Sir Thomas Gresham, ?1519-1579.

Fabulously wealthy 16th Century English financier, merchant and statesman, principal economic advisor to Queen Elizabeth I of England.

Descended from a notable family of Norfolk cloth merchants, who had relocated to London, Gresham's father had served as Lord Mayor of London for a brief period.  Abandoning his early studies at Cambridge, Thomas Gresham entered the cloth business himself, joining the Mercer's Company in London.  Around 1551, Gresham was appointed royal agent in Antwerp - essentially, manager of the English royal debt in European money markets - a position he would serve for sixteen years.  The time in Antwerp gave him also a direct view of the the economic impact of the 1550s debasements of English coin and the problems of English overseas cloth trade.  

Gresham stressed the importance of stable coinage for export competitiveness and the management of public debt.  Gresham is best remembered for his dictum that "bad money drives out good", what became later known as Gresham's Law (Macleod, 1858: p.477)  This refers to the observation that the exchange ratio between gold and silver on the market may be different that the implicit gold-silver ratio at the Mint.  If they are indeed different, then the metal that is relatively overvalued at the mint (i.e. the "bad money") will be minted into coins and find its way into circulation, while the other undervalued metal (i.e. the "good money") will be melted down and hoarded away.  Although there is no evidence that Gresham actually ever made this observation, his name has become irrevocably attached to it because of his policies to control this phenomenon.

In 1559 Gresham was knighted and was subsequently asked by the new Queen Elizabeth to come up with a plan to curb inflation in England (which had been raging since the Great Debasement of 1553) and arrest the slide of the value of the English pound on the Antwerp exchange market.  Gresham's solution was to recall and remint all the (debased) silver coinage of England at the old (pre-1543) rate of 37/40 pure silver -- in effect, a substantial monetary contraction. Previous holders of money received only a fraction of their earlier face value.  Although at great social cost, Gresham's stabilization plan ultimately worked and inflation was brought down to manageable levels. 

Sir Thomas Gresham was an early Mercantilist, and urged the use of royal power to place English commerce in the hands of English merchants.  Gresham vigorously promoted the Society of Merchant Adventurers (English unfinished cloth exporters) at the expense of the German Hanseatic League, persuading first Mary, then Elizabeth, to raise customs duties (e.g. 1557) and reduce the export licenses for raw wool and unfinished cloth granted to Hansa merchants in the London Steelyard.  The Hanseatic League retaliated, using their influence to impose an embargo on English cloth imports into the Low Countries and Germany in 1563 (it lasted little over a year, after the English side-stepped the restrictions through the non-Hansa Friesland port of Emden and upped the ante by cutting off raw wool exports to Flanders). 

The experience of the embargo allowed Gresham to promote schemes to strengthen the position of English traders.  He was instrumental in the reorganization of the Merchant Adventurers in 1564 along more oligarchic lines. In 1565, Gresham founded the Royal Exchange in London, a "permanent fair" to compete with the Antwerp Bourse.  In 1567, with the outbreak of the Dutch revolt, sensing the English merchant quarter in Antwerp was vulnerable to violent religious tumults and Spanish reaction, Gresham helped negotiate the establishment of an English merchant quarter in Hamburg as an alternative.  The value of the Hamburg option proved itself immediately in 1568, when, in a quarrel over a Spanish ship seized in Plymouth harbor, the Spanish Duke of Alba ordered all English property in Antwerp seized (Gresham left Antwerp at this point, never to return;  Elizabeth retaliated with the seizure of Dutch property in England and trade between England and the Low Countries ceased; but the export trade through Hamburg continued.)

The Anglo-Hanseatic trade quarrel erupted anew in the 1570s.  With Gersham's encouragement, Elizabeth reduced export licenses further, and, in 1572, made a trade agreement with Charles IX of France and opened negotiations with Denmark to undermine the Hanseatic League.  In retaliation, the Hanseatic League tried to assemble a new embargo and, in 1576, ordered Hamburg to expel all English merchants. Gresham was among those that urged maintaining a hardline against the Hanseatic tactics, rather than relaxing the export restrictions.  This culminated in the famous 1579 decision by Elizabeth to end all export licenses and abolish all privileges to German merchants in London, ending centuries of the Hanseatic role in English trade (although their Steelyard property holdings would linger until 1597).  Gresham endorsed the chartering the English Eastland Company in 1579 to directly compete with the commerce of the Hanseatic League  in Scandinavia and the Baltics.

Sir Thomas Gresham lived just long enough to see his anti-Hanseatic trade policy brought to its apex.  In his will, Gresham founded Gresham College, on the premises of in his London mansion at Bishopsgate.  It was an unusual institution of higher learning, which awarded no degree and took no students, but rather offered lectures free and open to the general public.  There were seven chairs endowed by Gresham according to a precise nomination procedure: the City Corporation of London would appoint the professors of Astronomy, Geometry, Divinity and Music, while the Mercers' Company would appoint the chairs in Law, Physic and Rhetoric.  Notably, the chairs of astronomy and geometry were the first in England, revealing Gresham's interest in the fledgling scientific revolution. The College would fulfill that promise in serving as the incubus of a particularly brilliant group of young scientists in the 1650s - including Robert Boyle, Christopher Wren, John Wallis, Robert Hooke and William Petty - who would go on to found the Royal Society on the premises in 1660.

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