The Bank of South Bend — the free bank

1850s – 1857

Free banking: Between the state banks and the national banks, Indiana tried free banking: under the general banking law of 1852, any association that deposited bonds with the state auditor could open a bank and issue notes. South Bend had one — an institution about which the surviving record is thin, and it is printed at the size the record supports. The Bank of South Bend appears in the register of free banks printed in The Bankers' Magazine in 1855, with a listed figure of $350,000. Its notes circulated, and like most free-bank paper they circulated at a discount: Indiana newspapers quoting note prices in 1855 valued Bank of South Bend notes at ten cents off in May of that year, and the bank's paper stood in the 93-cent class in October 1855 and the 87-cent class in quotations carried by the Wabash Courier.

Suspension and closure: The Federal Reserve–derived record of nineteenth-century bank suspensions carries the bank twice: it suspended on 10 January 1855 and reopened, and it suspended again on 9 July 1857 — the summer the panic of 1857 was building — and that suspension ended in closure. Who organized the Bank of South Bend, and in what year between 1852 and 1855 it opened, the sources reached for this section do not say; the gap is named rather than filled. It is the only one of South Bend's antebellum banks to have failed.

Sources:

1. The Bankers' Magazine, vol. 9 (1855), register of Indiana free banks — "Bank of South Bend, South Bend — 350,000."
2. Indiana newspaper note-quotations of 1855, recovered through Hoosier State Chronicles — the Terre Haute papers' discount quotations of May and October 1855 and the Wabash Courier's 87-cent quotation.
3. The bank-suspension database derived from Federal Reserve historical data — suspension 10 January 1855 with reopening; suspension 9 July 1857 with closure.