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In the civil service of the United Kingdom, His Majesty's Exchequer,^[1] or just the Exchequer, is the accounting process of central government and the government's current account (i.e., money held from taxation and other government revenues) in the Consolidated Fund.^[2] The term is used in various financial documents, including the latest departmental and agency annual accounts.^[3]^[4]^[5]^[6]

Historically, it was the name of a British government department^[7] responsible for the collection and the management of taxes and revenues, making payments on behalf of the sovereign, and auditing official accounts. It also developed a judicial role along with its accountancy responsibilities and tried legal cases relating to revenue.^[8]

Similar offices were later created in Normandy around 1180, in Scotland around 1200 and in Ireland in 1210.^[9]

Etymology

The Exchequer was named after a table used to perform calculations for taxes and goods in the medieval period.^[10] According to the Dialogus de Scaccario ('Dialogue concerning the Exchequer'),^[11] an early medieval work describing the practice of the Exchequer, the table was large, 10 feet by 5 feet with a raised edge or "lip" on all sides of about the height of four fingers to ensure that nothing fell off it, upon which counters were placed representing various values. The name Exchequer referred to the resemblance of the table to a chess board (French: échiquier) as it was covered by a black cloth bearing green stripes of about the breadth of a human hand in a chequer-pattern. The spaces represented pounds, shillings and pence.^[11]

The term Exchequer then came to refer to the twice-yearly meetings held at Easter and Michaelmas, at which government financial business was transacted and an audit held of sheriffs' returns.

Exchequer of Normandy

The operation of an exchequer in Normandy is documented as early as 1180. This exchequer had broader jurisdiction than the English exchequer, dealing in both fiscal and administrative matters. The Dialogue concerning the Exchequer presents it as a general belief that the Norman kings established the Exchequer in England on the loose model of the Norman exchequer, while noting with some doubt an alternative view that the Exchequer existed in Anglo-Saxon times. The specific chronology of the two exchequers' foundings remains unknown.

Exchequer in England and Wales

It is unknown exactly when the Exchequer was established, but the earliest mention appears in a royal writ of 1110 during the reign of King Henry I.^[12] The oldest surviving Pipe Roll is that of 1130 (already in mature form, indicating that such records existed for some time beforehand, though they do not survive).^[13]^: p.159^[14] Pipe Rolls form a mostly continuous record of royal revenues and taxation; however, not all revenue went into the Exchequer, and some taxes and levies were never recorded in the Pipe Rolls.^[15]^: p.219

Under Henry I, a procedure adopted for the audit involved the treasurer drawing up a summons to be sent to each sheriff, who was required to answer with an account of the income in his shire both from royal demesne lands and from the county farm (a form of local taxation). The chancellor of the Exchequer then questioned him concerning debts owed by private individuals.^[16]^: 73–74

By 1176, the 23rd year of the reign of Henry II which is the date of the Dialogue concerning the Exchequer,^[11]^[17] the Exchequer was split into two components: the purely administrative Exchequer of Receipt, which collected revenue, and the Exchequer of Pleas, a law court concerned with the King's revenue. Appeals were to the Court of Exchequer Chamber. Following the proclamation of Magna Carta, legislation was enacted whereby the Exchequer would maintain the realm's prototypes for the yard and pound. These nominal standards were, however, only infrequently enforced on the localities around the kingdom.

From the late 1190s to the expulsion of the Jews in 1290, there was a separate division for taxation of Jews and the law-cases arising between Jews and Christians, called Exchequer of the Jews (Latin: Scaccarium Judaeorum).^[18]^[19]

Through most of the 1600s, goldsmiths would deposit their reserve of treasure with the Exchequer, sanctioned by the government. Charles II "shut up" the Exchequer in 1672, forbidding payments from it, in what Walter Bagehot described as "one of those monstrous frauds... this monstrous robbery". This ruined the goldsmiths and the credit of the Stuart government, which would never recover it. In 1694, the credit of William III's government was so bad in London that it could not borrow, which led to the foundation of the Governor and Company of the Bank of England.^[20]

The records of the Exchequer were kept in the Pell Office, adjacent to Westminster Hall, until the 19th century. The office was named after the skins (then "pells" or pelts) from which the rolls were made.^[21]

