The Stop of the Exchequer

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The Stop of the Exchequer

In 1672 war broke out with the Dutch, and a great deal of expenditure was at once necessary for the fleet..

No more Exchequer orders could be placed, and the Government was forced to declare a moratorium on those outstanding - the famous "Stop of the Exchequer ".

The result was a serious crisis in the City and a run on the principal goldsmith bankers, many of whose depositors were ruined.

Interest payments on this capital sum (about a million pounds) were subsequently made for a time, but they fell into arrears, and the majority of the capital was added to the National Debt in 1705.

The nature of the "Stop" has often been misrepresented.

It was not a repudiation, nor did it affect as much as half of the Exchequer short-term debts, the remainder being duly paid.

Nor is it easy to see what else the Government could have done in the then state of credit.

The crisis had no serious permanent repercussions; from 1674 onwards improvement in trade caused an increase in the customs revenues, and what with this and subsidies from France, Charles was able to avoid contracting fresh debts from the bankers.

The Stop had ruined Viner, Backwell and Colvill, the leaders of the goldsmith bankers; and a new group now came to the front, headed by Sir Francis Child and Sir Richard Hoare, who avoided making loans to the State, and spread their investments more wisely.

James II was granted a much larger income by Parliament than his brother had ever had, and in spite of forgoing the French subsidy he paid his way throughout his reign.

By the Revolution of 1688 credit had improved so much that the goldsmiths' notes and "running accounts" had ceased to bear interest, and paper money was used for its convenience alone.

Next - Status Women And Children In The Mines.

Crown Finance

But melting down coin for export was not the only possible source of profit; another was lending money to the Government, which, as ever, was in difficulties.

Under the Commonwealth the estates of the Cavaliers had been seized and sold, with results very similar to those of the Dissolution of the Monasteries.

But neither this, nor the seizure of treasure from Spain, prevented Cromwell from leaving a considerable debt.

At the Restoration, the old feudal revenues of the Crown were replaced by a regular parliamentary grant; but Charles II from the first found this insufficient, and... see: Crown Finance

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