"This study examines the pricing of U.S. state banknotes before 1860 using data on the discounts on these notes as quoted in banknote reporters in New York, Philadelphia, Cincinnati, and Cleveland. The study attempts to determine whether these banknotes were priced consistent with their expected net redemption value--that is, as securities are. It finds that they are not. A bank's notes did have higher prices when the bank was redeeming its notes for specie than when it was not, and banknote prices generally reflected the distances necessary to travel in order to redeem the notes, with larger discounts generally required for longer distances. However, those relationships were not tight, and persistent asymmetries existed between locations"--Federal Reserve Bank of Minneapolis web site.