Officers

Reform and decline

In the 19th century, a number of reforms reduced the role of the Exchequer, with some functions moved to other departments. The Exchequer became unnecessary as a revenue collecting department in 1834 with the reforms of Prime Minister William Pitt, who also served as Chancellor of the Exchequer. The government departments collecting revenue then paid it directly to the Bank of England, with all money previously paid to the Exchequer being credited to the Consolidated Fund.^[22]

In 1866, the Standards Department of the Board of Trade took over metrological responsibilities^[23] and audit functions were combined with those of the Commissioners for auditing the Public Accounts under the new post of Comptroller and Auditor General.^[24] The name continued as the Exchequer and Audit Department from 1866 until 1983 when the new National Audit Office was created.^[25]^[26]

In modern times, "Exchequer" has come to mean the Treasury and, colloquially, pecuniary possessions in general; as in "the company's exchequer is low".^{[citation needed]}

Exchequer in Scotland

The Scottish Exchequer dates to around 1200, with a similar role in auditing and royal revenues as in England. The Scottish Exchequer was slower to develop a separate judicial role; and it was not until 1584 that it became a court of law, separate from the king's council. Even then, the judicial and the administrative roles were never completely separated as with the English Exchequer.

In 1707, the Exchequer Court (Scotland) Act 1707 (6 Ann. c. 53) reconstituted the Exchequer into a law court on the English model, with a lord chief baron and four barons.^[27] The court adopted English forms of procedure and had further powers added. This was done in Section 19 of the Act of Union 1707^[28]

From 1832, no new barons were appointed; their role was increasingly assumed by judges of the Court of Session. By the Exchequer Court (Scotland) Act 1856 (19 & 20 Vict. c. 56), the Exchequer became a part of the Court of Session. A lord ordinary acts as a judge in Exchequer causes.^[29] The English forms of process ceased to be used in 1947.

Exchequer of Ireland

The Exchequer of Ireland developed in 1210 when King John of England reorganized the governance of his Lordship of Ireland and brought it more in line with English law.^[9] It consisted of the Superior Exchequer, a court of equity and revenue akin to the Exchequer of Pleas, and the Inferior Exchequer.^[9] The latter were the treasurers who handled all logistics from collecting the money (Teller or Cashier), logging it (Clerk of the Pells) and signing money orders accepting or paying money.^[30]^[31] It was managed by its own Chancellor of the Exchequer of Ireland and Chief Baron of the Irish Exchequer.

The Court of Exchequer (Ireland) existed from about 1299 to 1877. It was abolished under the Supreme Court of Judicature Act (Ireland) 1877 and was merged, along with the Court of King's Bench (Ireland), the Court of Chancery (Ireland) and the Court of Common Pleas (Ireland), into the new High Court of Justice in Ireland (now replaced by the High Court).^[9]

The Central Fund, the Republic of Ireland's equivalent of the UK's Consolidated Fund, is colloquially called the Exchequer when distinguished as a component of government funding.^[32]

