National Gold Bank Notes of California: Still a Hot Commodity Over 125 Years Later

The famous California Gold Rush was an iconic time period in United States history. Around the mid 1800s, gold prospectors from around the country swarmed “The Golden State” in hopes of striking it rich. As the population of the state exploded and supply of gold increased, banks quickly found themselves in a bit of a dilemma. With gold pouring in and out of financial institutions everyday, counting out gold coin for each customer eventually became cumbersome, inefficient, and impractical. Thankfully, Congress stepped in and passed the Act of July 12, 1870, allowing nine banks in California and one in Boston, Massachusetts, to print currency redeemable in gold coin.

Important Note: According to Paper Money Of the United States by Arthur L and Ira S. Friedberg, the lone eastern United States bank authorized to print National Gold Notes was Kidder National Gold Bank of Boston, Massachusetts. Although these notes were printed, they were never released for general circulation. All notes are said to be recalled with the exception of a $50 and $100 note remaining as the only representatives from this bank. Understandably, their value is sky high!

The National Gold Bank Notes were unique in that they were valued on par with gold, making them an extremely popular banking medium for the California populace. Unlike their Treasury Note or Coin Note cousins (redeemable in Silver OR Gold at the discretion of the Secretary of the Treasury), these notes were only redeemable in gold coin. Furthermore, the obligation on the notes themselves essentially stated that each individual gold bank was responsible for backing the note, NOT the United States government. Even though National Banks of that era were known to open and close seemingly overnight, people still trusted this unique issue of currency completely.

In fact, National Gold Bank Notes were so popular and widely circulated that it is near impossible to find one in Crisp Uncirculated condition to this day. Finding one in Very Fine condition is cause for celebration, simply because they were never stored but instead circulated quite heavily. This also means that only a tiny fraction of these notes have survived the years for collectors to enjoy. Anytime one comes up for sale at a major auction, expect a high level of interest and an even higher hammer price!

National Gold Bank Notes were issued in denominations of $5, $10, $20, $50, $100 and $500. Notes from the upper denominations are extremely rare. At present, no specimen of a $500 National Gold Bank Note is known to exist, even though there are supposedly four still outstanding. Imagine discovering one of those puppies in Grandma’s Bible! Eureka, you’re rich! The bulk of known National Gold Bank Notes are in the lower denominations, and even then, they are still very rare.

Enough of the history lesson, let’s gawk at some of these incredible rarities!

Fr. 1138 National Gold Bank Note of D.O. Mills and Company, Sacramento Serial #1 PCGS Ex. Fine 40 - Offered for sale by Jess Lipka
Fr. 1138 National Gold Bank Note of D.O. Mills and Company, Sacramento Serial #1 PCGS Ex. Fine 40 - Offered for sale by Jess Lipka (Click on image to learn more or bid)

Well it doesn’t get any better than that! This incredibly rare note has an impressive provenance, dating all the way back to the Farran Zerbe collection. It is also the finest known note from Sacramento, period! Even more astounding, it is just one of three serial number one notes known to exist across all National Gold Bank Notes. Please click the image to learn more about the note, currently listed for sale on eBay.com for $1,000,000.

Coming back down to Earth, this next example is from the First National Gold Bank of Petaluma, California, Charter 2193. It was sold at a 2006 Heritage Auction for $18,400. Example Lowell Horwedel collection, from the Jim O’Neal National Gold Bank Note Collection.

Fr. 1149 1874 $10 First National Gold Bank Note Charter 2193 Raw Very Good - 2006 Heritage Auctions
Fr. 1149 1874 $10 First National Gold Bank Note Charter 2193 Raw Very Good - 2006 Heritage Auctions - Sold for $18,400 - Ex. Lowel Horwedel, from the Jim O'Neal Collection of National Gold Bank Notes

As you can imagine, these notes aren’t for the faint of heart or light weight wallet. They are true collectors’ items with incredible value that will only increase as time presses on.

Ironically, one could argue that the California Gold Rush of the 1800s never ended: with National Gold Bank Notes in high demand and in low supply, it’s still possible to strike it rich from California Gold in the 21st Century!

Image from Heritage Auction Galleries is copyright Heritage Auction Galleries, LLC.