Banner City was founded in August 1870 by Louis B. Redman, east of Julian, serving several gold mines in the surrounding hills in the Julian Banner Mining District. It had a hotel, two stores, three saloons, and stamping mills. The greatest period of mining activity was from 1870 to 1880. Banner post office operated from July 29, 1873 to November 24, 1876, Dec 5, 1876 to Oct 31, 1877 and from 25 Apr 1883 to Dec 28, 1906 when it was moved to Julian. Unlike its rival, Julian, the town suffered from floods in 1874, 1916, and 1926. In the 1930s it suffered a fire leaving little trace of the old town.