The 1823 Bank Robbery That Saved Marietta

In 1814, Marietta was dreaming big.

The Susquehanna River town was caught in a fever of speculation, money, and possibility. Land prices climbed to astonishing heights. Forty-five acres sold for $58,500 (approximately $1.1 million today). Another tract, just eighteen acres divided into eighty-three lots, brought $29,650. An addition of 106 lots, along with ferry franchises and a bridge charter, commanded $110,000 (about $2 million today).

It was a boom unlike anything Lancaster County had seen.

Farms were knocked down at auction for more than $300 an acre. Town lots on the edges of Marietta sold for $2,000. Men who had owned quiet farmland suddenly saw fortunes carved from their fields. Streets and lots existed on paper before houses stood on the ground. The future seemed to be rushing toward Marietta, and everyone wanted a piece of it.

Then came the bubble burst.

The same farms that had sold for $300 an acre fell to $75 and then $60. Lots that had brought $2,000 could be had for $10. One house said to have cost $16,000, sold for $1,100. Another account claimed houses sold for less than the cost of the mortar in their walls. The dream had turned to dust.

At the center of that collapse stood the Marietta and Susquehanna Trading Company, located at 13 East Market Street.

It sounded like a trading company, but it was a bank, organized under Pennsylvania’s general Banking Act of 1814. Like many banks of the period, it issued paper notes, handled local credit, and became entangled in the fortunes of the place it served. In a town rising on speculation, a bank could help fuel the boom. In a town collapsing under debt, it could become the instrument of ruin.

By 1818, trouble was already visible.

Rumors swirled that Marietta bank notes were not sound. The Marietta Pilot, the local newspaper, insisted the bank continued to transact business as usual, “injurious reports to the contrary notwithstanding.” The reassurance did not calm everyone. A York newspaper editor mocked the idea that the notes were good, saying an editor might tell the public so, but would not accept a ten-dollar Marietta note for a year’s subscription. He added that a barber near the bank would refuse to shave a man for one of its five-dollar bills.

That was not exactly a vote of confidence.

By October 1818, the bank suspended payments. In Philadelphia, its notes traded at a discount of about thirty percent. A year later, that discount had reached sixty percent. The paper money of the Marietta and Susquehanna Trading Company still circulated, but anyone holding it knew it was worth far less than the number printed on its face.

In 1821, stockholders gathered in Lancaster and admitted what could no longer be hidden. For more than three years, the bank had been unable to redeem its paper, keep its notes at par, or pay its honest creditors. A committee was appointed to inspect the books and determine what was owed to and by the bank.

The cashier, William Child, refused to show them the records. He said the directors had strictly ordered him not to expose the committee to the bank’s statement, books, papers, or vouchers. In other words, the people trying to discover the condition of the bank were blocked from seeing the very records that could explain it.

A later statement painted a grim picture. The bank had capital stock paid in, notes in circulation, debts to other banks, unpaid dividends, and money owed to depositors. On the asset side were discounted bills, judgments, mortgages, and real estate. There was no cash listed. Much of the bank’s wealth existed in promises, paper, and land values from a collapsed boom.

The situation was worse than bad. It was dangerous.

If the bank tried to collect what it was owed, it could drag much of Marietta down with it. Many of the debts were likely tied to land purchased during the boom. When values crashed, the notes remained. Men who had bought at high prices still owed money, but the land securing those debts was worth a fraction of what everyone had imagined.

One later claim stated that every man in Marietta, except four, was insolvent.

That may have been an exaggeration, but it captures the terror of the moment. The bank was collapsing, the town was buried in debt, and any full liquidation threatened to turn a financial disaster into a community catastrophe.

Into this crisis stepped Jacob Grosh.

