The Bag o' Cash is an item rewarded for completing quests and earning Mayor Merits.
It can be used straight from the Player's inventory to collect 
100 or sold for the same price at Moss' Store.
It can also be found while digging holes, after completing the second mayor merit in the 1st line of the 4th tab (10 Treasure Fished Up, 50 items Sold to Moss & 50 Holes Dug), or as a reward in a Treasure Chest while fishing.