith carefully counted out the notes and then went over to a potato barrel and carefully removed the potatoes and put them in a basket. From the bottom of the "vault" he pulled up a bag labeled $5,000 and then counted out fifty gold double eagles. Afterwards he placed the notes in the bag along with the remaining gold and carefully placed it back in the barrel and then placed the potatoes back on top (thus locking the vault). The shaver thanked the banker and asked if he could pay for his meal the night before. The blacksmith/banker told him that he was the only customer to ever find the bank and that if he did not reveal the location to anyone else that his meal the night before would be free.

The Bank of Morocco was never heard from again.

(Sounds sort of like our modern day junk bonds and some IPOs!)

Larry LaBorde
Comments, criticisms and corrections are welcome at Llaborde@cdswater.com or at Llaborde@silvertrading.net

Larry spends his spare time reading, sailing and raising his two almost grown children with his wife Puddy and Haley the wonder dog in Shreveport, Louisiana. When not running the family drilling business, Larry also sells gold and silver bullion coins & bars at www.silvertrading.net