$5 1874 National GOLD BANK Note RARE VARIETY Ch.2158 SAN JOSE, CA PCGS FINE 15

$5 1874 National Bank Note Fr.1141.  Charter 2158

a rarity of the highest caliber

The national gold bank notes  of California were first issued under the act of July 12, 1870. The act allowed for nine gold banks in California and one in Boston (which never released any notes) to issue national bank notes redeemable in gold coin. The purpose was to facilitate commerce and banking  in California as gold coins were cumbersome for banking--particularly in the large quantities which had become common.  The notes were purposefully made to imitate gold bull yard and gold coins. The paper has a distinctly yellowish tone and the design of the back features United States gold coin in multiple denominations indicating to those previously unfamiliar with paper currency or hesitant to accept it, that the note was literally backed by gold. At that time, most members of the public were used to receiving hard specie payment in the form of gold coin or gold dust or silver equivalent. As such, there was a natural hesitancy to accept paper which was seemingly valueless--the central image on the back was specifically designed to allay any fears.  

The national gold bank notes circulated extensively and with little regard to preservation, leaving very few examples above Fine--regardless of the denomination. 

The rarity of the notes increases exponentially as the denomination increases. Although there are precious few five dollar national gold make notes the number extant drops precipitously when the denomination increases to the $10 level. It takes a further nose dive at the $20 denomination with only a few dozen known for all banks combined.  The 50 and $100 denominations are essentially unobtainable. A $100 national gold banknote would be a six figure item even in About Good condition. 

All national gold bank notes represent tangible links not only to the wild west and the gold rush in  California but likewise to the most formative stages of American currency. A collector should prize any example and his or her collect should add work aggressively to include and additional example, particularly if the piece offered represents either a different bank or a higher denomination.