By 1745, its paper money was inconvertible to specie, but acceptance was mandated by the government.
The real bills doctrine asserts that it is an illusion that any physically inconvertible currency is necessarily also unbacked.
One result is this: the changing pattern of trade has led the rest of the world to accumulate vast balances of more or less inconvertible dollars.
The dollar, a previous anchor for comparison of values, is now made inconvertible.
We cannot afford for the present to use them to pay off old debts or to accumulate inconvertible foreign currency.
I think that shows it is possible to have an inconvertible currency which is generally acceptable.
To-day we have not only a paper currency but an inconvertible paper currency.
As previously stated, the public had developed a long cumulative experience on monetary affairs with expectations about inconvertible paper currency that proved to be accurate and prompt.
