Gresham's law is an economic principle dealing with the circulation of money. The law states that "bad money tends to drive out good money." It was named after Sir Thomas Gresham, an English treasury official of the 1500's, though other people had observed the same principle earlier. It applies, for example, where coins have the same face value but hold different amounts of metal or metal of unequal worth. People will spend the lighter or cheaper coins (the "bad money") before the heavier or more precious ones (the "good money").