Benjamin Franklin wrote that "He that spends a groat a day idly spends idly above six pounds a year, which is the price for the use of one hundred pounds."

The old English silver coin 'groat' originally was the equivalent of the French gros tournois. However, while the gros tournois was - at least nitially - worth of 1 sou, that is, 12 denier, the English groat was equal to 4 pennies. This is explained by the much higher silver content of the 'Tealby penny' of King Henry II, compared to the denier, which was a billon coin. (Although the 'penny' is analogue to the 'denier', and even its abbreviation 'd' comes from the French word, they were not equivalent in value.)

So Franklin's calculation does make sense: saving a groat a day means saving 1460 pence a year, which is a little more than 6 pounds.

Silver groat of Edward I

It was Edward I who first minted groats in 1279, using .925 silver, this fineness is called 'sterling silver'. Had it been really 4 pennyweights, as its name ('fourpence') suggests, it should have contained 4 x 24 = 96 grains of sterling silver. But even the first groats of Edward I were only 82 grains, and later issues became progressively smaller: Edward III issued groats of 72 grains, Henry IV groats of 60 grains, and Edward IV minted groats of 48 grain of silver.

Silver groat of Edward IV, London Mint

But these were only minor changes compared to what is called 'the great debasement' in the monetary history of England. During the reign of Henry VIII, the groat was minted in huge quantities, but with debased quality: from 1544 the fineness of silver in the groat decreased from the normal .925 down to .333 .

Silver groat of Henry VIII from 1545

Henry VIII also reduced the weight of the silver penny by one third, and its fineness from .925 to .250. His son, Edward VI, reduced the weight of the penny even further (on the other hand, he enhanced the gold content of the sovereign).

In 1558, Elizabeth I came to power. Sir Thomas Gresham was given the task of negotiating a loan in Antwerp on behalf of the queen. In a letter to Elizabeth he mentions that debasing of the currency by her father (Henry VIII) was the cause of the shortage of gold in circulation in England:

"It may please your majesty to understand, that the first occasion of the fall of exchange did grow by the King majesty, your late father, in abasing his coin ... which was the occasion that all your fine gold was conveyed out of this your realm."

Because of this letter, Gresham's Law is named after him.