Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94603
Authors: 
Burdekin, Richard C.K.
Weidenmier, Marc D.
Year of Publication: 
1999
Series/Report no.: 
Claremont Colleges Working Papers in Economics 1999-14
Abstract: 
Instances of interest-bearing currency are relatively rare. The Southern Confederacy issued both interest and non-interest-bearing notes during the Civil War. The two types of notes apparently circulated alongside one another with the interest-bearing currency generally commanding the premium implied by legal restrictions theory. Government-imposed restrictions on banks prevented the non-interest-bearing notes from being driven out of circulation. The Southern experience appears to be consistent with the legal restrictions theory of money and suggests a potential role for interest-bearing currency as a circulating medium.
Document Type: 
Working Paper

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