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In thecivil service of theUnited Kingdom,His Majesty's Exchequer,[1] or just theExchequer, is theaccounting process of central government and the government'scurrent account (i.e., money held fromtaxation and other governmentrevenues) in theConsolidated 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 aBritish 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 itsaccountancy responsibilities and tried legal cases relating to revenue.[8]
Although the Exchequer was the official way of receiving tax revenue for his/her majesty's government, by the late fifteenth century,[9] there was never a way of knowing how much one had at a given time. Any report would take years to come to fruition.
Similar offices were created inNormandy around 1180, inScotland around 1200 and inIreland in 1210.[10]
The Exchequer was named after a table used to perform calculations for taxes and goods in the medieval period.[11] According to theDialogus de Scaccario ('Dialogue concerning the Exchequer'),[12] an earlymedieval 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 whichcounters were placed representing various values. The name Exchequer referred to the resemblance of the table to achess board (French:échiquier) as it was covered by a black cloth bearing green stripes of about the breadth of a human hand in achequer-pattern. The spaces represented pounds, shillings and pence.[12] This was necessary because many sheriffs, who were responsible for collecting and submitting taxes, were unable to read or write.[13]
The termExchequer then came to refer to the twice-yearly meetings held atEaster andMichaelmas, at which government financial business was transacted and an audit held ofsheriffs' returns.
It is unknown exactly when the Exchequer was established, but the earliest mention appears in a royal writ of 1110 (during the reign of KingHenry I), addressed fromRoger of Salisbury andRanulf theChancellor to thebarones de scaccario (Barons of the Exchequer).[14] The oldest survivingPipe Roll is that of 1130, already in mature form (indicating that such records existed for some time beforehand, though they do not survive).[15]: p.159 [16] Pipe Rolls form a mostly continuous record of royal revenues and taxation (though not all revenue went into the Exchequer, and some taxes and levies were never recorded in the Pipe Rolls).[17]: p.219 TheDialogus de Scaccario ('Dialogue concerning the Exchequer'), which gives a detailed description of the Exchequer and its workings, is believed to date from the late 1170s (during the reign ofHenry II).[12]
Like other offices of state in England, the Exchequer originally formed part of theCuria Regis. The royal court was the centre of government administration and finance, no distinction was made between the King's money and thepublic finances.His Majesty's Treasury was, in origin, a strong box kept in the king'schamber and (even when it had been given a more secure and permanent base inWinchester Castle) it was overseen by the king'schamberlains.[18] While the Treasury was, first and foremost, the place where the money was stored, the Exchequer emerged (in the early 12th century) as 'the Curia sitting for financial purposes';[19] as such it was, by default, staffed and overseen by theGreat Officers of State.
By the end of the 12th century, the Exchequer had begun to separate itself from theCuria Regis and was operating more-or-less independently.[18] When in session it was termed the King's Court at the Exchequer (Curia Regis ad Scaccarium).[20]
TheDialogue concerning the Exchequer describes thec. 1180 Exchequer as split into two components, which it terms the 'upper Exchequer' and the 'lower Exchequer'.[21] The upper Exchequer (usually referred to simply as 'the Exchequer')[22] functioned as aCourt of Audit:[23] those appointed as Barons of the Exchequer would sit at the counting table (with its distinctive chequered cloth) where, one by one, thesheriffs of the kingdom (and others with responsibility for Crown revenues[a]) would present themselves to account for monies (rents and other income) which they had received on behalf of the King. The lower Exchequer (called theExchequer of Receipt) was where these monies were deposited (and woodentally sticks issued as a receipt for each deposit). The two were inextricably connected: 'whatever is declared payable at the greater [upper] one is here [at the lower] paid; and whatever has been paid here is accounted for there'.[21]
Owing to the Barons' experience in weighing evidence and passing judgements, the king began to look to the Exchequer to settle disputes between his subjects (particularly those concerning property and possessions); for example, by the 1170sfine of lands suits were regularly (though not exclusively) heard at the Exchequer.[25]
