So I was reading an article by Nick Szabo called "Shelling Out"
And in his introduction paragraph he explains how American Indians use bones and shells as a currency called "wampum".
This currency was accepted as legal tender in New England between 1637 and 1661. While the Colonies still accepted coin from the British.
He points out that :
The beginning of the end of wampum came when the British started shipping more coin to the Americas, and Europeans started applying their mass-manufacturing techniques.
By 1661, British authorities had thrown in the towel, and decided it would pay in coin of the realm – which being real gold and silver, and its minting audited and branded by the Crown, had even better monetary qualities than shells. In that year wampum ceased to be legal tender in New England.
Now I'm pretty new to economics but I thought Gresham's Law meant that people will not spend valuable assets such as gold or silver instead they will spend less valuable currency for fear of it depreciating.
So did wampum cease to be legal tender because the government "said so" and if so, why would they make this decision?