National Bank Note Types - National Gold Bank Notes

Prior to 1880 in the United States, the western states were 'hard money' regions, where gold and silver coins were the primary circulating medium. All paper money was suspect and heavily discounted relative to gold and silver, especially after banks and the U.S. Treasury suspended specie payments during and after the Civil War.

To help address this situation, Congress amended the National Bank Act on July 12, 1970 to allow for the creation of National Gold Banks, which would issue notes that were fully redeemable at par into gold or silver coin at any National Gold Bank. The costs to the bank for this issue privilege were substantial compared to regular National Banks which were only obligated to redeem their notes at par in 'lawful money' (specifically U.S. Demand notes). Due to these higher costs of operation, and limited opportunities, only ten National Gold Banks were ever chartered, nine in California, and one (briefly) in Boston, MA. (The Kidder National Gold Bank of Boston was chartered Aug 15, 1870 and liquidated Nov 8, 1872, never having issued any Gold Bank Notes).

As public confidence in U.S. paper money gradually increased over the next several years, the viability of the National Gold Banks decreased. On January 14, 1875 Congress passed an act that required the resumption of specie payments on January 1, 1879. As a result, on that date, all legal tender notes became fully convertible into gold or silver coin, and all classes of currency circulated at par.

With the resumption of specie payments, the end was in sight for the National Gold Banks, and two of the nine remaining National Gold Banks liquidated in 1879. In 1880, Congress passed legislation allowing National Gold Banks to convert to (more profitable) regular National Banks, and the remaining seven National Gold Banks took advantage of this option, with the last one converting on Apr 17, 1884.

Between 1870 and 1883, the National Gold Bank Notes were issued using the Original Series and Series 1875 designs, with 'Redeemable in Gold Coin' printed along the top of the note face. They were printed on yellow/gold paper, and issued in denominations of $5, $10, $20, $50, $100, $500 and $1000 (No $500 notes are known to have survived, and no $1000 notes ever reached circulation).

Following are images of the back of a Gold Bank Note, as well as a note for each of the 5 known denominations issued:

$5 Gold Bank Note issued by National Gold Bank of D.O. Mills of Sacramento, CA. Courtesy of Heritage Auctions, HA.com

$10 Gold Bank Note issued by First National Gold Bank of Petaluma, CA. Courtesy of Heritage Auctions, HA.com

$20 Gold Bank Note issued by First National Gold Bank of Stockton, CA. Courtesy of Heritage Auctions, HA.com

$50 Gold Bank Note issued by Farmers National Gold Bank of San Jose, CA. Courtesy of Heritage Auctions, HA.com

$100 Gold Bank Note issued by Union National Gold Bank of Oakland, CA. Courtesy of Heritage Auctions, HA.com

Return to An Overview of National Bank Note Types issued 1863-1935

References

• Peter Huntoon, United States Large Size National Bank Notes (Laramie, WY: The Society of Paper Money Collectors, 1995).
• Don C. Kelly, National Bank Notes, A Guide with Prices. 6th Edition (Oxford, OH: The Paper Money Institute, 2008).
• Dean Oakes and John Hickman, Standard Catalog of National Bank Notes. 2nd Edition (Iola, WI: Krause Publications, 1990).
• The National Bank Note Census, nbncensus.com
• Heritage Auction Archives, currency.ha.com