Elliptical polarization measures of the interacting binary star V367 C
yg were obtained. A two-component model for the circumbinary environme
nt has been constructed. The variable linear polarization component (a
pproximately 1% peak-to-peak) arises from an electron envelope between
the stars. Surrounding the entire system there is an extensive ring o
f material consisting of neutral hydrogen and dust which produces the
constant linear polarization component (approximately 7%). The variabl
e circular polarization is probably produced by the circumbinary dust
as well. Problems with the removal of the interstellar polarization an
d the light dilution from a nearby star are discussed. An alternative
model of the binary based on systemic magnetic fields is discussed but
eventually discounted. Suggestions for further observations are prese
nted.