Young man mocked for his view on paper currency, foresight to know that replacing one fiat currency with another would fail. G.M. was a HODLer.
Discussion
. M. is describing an attempt by Congress to address the depreciation of the Continental currency by further devaluing Continental dollars and replacing them with what was hoped would be a well-supported new currency at the rate of one dollar for every twenty Continental dollars withdrawn from circulation.
This bill included:
Two-fifths of the new currency was to be at the disposal of Congress. The remainder would be allocated to the states that turned in the old currency.
The new currency was guaranteed by the state and Continental governments and was made legal tender by the states.
Had the option to be redeemed in 6 years, with a 5 percent interest paid annually.
As Gouverneur Morris predicted, despite all these supports, it failed to retain its value.