Provident Loan Society - New York

Beautifully engraved RARE specimen $500 Gold Bond from the Provident Loan Society dated in 1901. This historic document was printed by Franklin-Lee Bank Note Company and has an ornate border around it with a vignette of a woman and three children. This item is over 105 years old. 40 coupons attached.








Certificate Vignette

The Provident Loan Society was created in the financial panic of 1893 when there was a minimum of social and government agencies to help the needy. Pawnbrokers, with a long history in Europe, flourished at this time in New York City, however, with unsavory reputations. Pawnbrokers required borrowers to pay scandalous rates of interest on short term loans.

A group of the City's business leaders and financiers saw an urgent need to create an alternative to unscrupulous pawnbrokers. These dignitaries were determined to establish a not-for-profit organization dedicated to providing low-interest short term loans to individuals upon pledge of personal property. The founders included such notables as:

Solomon Loeb

Alfred B. Mason

J.P. Morgan

Jacob H. Schiff

Gustav H. Schwab

Cornelius Vanderbilt

These men gave their time, talent and money to create the foundation for a very unique idea – offering short term loans for people in need. A special act of the New York State Legislature was passed in 1894 incorporating The Provident Loan Society of New York and the doors of its first office soon opened.

Today, The Provident Loan Society serves approximately 100,000 people annually in person or by mail and continues the mission of its founders. Provident provides collateral loans up to $50,000, generally upon pledge of diamond jewelry and gold jewelry, for a term of 6 months. New York State pawnbrokers require that loans be paid back in four months. The interest rate for short term loans from Provident Loan is substantially lower than the approved rate for New York State pawnbrokers.

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Gold Bonds

Bonds were Payable in Gold or Gold Coin to give the impression that they were a more secure investment. In reality, they were not more secure since there wasn't any gold set aside as collateral for these bonds.

On April 5, 1933, President Franklin D. Roosevelt signed Presidential Executive Order 6102 which invoked his authority to make it unlawful to own or hold gold coins, gold bullion, or gold certificates. The export of Gold for purposes of payment was also outlawed, except under license from the Treasury.

On January 30, 1934, the Gold Reserve Act became law which made the ownership of gold illegal except for coins of numismatic value. As a result of this law, Bonds were no longer allowed to be Payable in Gold.

About Specimens

Specimen Certificates are actual certificates that have never been issued. They were usually kept by the printers in their permanent archives as their only example of a particular certificate. Sometimes you will see a hand stamp on the certificate that says "Do not remove from file".

Specimens were also used to show prospective clients different types of certificate designs that were available. Specimen certificates are usually much scarcer than issued certificates. In fact, many times they are the only way to get a certificate for a particular company because the issued certificates were redeemed and destroyed. In a few instances, Specimen certificates we made for a company but were never used because a different design was chosen by the company.

These certificates are normally stamped "Specimen" or they have small holes spelling the word specimen. Most of the time they don't have a serial number, or they have a serial number of 00000. This is an exciting sector of the hobby that grown in popularity and realized nice appreciation in value over the past several years.