The first of these mistakes was a measure making (January 1885) the currency inconvertible for a period of two years.
On the 31st of August of the same year a series of proposals upon the currency question was submitted to congress by the president, whose real object was to counteract the too rapid appreciation of the inconvertible paper money.
In 1878 depreciation had set in, and the inconvertible paper had by the close of 1881 grown to such an extent that it was then at a discount of 80% as compared with silver.
The country was still labouring under the curse of an inconvertible currency originatingwith the Legal Tender Act res - paperY g dncy.
President Montt then took in hand the question of a reform of the currency, the abolition of inconvertible paper money, and the re-establishment of a gold basis as the monetary standard of the republic. This reform of the currency became the keynote of the president's policy during the remainder of his term of office.