Exchequer Bills

Exchequer Bills, bills issued at the Exchequer under the authority of acts of parliament, as security for money advanced to the government. They contain an engagement on the part of the government for the payment of the principal sums advanced, with interest. These bills form the chief part of the unfunded debt of the country. They were first issued in the reign of William III., in the year 1696, and were drawn for various amounts from £100 to £5. At that time they bore interest at the rate of 3d. per day on £100. The interest was reduced to 2d. during the reign of Anne. During the war 1793-1814, the rate of interest was usually 3½d. At present it is generally from 1½d. to 2½d. per £100 per diem. Holders of these bills are exempt from all risk, except that arising from the amount of premium or discount they may have given for them. The bills pass from hand to hand as money, and are payable at the Treasury at par. They may also be paid to government in discharge for taxes. When it is intended to pay off outstanding Exchequer bills, public notice is given by advertisement. The advances of money to government by the Bank of England are made on Exchequer bills. These bills are a convenient means whereby government can meet a sudden demand for unusual expenditure. The unfunded debt consists of Exchequer Bills, Exchequer Bonds, and Treasury Bills; the total unfunded debt in 1895 was £17,400,300. See NATIONAL DEBT.