Great Stop of the Exchequer
Encyclopedia
The Great Stop of the Exchequer
or Stop of the Exchequer was a repudiation of state debt that occurred in England
in 1672 under the reign of Charles II of England
.
This occurred on Tuesday 2 January 1672 (under the Julian calendar in which the year begins in March which was in use in England at the time).
The payments that were suspended by the decree were upon:
"any warrant, securities or orders, whether registered or not registered therein, and payable within that time, excepting only such payments as shall grow due upon orders on the subsidy, according to the Act of Parliament, and orders and securities upon the fee farm rents, both which are to be proceeded upon as if such a stop had never been made."
The period of the stop was to be one year, ending on the 31st of December 1673. In the interim the King intended that interest would be paid to all those who were owed payment of outstanding bonds that had become due "at the rate of six pounds per cent".
Further background information on the causes and effects of the Stop of the Exchequer were revealed in a letter from Richard Langhorne
to Lord Hatton:
Exchequer
The Exchequer is a government department of the United Kingdom responsible for the management and collection of taxation and other government revenues. The historical Exchequer developed judicial roles...
or Stop of the Exchequer was a repudiation of state debt that occurred in England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
in 1672 under the reign of Charles II of England
Charles II of England
Charles II was monarch of the three kingdoms of England, Scotland, and Ireland.Charles II's father, King Charles I, was executed at Whitehall on 30 January 1649, at the climax of the English Civil War...
.
This occurred on Tuesday 2 January 1672 (under the Julian calendar in which the year begins in March which was in use in England at the time).
The payments that were suspended by the decree were upon:
"any warrant, securities or orders, whether registered or not registered therein, and payable within that time, excepting only such payments as shall grow due upon orders on the subsidy, according to the Act of Parliament, and orders and securities upon the fee farm rents, both which are to be proceeded upon as if such a stop had never been made."
The period of the stop was to be one year, ending on the 31st of December 1673. In the interim the King intended that interest would be paid to all those who were owed payment of outstanding bonds that had become due "at the rate of six pounds per cent".
Further background information on the causes and effects of the Stop of the Exchequer were revealed in a letter from Richard Langhorne
Richard Langhorne
Blessed Richard Langhorne was a barrister executed as part of the Popish Plot. He was admitted to the Inner Temple in May 1647 and called to the bar in November 1654. He provided legal and financial advice for the Jesuits....
to Lord Hatton:
- A total 82 ships were to be prepared for sail "in the cause of national defense", i.e. to attack the Dutch RepublicDutch RepublicThe Dutch Republic — officially known as the Republic of the Seven United Netherlands , the Republic of the United Netherlands, or the Republic of the Seven United Provinces — was a republic in Europe existing from 1581 to 1795, preceding the Batavian Republic and ultimately...
in the Third Anglo-Dutch WarThird Anglo-Dutch WarThe Third Anglo–Dutch War or Third Dutch War was a military conflict between England and the Dutch Republic lasting from 1672 to 1674. It was part of the larger Franco-Dutch War...
. - The bankers of Lombard Street were asked for an 'advance' (loan) to the king to finance the fleet, they refused to make the loan.
- Due to the pressing need for money the king and his council resolved to find the money for the fleet by cutting other parts of the treasury's budget - money that had been allocated for the repayment of bonds and securities were to be spent on the fleet and only interest paid with no repayment of principal that year.
- There was great disruption and damage to the financial markets: "I believe it certain that the trade of bankers is totally destroyed by this accident".