Creator: Weber, Warren E. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 344 Abstract:
This study examines the pricing of U.S. state banknotes before 1860 using discount data from New York, Philadelphia, Cincinnati, and Cleveland. The study determines whether these banknotes were priced consistent with their expected net redemption value as securities are. The evidence is mixed. Prices for a bank’s notes were higher when the bank was redeeming its notes for specie than when it was not, and banknote prices generally reflected the costs of note redemption. However, the relationship between prices and redemption costs was not tight, and there were cases in which the notes of distant banks went at par.
Stichwort: State Banks, Currency, and Bank Notes Fach: E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems and N21 - Economic History: Financial Markets and Institutions: U.S.; Canada: Pre-1913