Interest-Bearing Currency: Evidence from the Civil War Experience.

The article presents commentary and extensions on the article "Interest-Bearing Currency: Evidence from the Civil War Experience," by James Gherity published in the February 193 issue, discussing economic conditions during the American Civil War which have large implications against the legal restrictions theory of money demand. The author challenges Gherity's assertion that transaction costs could be eliminated through the use of interest-bearing notes. Research revisions of the selected data set are also provided, and alternative explanations are offered for the monetary behavior.