Spoo that indent in the bottom makes me think it is more of a banner or pennant and not a flag to be flown. Reminds me of something that would go in a federal building or line the streets for a parade. Something along those lines. That could also explain the odd star configuration. Unfortunately, it makes dating it difficult.
agree its a banner. it is OLD.
US 13 Star Shaw ? http://www.crwflags.com/fotw/flags/us-shaw.html
shaw stars seem to be 8 pointed though, no?