The Exchequer normally sat at two times of year: atEaster (when the sheriffs were required to present an interim account) and atMichaelmas (when they were to present their final account for the year). (TheExchequer year ended on 29th September, the feast ofMichaelmas.[26]) The Exchequer of Receipt operated only while the Exchequer was in session; afterwards the chests of money were taken and deposited in the Treasury at Winchester.[27]
In the upper Exchequer, theChief Justiciar (who presided, in the absence of the king[b]) sat at the head of the table.[29] Facing him (across the table) sat the sheriff (or other person) whose account was being examined. On the Justiciar's left sat the king'sChancellor and others who had been appointed as Barons of the Exchequer for the duration of the session. The Chancellor attended with theGreat Seal of the Realm, which served as theseal of the Exchequer. (Up until the early 13th century the Great Seal was ordinarily kept in the 'Treasury of the Exchequer' when not in use).[30]
The Barons of the Exchequer are described in theDialogue as 'certain who excel in greatness and discretion, whether they be of the clergy or of the Court'. They sit 'by the mere command of the Sovereign, and so with temporary authority'. Their role is 'to decide rights and to determine questions that arise; for the special science of the Exchequer consists not in accounts but in judgements of all sorts'.[31] It was still the norm at this time for Great Officers of the State to serve as Barons by virtue of their office (though others would be appointed in their place if they were otherwise engaged, which often happened as they frequently had duties elsewhere).
Alongside the Justiciar and the Chancellor, those usually appointed Barons by reason of their office were theConstable, two Chamberlains and theMarshal.[19] Each had particular roles with regard to the Exchequer when it was in session: the Constable would witness (with the Justiciar) anywrits that were drawn up (e.g. for the issuing of money or the discharge of debts); the Chamberlains were the deputies of theMaster Chamberlain who had oversight of the Treasury (unlike the other Barons, the Chamberlains had duties in the lower as well as the upper Exchequer); the Marshal was responsible for detaining any individuals who failed to satisfy the Barons with their account, and afterwards (if the court so required) placing them in custody.[32]
Seated along the long side of the table, at the right hand of the Justiciar, were the king'sTreasurer and theclerks who were tasked with making a record of the proceedings: the Treasurer's clerk (later 'Clerk of the Pipe') was responsible for the Treasury Roll (also known as theGreat Roll of the Exchequer or Pipe Roll). The Chancellor's clerk (later 'Comptroller of the Pipe') was responsible for the Chancellor's Roll (which was a duplicate record of proceedings and served as acounter-roll); he was also responsible for drawing up writs to be issued through the court.[33] The Constable's clerk was also present (he played a key role in maintaining communication with the king's Court).[34]
Facing them across the table sat the Chamberlains' serjeant (who had with him the counter-tallies from the lower Exchequer, for checking against the tallies brought by the sheriffs), the Chancellor's deputy (the Master of theScriptorium) and, between them, the 'calculator' responsible for placing the counters on the counting table.[35]
Another set of officers was responsible for theassays which routinely took place as part of the accounting process, including the melter and the weigher;[36] along with some of the other Exchequer offices, these (comparatively lucrative) positions were heldin fee, with deputies employed to perform the actual duties required.[37] Another such officer was the Usher of the Exchequer, who was responsible for the security of the building and its treasures, and also for conveying the writs of summons to their various recipients (for which he oversaw a corps of messengers).[38]
The king could appoint others to sit at the Exchequer in addition to the office-holders listed above; for example, theDialogue lists the Bishop of Winchester (Richard of Ilchester) as having a seat at the table at that time (as a personal appointee rather than an office-holder) and alsoThomas Brun (who had been tasked with creating a third Exchequer Roll, so that the proceedings would be recorded in triplicate).[21]
The king's Treasurer (who was also designatedTreasurer of the Exchequer) and the two Chamberlains (usually calledChamberlains of the Exchequer to distinguish them from the chamberlains of theHousehold) were the executive officers of the Exchequer. The Treasurer was acleric, the Chamberlains werelaymen. As well as having seats in the upper Exchequer, they had responsibilities with regard to the lower Exchequer, where they were usually represented by deputies (the Treasurer by a clerk (later termedAuditor of the Receipt of the Exchequer), the Chamberlains by a pair of knights). Other officers of the lower Exchequer included fourtellers who counted the money, and a clerk (laterClerk of the Pells) who was responsible for maintaining the Receipt Roll (the record of monies actually deposited) and the Pell of Issue (which recorded the money paid out).[39]
