To be sure it's a Knick 5E, you need to supply the serial number found on the tang of the trigger guard.
Not to take the wind out of your sails, but Grade 5E Knicks didn't cost $500 in the 1920's. Their MSRP was $175, and left the factory to sellers at roughly $120. Grade 7Es during that time frame sold for a MSRP of $350.
To appreciate this however (and supporting your point that they were very expensive guns at the time) consider this: at that same time you could walk into a Ford dealership and buy a brand new Model A for a little over $400. So, spending almost half the price of a brand new car on a 5E trap gun was a very big deal. Spending almost the entire price of a new car on a Grade 7E was an even bigger deal.
Let us know the serial number & we can nail down the date of manufacture for you.
ithaca1, If it is an inexpensive fix you should get it fixed and then try to sell it. You are asking top dollar for a 5e Flues gun. For that kind of price I would be looking for a lot more case coloring and the finish on your stock is terrible. I am not trying to be criticle but you need a good honest opinion on this gun. I collect Ithaca's and am a student in the study of them. jmho Bill