IDEAS home Printed from https://ideas.repec.org/a/cto/journl/v22y2002i2p199-209.html
   My bibliography  Save this article

Interest-Bearing Currency and Legal Restrictions Theory:Lessons from the Southern Confederacy

Author

Listed:
  • Richard C.K.Burdekin
  • Marc D.Weidenmier

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Richard C.K.Burdekin & Marc D.Weidenmier, 2002. "Interest-Bearing Currency and Legal Restrictions Theory:Lessons from the Southern Confederacy," Cato Journal, Cato Journal, Cato Institute, vol. 22(2), pages 199-209, Fall.
  • Handle: RePEc:cto:journl:v:22:y:2002:i:2:p:199-209
    as

    Download full text from publisher

    File URL: http://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2002/11/cj22n2-2.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gherity, James A, 1993. "Interest-Bearing Currency: Evidence from the Civil War Experience: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(1), pages 125-131, February.
    2. White, Lawrence H, 1987. "Accounting for Non-interest-Bearing Currency: A Critique of the Legal Restrictions Theory of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(4), pages 448-456, November.
    3. Makinen, Gail E & Woodward, G Thomas, 1999. "Use of Interest-Bearing Currency in the Civil War: The Experience below the Mason-Dixon Line," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 31(1), pages 121-129, February.
    4. Cowen, Tyler & Kroszner, Randall, 1989. "Scottish Banking before 1845: A Model for Laissez-Faire?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(2), pages 221-231, May.
    5. Neil Wallace, 1983. "A legal restrictions theory of the demand for "money" and the role of monetary policy," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win.
    6. Richard C. K. Burdekin & Marc D. Weidenmier, 2001. "Inflation Is Always and Everywhere a Monetary Phenomenon: Richmond vs. Houston in 1864," American Economic Review, American Economic Association, vol. 91(5), pages 1621-1630, December.
    7. Richard C. K. Burdekin & Marc D. Weidenmier, 2003. "Suppressing Asset Price Inflation: The Confederate Experience, 1861--1865," Economic Inquiry, Western Economic Association International, vol. 41(3), pages 420-432, July.
    8. Gorton, Gary, 1996. "Reputation Formation in Early Bank Note Markets," Journal of Political Economy, University of Chicago Press, vol. 104(2), pages 346-397, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Andolfatto, 2005. "On the Coexistence of Money and Bonds," 2005 Meeting Papers 9, Society for Economic Dynamics.
    2. Richard C.K. Burdekin & Marc D. Weidenmier, "undated". "Circulating Interest-Bearing Currency: An Arkansan Experiment, 1861-1863," Claremont Colleges Working Papers 2003-04, Claremont Colleges.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cto:journl:v:22:y:2002:i:2:p:199-209. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Emily Ekins). General contact details of provider: http://edirc.repec.org/data/catoous.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.