During the first part of the 13th century (by 1248 at the latest) the distinct office ofChancellor of the Exchequer emerged.[34] At around this time theChancery was increasingly gaining independence from theCuria Regis. The king's Chancellor (subsequently termedChancellor of England) was now running a largely autonomous department of state. He continued to sit periodically as a Baron,[40] but his clerk took over most of his other duties with regard to the Exchequer (and during the reign ofHenry III he began to be termed 'Chancellor of the Exchequer').[41] At the same time, the Exchequer was provided with its own seal (the Great Seal of the Realm no longer being to hand), which was placed in the Chancellor of the Exchequer's keeping; he also took custody of the Chancellor's Roll (the counter-roll to the Pipe Roll).
By this time the Constable and Marshal were also represented by deputies termed Constable of the Exchequer and Marshal of the Exchequer respectively.[42]
Under Henry I, the procedure adopted for theaudit involved a writ ofsummons being issued to each sheriff, requiring him to come before the Exchequer with an account of the income in hisshire both from royaldemesne lands and from the countyfarm (a form of local taxation).[43]: 73–74 The summons included a detailed statement of the amounts due (these having been determined by reference to the previous year's Roll),[44] and it required the sheriff to bring to the Exchequer the following items: cash to be paid in, tallies (as proof of deposit) for money already paid in, and copies of any writs or quittances (which made allowances for out-of-pocket expenses).
Summonses were also issued to those called to serve 'by reason of their office or by mandate of their prince' as Barons for the forthcoming session.[21]
Before appearing before the Barons each sheriff had to go to the Exchequer of Receipt to pay in what was due. Payment was normally made in the form ofsilver pennies; it was not unusual for a sheriff to deposit tens of thousands of coins, amounting to several hundredpounds sterling.[45] The coins were counted by the tellers and separated into 100-shilling (£5) batches. Periodically a mixed selection of 240 pennies would be separated off by the Chamberlains' knights and weighed against aTower pound; if the coins were too farbelow the requisite weight the whole deposit could (in theory) be rejected.[46] Each £5 batch was also weighed, before being loaded into £100 sacks (which, when filled, were sealed by the Treasurer's clerk). The sacks were stored in strong boxes with double locks (requiring the presence of both Chamberlains' knights to unlock them), over which the Treasurer's clerk again set his seal.[c] The Chamberlains' staff cut a tally for each deposit made, while the Treasurer's clerk kept a written record of them on the Receipt roll; the 'stock' of the tally was given to the sheriff and the 'foil' was kept by the Exchequer.
In the upper Exchequer the sheriff handed over his summons, which itemised the payments which had been required of him; he then produced the relevant tally stock as proof of payment for each sum deposited (and this was immediately checked by the Chamberlains against the corresponding tally foil). The total amount paid in (totted up using the counters on the table) was then compared against the amount due, and if there was a shortfall (after authorised expenses had been taken into account), then the Barons would judge whether the money owed could be carried forward, or whether the account-holder should be detained pending full payment. The Barons had use of a privy chamber (thalamus secretorum) where they could withdraw if necessary to consider points in private, so that the ongoing accounting business of the Exchequer was not thereby necessarily delayed.[47]
Many Exchequer payments (including most of the county 'farms') were reckoned 'in blanch', meaning that an additional payment had to be paid (to make up for any discrepancy between the face value and actual silver content of the coinage used). At times the level of this payment was ascertained by assay: coins with a total face value of £1 were melted down and the silver ingot produced was solemnly weighed against a pound weight before the Barons; at other times a notional blanch of a shilling in the pound (i.e. 5%) was used.[48]
During the 13th century the office of Chief Justiciar gradually receded in importance (it had disappeared by the end of the reign ofHenry III, i.e. by 1272). In place of the Justiciar, the king's Treasurer (whose influence in the realm was steadily growing) began to take precedence at the Exchequer.[49] His role developed into the office ofLord High Treasurer of England. Those appointed to this office were invariably appointed Treasurer of the Exchequer at the same time, by issue of a separatepatent.
