An Elizabethan Tale

Queen Elizabeth I(right)  ruled England in the 16th century.She succeeded her father King  Henry VIII, her half-brother King Edward VI and her half -sister Queen Mary I who ruled before her. Between them, her two predecessors King Henry VIII and King Edward VI  had completely destroyed the Pound by debasing it till there was very little silver left in it. Queen Elizabeth,who was very ambitious for England was hampered by a weak Pound so she sought the help of Sir Thomas Gresham(left),a merchant,to solve the problem.

In the days when coins were made of precious metals,debasement was the  practice where the ruler or the government of the day decided to lower the precious metal content of the coin while keeping its face value unchanged.For example,consider a coin which has a face value of 1Pound. The face value of a coin is referred to as its tale. This coin is made up of a metal (gold or silver) and the metal content of the coin is worth 1Pound as well. The metal content in a coin is referred to as specie.So in this example the tale of the coin is equal to its specie, which is the ideal situation. Now the ruler decides to debase the coin by 20 percent. So he reduces the metal content or the specie value of the coin by 20 percent . But at the same time he maintains the face value of the coin at 1Pound. And thus debases the coin. Read more of this post