References

^ "Interpretation Act 1978". legislation.gov.uk. UK Government. Retrieved 6 October 2016.
^ "Exchequer and Financial Provisions Act (Northern Ireland) 1950". legislation.gov.uk. UK Government. Retrieved 6 October 2016.
^ "Rural Payments Agency Annual Report and Accounts 2015–2016" (PDF). gov.uk. UK Government. Retrieved 6 October 2016.
^ "Department for Environment, Food and Rural Affairs Annual Report and Accounts 2015–16" (PDF). gov.uk. UK Government. Retrieved 6 October 2016.
^ "Department for Education Consolidated annual report and accounts For the year ended 31 March 2015" (PDF). gov.uk. UK Government. Retrieved 6 October 2016.
^ "Consolidated Accounts for the year ended 31 March 2015" (PDF). gov.scot. The Scottish Government. Retrieved 6 October 2016.
^ "Exchequer and Audit Departments Act 1866". legislation.gov.uk. UK Government. Retrieved 6 October 2016.
^ Bryson, W.H. (2008). The Equity Side of the Exchequer. Cambridge University Press. ISBN 978-0-521-07659-3.
^ ^a ^b ^c ^d Howard, Gorges Edmond (1776). A treatise of the Exchequer and revenue of Ireland. Vol. 1. J.A. Husband. OCLC 5111516.
^ Noble, Thomas (2002). "36". The foundations of Western civilization. Chantilly, VA: Teaching Co. ISBN 978-1565856370.
^ ^a ^b ^c King John of England: Royal Licenses to Export and Import, 1205–1206 Dialogue concerning the Exchequer Internet Medieval Sourcebook publ by Fordham University, New York. Source: Joseph Hunter, ed., Rotuli Selecti, (London: Eyre & Spottiswoode, 1834), pp. 4–5, 11; reprinted in Roy C. Cave & Herbert H. Coulson, A Source Book for Medieval Economic History, (Milwaukee: The Bruce Publishing Co., 1936; reprint ed., New York: Biblo & Tannen, 1965), p.412
^ Johnson, Charles; Cronne, H. A. (1956). Regesta Regum Anglo-Normannorum 1066–1154. Vol. II. 961.
^ Bartlett, Robert (2000). England Under the Norman and Angevin Kings: 1075–1225. Oxford, UK: Clarendon Press. ISBN 0-19-822741-8.
^ Chrimes Administrative History pp. 62–63
^ Coredon Dictionary p. 219
^ Warren, W. L. (1987). The Governance of Norman and Angevin England 1086–1272. Edward Arnold. ISBN 0-7131-6378-X.
^ Dialogue concerning the Exchequer
^ Joe Hillaby (2003) "Jewish Colonisation in the Twelfth Century" In Patricia Skinner (ed.) Jews in Medieval Britain: Historical, Literary, and Archeological Perspective, pp. 16–17. ISBN 0-85115-931-1
^ Gross, Charles (1887), The Exchequer of the Jews of England in the Middle Ages. London: Office of the Jewish Chronicle; reprinted from Papers of the Anglo-Jewish Historical Exposition, pp. 170–230.
^ Bagehot, Walter (5 November 2010). Lombard Street: a description of the money market (1873). London: Henry S. King and Co. (etext by Project Gutenberg). Charles II. shut up the 'Exchequer,' would pay no one, and so the 'goldsmiths' were ruined. The credit of the Stuart Government never recovered from this monstrous robbery.
^ Urbanus Records of the Exchequer. The Issue Roll of Thomas de Brantingham, Bishop of Exeter, Lord High Treasurer of England, containing payments made out of His Majesty's Revenue in the 44th year of Edward Ill, AD 1370 translated from the original Roll now remaining in the ancient Pell Office, by Frederick Devon. London, 1835, pp. 516. Gentleman's Magazine, 1836, vol. 5, pp. 17–22, publ. W. Pickering.(book review) Google books
^ "Exchequer Extra Receipts Act 1868". legislation.gov.uk. UK Government. p. Section 1. Retrieved 15 November 2016.
^ "Standards Department" . Encyclopædia Britannica. Vol. 25 (11th ed.). 1911.
^ "Exchequer and Audit Departments Act 1866". legislation.gov.uk. UK Government. p. Section 5. Retrieved 15 November 2016.
^ “The Audit Commission” by Couchman V. in Sherer & Turley: Current Issues in Auditing, Paul Chapman Publishing (1997)
^ "National Audit Act 1983". legislation.gov.uk. UK Government. Retrieved 15 November 2016.
^ "Exchequer Court (Scotland) Act 1707". legislation.gov.uk. UK Government. Retrieved 11 November 2016.
^ Section XIX, "And that there be a Court of Exchequer in Scotland after the Union, for deciding Questions concerning the Revenues of Customs and Excises there, having the same power and authority in such cases, as the Court of Exchequer has in England": Act of Union 1707 at Wikisource.
^ "Exchequer Court (Scotland) Act 1856". legislation.gov.uk. UK Government. Retrieved 11 November 2016.
^ Thomas, Francis Sheppard (1848). The Ancient Exchequer of England; the Treasury; and Origin of the Present Management of the Exchequer and Treasury of Ireland. J. Petheram. OCLC 465938569.
^ H., M. T. (1932). "Review: History of the Financial Administration of Ireland to 1817 by T. J. Kiernan". Irish Province of the Society of Jesus. 21 (81).
^ "Appendix E: The General Government Sector" (PDF). Fiscal Assessment Report. Dublin: Fiscal Council. November 2016. pp. 102–103.