The Great Debasement

Overspending by Henry VIII to pay for his lavish lifestyle and to fund foreign wars with France and Scotland are cited as reasons for the policy's introduction.

The main aim of the policy was to increase revenue for the Crown at the cost of taxpayers through savings in currency production with less bullion being required to mint new coins.

In the 16th century, after suffering from the effects of the Black Death, Europe was in the middle of an economic expansion due in part to increased trade and newly discovered deposits of precious metals from the New World.

[2] By May 1544, a lack of bullion arriving at the mint prompted the government to issue the secret indenture and allow the debased coins to enter into general circulation.

Two months later, in July 1544, merchants of the Low Countries discovered that newly minted silver groats had become debased and begun offering a lower price for them.

By the time Elizabeth I came to power in 1558, the quality of England's coinage had already greatly affected both confidence in the monarchy as well as the country's trading relations, with foreign merchants refusing to accept the debased currency as payments.

In concert with her advisers William Cecil and Thomas Gresham the queen became convinced that these problems could be solved by restoring England's coinage to its previously high standards, by removing debased currency from circulation.