Business, Legal & Accounting Glossary
Sir Thomas Gresham, a merchant and financier by profession is also known as the founder of eminent institution Gresham College in London. His contribution to economics is still effective in several analyses relating to monetary economics. He invented famous Gresham’s law, which is a basic economic principle used in concept of circulation of money.
This great personality was born in 1518 in London, England. By profession, he was a merchant of London but founded Royal Exchange and Gresham College, London. He descended from a family settled in Old Norfolk, and was the son of Sir Richard Gresham, who was also a leading London merchant. His father also held the office of lord mayor for some time and also rendered effective services in bargaining loans with foreign merchants on behalf of Henry VIII. His father intended to bring him to his profession and so send him to Caius College, Cambridge.
He then served as an apprentice to his uncle Sir John Gresham, who was also a merchant by profession. It was in 1543 when he was twenty-four that Sir Thomas Gresham was appointed as a member of Mercers’ Company. It was in this year that he went to low countries to serve two purposes. One was to carry out his business and the other was to settle matters on behalf of Henry VIII. His marriage was consummated in the year 1544 to the widow of William Read, who was also a merchant in London. Due to mismanagement of Sir William Dansell, who was “king’s merchant”, English government had to face great financial mortification and then Gresham was consulted and his proposals were carried out to come out from a financial mess.
Proposals of Gresham were used in sorting nearly all money difficulties by government. He never received any fixed salary from the government but as a reward of his services, he got several grants of lands, which had an annual value of £400. Once he was transferred from his post and Alderman William Dauntsey took his post but financial operations under William Dauntsey were not that fruitful, hence Gresham was again called upon.
This time apart from a fixed salary of twenty shillings per diem he also received grants of church lands, which had a yearly value of £200. In the regime of Queen Elizabeth, Gresham was not only a financial agent of the crown but also a provisional diplomat at the court of Duchess of Parma. Gresham had a sudden death on the 21st of November 1579.
He left behind a logical theory known as Gresham’s Law that states “bad money drives out good,” which means that when devalued, mutilated, or debased coinage or currency is circulated in economy with money of high value, then valued money is withdrawn by investors.
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This glossary post was last updated: 2nd April, 2020 | 0 Views.