For the first 25 years of Indiana’s existence, its state banks were allowed to operate free of federal oversight. During this period, a number of irresponsible or downright unscrupulous state banks allowed inflation to run amok by issuing too many banknotes and approving numerous questionable loans. This brand of “wildcat banking,” and the mistrust it breeded, opened the door to the establishment of several note-issuing private banks in the city of Terre Haute.

Among the most popular and successful of these private banks was established in 1839 by Circuit Judge John H. Watson. Judge Watson’s bank, and the “Watson’s notes” it issued, quickly gained a reputation for being sound in credit and honest in value. In fact, a number of Terre Haute residents preferred payment in Watson’s notes rather than federal currency.

Before his death in 1861, Mr. Watson left a will providing for the redemption of all outstanding notes — an act few banks of the area were willing to make under any circumstance. This task was left to his young banking partner and successor, Patrick Shannon. Patrick Shannon, a 31-year-old Irishman, continued to operate the private bank under the title “Shannon’s Bank” for nearly 25 years.

As is usually the case for bankers, not everyone viewed Mr. Shannon as a friend … especially those on the wrong end of a foreclosure. It’s safe to say that the author of this small blurb in the “personal” column of the Terre Haute Express (dated Thursday, Feb. 3, 1881) had little respect for Mr. Shannon.

Paris Gazette: Terre Haute experienced what the citizens supposed a slight shock of an earthquake last week. It was afterwards ascertained that the cause of the “vibration” was occasioned by Pat Shannon falling on a slippery sidewalk.

Patrick Shannon died on April 8, 1886, at the age of 57. His bank closed not long afterward on Jan. 19, 1887 with $39,000 in liabilities, and $10,000 in assets.

This week’s “Historical Treasure” is an authentic banknote issued by Shannon’s Bank of Terre Haute. If you are so inclined, make a trip through Terre Haute’s Farrington’s Grove Historic District to see Patrick Shannon’s home at 823 S. Fifth St. While you’re in the neighborhood, stop by the museum at 1411 S. Sixth St. to learn more about the heritage of your community.

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