Grosh was not an ordinary bank trustee. He had lived several lives by the time the Marietta bank reached its breaking point. Born in East Hempfield Township in 1776, the son of John Valentin Grosh Jr. and Barbara Burt, Jacob Grosh grew up in humble circumstances. He received only three summers of schooling, all in German, before going to work full-time at age twelve. When he settled as a young man at Anderson’s Ferry, the place that became Marietta, he reportedly spoke no English. That changed after his second marriage to Margaret Gutedel, later anglicized as Gooder. Margaret did not speak German, and their household forced a transformation that reshaped his life. She taught him English, and once Grosh could move between German-speaking Marietta and the wider English-speaking world, his native intelligence, confidence, and ambition carried him far.

He became a farmer, tavern keeper, merchant, real estate promoter, soldier, legislator, and judge. In the War of 1812, he raised and commanded the Marietta Grays, mustered as the 9th Company, 2nd Regiment, Pennsylvania Volunteers, Light Infantry. Politically, he served in the Pennsylvania House of Representatives for the sessions of 1813, 1814, and 1816, then won election to the Pennsylvania Senate in 1818 and served four years there. Later, he spent nine years as a judge of the Lancaster County Court of Common Pleas. Tradition says that as a judge, even after the Fugitive Slave Act of 1850, Grosh never returned an escaped slave to bondage. His personal life was equally eventful. He married five times, outlived his first four wives, and died in 1860 at the age of eighty-four. By then, the once German-speaking boy with almost no formal education had become one of Marietta’s most forceful and complicated men.

He had also ridden Marietta’s land boom.

Grosh bought forty-eight acres in Marietta at thirteen dollars an acre, laid the tract out in building lots, and reportedly sold all of them within two months for $500 apiece. Later, he bought some back at even higher prices. He purchased a farm, built an imposing house, endorsed notes for others, and took on heavy debts of his own.

He was, in many ways, Marietta itself: ambitious, overextended, forceful, and caught in the wreckage of a dream that had grown too large.

When the bank moved toward liquidation in 1822, five trustees were selected. Four had previously served as directors or officers of the bank. The fifth was Jacob Grosh. Rumor would later place him at the center of what happened next.

On the night of August 29, 1823, according to a reward notice published soon afterward, three masked men struck the Marietta and Susquehanna Trading Company.

They allegedly seized Cashier William Child on the back porch of the banking house. Three pistols were presented to his breast to force silence. The men dragged him inside and compelled him to unlock the vault. Once inside, they removed the bank’s books, promissory notes, valuable papers, and a large quantity of bank paper.

One of the robbers reportedly held Child at gunpoint while the other two escaped with the plunder. Then the last man fled.

The villains, the notice said, were well disguised, masked, and spoke only German.

The trustees repeatedly offered a reward of $1,000 (about $32,000 today) for the apprehension and conviction of the robbers and the return of the books and papers, or $500 for the return of the records alone in the Lancaster Intelligencer newspaper. The notice was signed by Jacob Gisch, Jacob Grosh, Jacob Mishy, James Patterson Jr., and William Child.

The notice also warned the bank’s debtors to appear at the bank on September 22 to help determine the exact amount each person owed. If they failed to appear, the trustees threatened to compel their attendance at another time and place.

On paper, it was a shocking crime. In practice, it was strangely convenient.

The robbers did not simply take money. They took the records. They took the books, promissory notes, and papers that proved who owed the bank and how much. In a failed bank whose remaining value rested largely on debts, those documents were more valuable than cash. Without them, collection became far more difficult.

Almost immediately, creditors smelled something wrong.

A second notice appeared in the same newspaper issue calling creditors of the Marietta Bank to meet in Lancaster and consider what should be done about the “late apparent robbery.” That word, apparent, carried a sharp edge. The creditors were not sure the robbery had happened as described.

At their meeting, they appointed a committee to investigate the robbery and gave it power to pursue legal action against the trustees or anyone else deemed proper. The committee had little success. A later legislative inquiry reported that a committee of stockholders and creditors had been unable to obtain information from the trustees about the bank, its affairs, or its debtors.

