hesitation as readily as if they were full weight. If, however, at
this point, new full-weight coins are put into circulation, these at
once disappear while the old ones remain in circulation--a fact that
has always been somewhat mystifying.

In explanation of the phenomenon was formulated "Gresham's law" of
the circulation side by side of coins of different bullion value: bad
money drives out good money. Sir Thomas Gresham (whose name has but
recently been given to this so-called law), explained the principle
to Queen Elizabeth when counseling her regarding the recoinage of the
debased money of the realm as was done in 1560. He showed that when
old, worn coins were in circulation and the mint began putting out
full-weight coins, the old lighter ones remained as money, while the
new ones, being heavier, were picked out by jewelers and by those
needing to send money abroad.

Gresham's law has a paradoxical wording and is frequently
misunderstood. "Bad" money means not counterfeit money, but merely
money that has not as great a bullion value compared with its money
value as some other kind of money then in circulation. But not every
piece of such money will drive out every piece of good money. The law
applies only under certain conditions, and within certain limitations.
The "good" will be driven out only if the total amount of money in
circulation is in excess of what would be needed if all were of full
weight and of best quality. Paradoxically speaking, if there is not
too much of the bad money, it is just as good as the good money. But
even if good money is driven out, it may not leave the country. It
may be hoarded, or be picked out by banks and savings-institutions to
retain as their reserves, or be melted for use in the arts. Gresham's
"law" becomes thus a practical precept. As applied to the plan of