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Title:Putting Legal Restrictions Theory to the Test: An Arkansan Experiment, 1861-1863 PDF Logo
Authors:Weidenmier, Marc D.
Burdekin, Richard C. K.
Issue Date:2003
Series/Report no.:Working paper series / Claremont McKenna College 03,04 [rev.]
Abstract:During the Civil War the Arkansas legislature funded their expenditures primarily through interest-bearing warrants and war bonds. After these issues were made legal tender in November 1861, the discount attributed to them disappeared immediately and they began to circulate widely. By mid- 1862 they appeared to be preferred to Confederate notes – which were also made legal tender in November 1861 but required military intervention to support their acceptance. The widespread circulation and potential dominance of legal tender interest-bearing currency is consistent with legal restrictions theory. Confederate notes supplanted the Arkansas issues only after the legislature suspended interest payments in November 1862.
Subjects:Legal restrictions
interest-bearing currency
civil war
JEL:N21
E42
Document Type:Working Paper
Appears in Collections:Claremont Colleges Working Papers in Economics, Department of Economics, Claremont McKenna College

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