So the fight moved to Harrisburg.

In January 1824, citizens of Lancaster County who held Marietta bank notes, certificates of debt, and stock petitioned the Pennsylvania House of Representatives. They asked for an investigation into the conduct of the trustees and the robbery of the bank.

Grosh, Child, and another trustee protested the right of the House to investigate. The protest argued that the trustees had taken proper steps to discover the robbers, including advertising a $1,000 reward in seven different newspapers.

But that answer did not reach the heart of the suspicion. The question was not simply whether the trustees had advertised for the robbers. The question was whether there had been robbers at all.

A House committee reported in March 1824. According to the testimony before it, the bank had seemed solvent enough in August 1823 to pay its debts and perhaps even make a small dividend to stockholders after final settlement. Several individuals were heavily indebted to the bank. The bank owed about $50,000 to note holders and other creditors.

Then, near the end of August, the books, notes, and every scrap of paper that could show who was indebted to the bank were removed from the banking house in Marietta.

The trustees said robbers had broken in by night. The creditors said no such robbery had ever been committed.

Then came another troubling detail. Before the loss of the books, the bank’s stock was worth perhaps four or five dollars per share, and other testimony suggested it could not even be sold for four dollars. After the books vanished and the stock had sold for $1.50 per share, the trustees accepted stock from members of their own board and other debtors at $17.50 per share as payment on debts owed to the bank.

The legislature responded by giving Lancaster’s District Court special equity powers over the bank, its trustees, debtors, creditors, stockholders, and anyone else interested in its affairs. Yet even then, little came of it for the creditors.

In 1826, twelve suits were brought by separate creditors. Nearly ten years later, in 1836, a final decree awarded one creditor, James Porter, a judgment and allowed him to pursue the company’s real estate, mortgages, and other property. But the decree also protected the trustees from personal liability.

By then, whatever could be collected was mostly gone or nearly impossible to prove. The bank’s real estate and recorded mortgages remained, but the missing books and papers had done their damage. The robbers, whoever they were, had taken the heart of the bank’s ability to collect.

No one was arrested. No one was tried. The creditors appear to have received nothing.

In 1828, the Lancaster Journal referred darkly to mysterious and wicked money transactions near Marietta and called them “the deepest and blackest stain” ever inflicted on the character of the people of Lancaster County. The target of the remark appears to have been the old bank affair, and perhaps the suspected role of Jacob Grosh.

Yet local memory did not treat the story in a simple way.

A later Marietta centennial account described “worthy burghers” conspiring to rob the Marietta bank of the evidence of local indebtedness in order to save their townsmen from ruin and their town from desolation. That does not prove what happened. It does show how some people chose to remember it.

If the robbery was real, then three masked men escaped into the night with the records of a failed bank and were never caught.

If the robbery was staged, then someone in Marietta made the bank’s most dangerous papers disappear. The act may have cheated creditors and destroyed legal claims. It may also have spared local residents from losing their farms, homes, and futures in the collapse of a speculative bubble that had already ruined them on paper.

At the center of the mystery stands Jacob Grosh.

Was he a villain who helped bury the truth to protect himself and others? Was he a desperate community defender who understood that ordinary law would finish what the land boom had started? Or was he simply a trustee caught in a story that later generations shaped around his reputation?

The records do not answer those questions cleanly. They leave us with a collapsed bank, missing books, masked men speaking German, a cashier held at gunpoint, angry creditors, a legislative inquiry, and a town that may have been saved by the disappearance of its own debts.

So what was it? A bank robbery? A cover-up? Or the night Marietta robbed a bank to save itself?

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Resources

• A mysterious bank robbery by Franics Lyman Windolph
• Lancaster Intelligencer Fri, Sep 05, 1823
• Marietta and Susquehanna Trading Company
• Marietta & Susquehanna Trading Company United States Bank of Marietta
• Judge Jacob Grosh