My morale does not go down or disappear in a Tavern or after resting in an inn like it did at the start of the game. now it only increases and my party died fighting low level garbage

Each character has to have money then go to the tavern to get rid of morale.. Now if you want to fight in town you are good go kill away, but if you want to go outside of town you have to rest in the Inn which will put the game to dawn also each character has to have money you want a comfortable room not the stables.

I checked the manual online, but it is not specific for the amount of money needed to reduce morale loss. I don't recall the coin costs for resting and reducing morale to be that much. IIRC, it may be around 40 copper to rest one night in the Inn and perhaps the same amount per point of morale loss.

Easy ways to get money are small items(lockpicks, cloaks, unenchanted rings, unenchanted bracelets, and silver treasures). Unless you improve Haggle immediately, the initial prices are going to be low for sales until Haggle gets to around 150 or more. Search may have a small impact on how many coins you find on enemies defeated. If you ever use the training grounds, the formula per skill point increase is the experience cost of the skill multiplied by its current value. So if you want to improve Bow from 50 to 51, it would be 255 copper. Beware that using the training grounds takes time and it only improves a skill by one point(up to 100).

Once you clear out the town of enough enemies, you'll get two gold pieces per character. Depending on how quickly you improve your skills you may get the reward after the first few days of the game.

I have the same issue with Morale loss. No matter what I do it will not go down. Morale loss is supposed to be zeroed by visiting a tavern.

Edit:
It appears that morale loss is caused by damage to the party. My initial group did not have enough money so I could not remove the morale loss befor it become critical.

IRC,
It costs 1 silver (10 copper) to remove 1 morale loss at a tavern. It will remove all that you have money for. Also, you will remove 1 morale loss for staying a at the inn, which has other benefits. However, this costs 4 silver, else you grt no benefit other than moving time to dawn.