Restoring the English currency
The Tudor treasury
In the 16th century, the expense of running the country was borne by the monarch. Regular taxation as we know it was not common: taxes were enacted by Parliament only when needed for specific purposes, such as war. The 'national treasury' comprised the Crown's personal fortune and revenue raised from crown lands and custom's duties.
As there was no concept of 'national debt', monarchs often used 'creative' methods to raise cash. Henry VIII, for example, raised money by minting new coins that were made of base metals mixed with a little silver or gold and circulating them at the same face value as solid silver and gold coins. This debasing of the coinage raised an enormous amount of money for Henry VIII's military ventures but it had adverse long-term effects.
At home, as people caught on to the 'scam', they began to hoard the older coins with a higher content of precious metal, leaving only the 'bad' money in circulation. Abroad, foreign bankers and vendors refused to accept the coinage and insisted on payment in gold. Both practices created a gold shortage at home, making gold harder to source for minting new coins and for foreign transactions.
Domestic reforms
When Elizabeth came to power, she inherited one of the most debased coinages in history, which damaged trade relations and the reputation of the monarchy. Elizabeth analysed the problem and formulated a solution in concert with her trusted advisers William Cecil and the financial genius, Thomas Gresham. Gresham was put in charge of the programme and acted swiftly and efficiently. Within a year (1560–61) the debased money had been withdrawn, melted down and replaced with newly minted Elizabethan coins of precious metal. The crown even made a healthy profit from the exercise, estimated at £50,000.
The restoration of the coinage improved the dealings of English merchants abroad and secured the trust and respect of the City for Elizabeth and her government. The success of the initiative and the maintenance of the integrity of the coinage throughout her reign led to an economic recovery. The confidence that it bred allowed for the expansion in trade and industry that followed. The boldness of the venture and the skill and efficiency with which it was executed boosted Elizabeth's reputation at home and abroad.
Small change and reforms to the system of standard weights and measures were also introduced during Elizabeth's reign, which allowed for more accurate transactions. They also point to an awareness on the part of Elizabeth and her government of the need for quality control and strict regulation of standards to maintain faith in a product or organization.
Sir Thomas Gresham
Sir Thomas Gresham (1517/18–79) served as Elizabeth's chief financial adviser, negotiating loans on the Crown's behalf and advising Elizabeth on the necessity of recoinage.
A very successful businessman, Gresham paid for the establishment of an exchange in London, the precursor to the London Stock Exchange, which was completed in 1569. After Elizabeth visited 1571 it became known as the Royal Exchange.
The Exchange was very successful with merchants from England and Europe. It provided a valuable symbol of the nation's increasing wealth as well as of its changing status from an 'island nation' isolated from power to one that was a seat of power and commerce, independent of the problems in continental Europe.