1841 The Lancaster Bank 5 Dollar Re-Issue Relief Banknote - 1849 Re-Issue - Pennsylvania Obsolete - 1849 Lancaster PA Five Dollar Obsolete

This listing is for the photographed 1841 (1849) Lancaster Bank Pennsylvania Re-Issue Relief Act Obsolete Banknote. Issued under the Relief Act of May 4th, 1841, a local law authorizing the circulation of low denomination relief notes by local banks. This note has a printed issue date of May 20th, 1841, which has been partially torn off on this note. This note is determined to be a "Re-Issue" from 1849, as identified by the text on the lower left end of the note. Center vignette of the Lancaster Bank building displayed at the center of the obverse of this note. Good (G) grade/condition, significant signs of circulation including folds, tears, and stains, fragile note. This is a rare note from a very interesting time in Pennsylvania history, making this a valuable find and a must have for any collection! 

The Relief Act of 1841 was passed by the Pennsylvania Congress on May 4th, 1841, despite the veto the law received from the Governor some months prior. The act was promoted to reduce the debt the state had accrued with the United States Government, preventing them from appearing as a borrower when they already had very low credit. The act authorized the Governor to borrow up to $3.1 million from local banks within the state to pay off the state's debt. Participating local banks would give a specified amount of funds to the state, after which the banks would issue small denomination relief banknotes (typically $5 and under) that would be put into local circulation. Banknote holders could then present these notes in amounts of at least $100 to the issuing bank to receive a certificate of an equal amount in state stock that could be deposited at the State Bank of Pennsylvania. These notes rapidly depreciated after they were put into circulation, which lead to the authorization of a re-issue of these name relief notes in 1849 from each back equal to their original contribution. These relief notes had no dates which they had to be deposited by, so notes were still circulated decades after the 1849 reissue. 

Obsolete bank notes are also called "broken bank notes." In the days prior to the Federal Reserve, any bank could produce currency for use by the clients and members of the community. Unfortunately, not many safeguards were taken to ensure that banks stood behind the currency they were producing and circulating. Banks, more often than not, failed and their currency was rendered worthless. As a result, most bank notes of the period did not trade at their full retail value. Oftentimes notes were worth 50 cents on the dollar because the public expected the banks to fail.

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1841 The Lancaster Bank 5 Dollar Re-Issue Relief Banknote - 1849 Re-Issue - Pennsylvania Obsolete - 1849 Lancaster PA Five Dollar Obsolete