From the Super Mario Wiki
The Laurel Wreath is an item in the SNES and PC releases of Mario's Time Machine. In ancient Greece, laurels were commonly given to those who had achieved athletic or artistic achievements. After Mario travels back in time to ancient Athens to return Plato's Republic, which was stolen by Bowser, he receives a laurel wreath from an enslaved woman. Mario comments on how it is unjust that she is kept as a slave, and the woman recognizes that he is wise, giving him the wreath as proof of his wisdom. Mario can then give the wreath to a nearby comedic writer who refuses to talk unless he receives recognition from the Academy for his writings. Once he receives the wreath, he believes that Mario likes him very much, and gives him a Measuring Stick in exchange.