Around 1234, the office of Baron of the Exchequer began to emerge as a permanent appointment with its own distinct status, function and salary.[50] At around the same time, the judicial business of the Exchequer began to be placed on a more formal footing: the earliestplea rolls of the Exchequer date from 1236.[51]
Also around this time a pair of Exchequer officers calledRemembrancers were appointed; each kept what was known as a Memoranda Roll (one on behalf of the King, the other on behalf of the Treasurer). These supplemented the Pipe Roll by recording other items of Exchequer business from day to day.[52]
Following the proclamation ofMagna Carta, legislation was enacted whereby the Exchequer would maintain the realm'sprototypes for theyard andpound. These nominal standards (known as theExchequer Standards) were, however, only infrequently enforced on the localities around the kingdom.
In the year 1300 the location of the Exchequer (which had formerly sat in other places from time to time) was permanently fixed at Westminster. At the same time the Court of the Exchequer was forbidden from hearing cases between the king's subjects; however this practice (which had grown over time) still continued, in part through the employment offictions.
In the early 14th century, the accounting function of the (upper) Exchequer came to be distinguished from its judicial function; the former began to be termed theExchequer of Account and the latter theExchequer of Pleas (formally both were one and the same Exchequer, but practically they functioned separately).[53] Not long afterwards aChief Baron was appointed to preside at the Exchequer of Pleas.[49]
In the 1490s around 90 percent of the King's revenue was received by the Exchequer.[54]
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 whatWalter 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 ofWilliam III's government was so bad in London that it could not borrow, which led to the foundation of the Governor and Company of theBank of England.[55]
The records of the Exchequer were kept in thePell Office, adjacent toWestminster Hall, until the 19th century. The office was named after the skins (then "pells" or pelts) from which the rolls were made.[56]
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 MinisterWilliam Pitt, who also served as Chancellor of the Exchequer. The government departments collecting revenue then paid it directly to theBank of England, with all money previously paid to the Exchequer being credited to theConsolidated Fund.[57]
In 1866, theStandards Department of theBoard of Trade took over metrological responsibilities[58] and audit functions were combined with those of theCommissioners for auditing the Public Accounts under the new post ofComptroller and Auditor General.[59] The name continued as theExchequer and Audit Department from 1866 until 1983 when the newNational Audit Office was created.[60][61]
In modern times, "Exchequer" has come to mean theTreasury and, colloquially,pecuniary possessions in general; as in "the company's exchequer is low".[citation needed]
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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. TheDialogue 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' founding's remains unknown.
From the late 1190s to theexpulsion of the Jews in 1290, there was a separate division for taxation ofJews and the law-cases arising between Jews and Christians, calledExchequer of the Jews (Latin:Scaccarium Judaeorum).[62][63]
The Scottish Exchequer dates to around 1200, with a similar role inauditing and royalrevenues 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, theExchequer 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.[64] The court adopted English forms of procedure and had further powers added. This was done in Section 19 of theAct of Union 1707[65]
From 1832, no new barons were appointed; their role was increasingly assumed by judges of theCourt of Session. By theExchequer Court (Scotland) Act 1856 (19 & 20 Vict. c. 56), the Exchequer became a part of the Court of Session. Alord ordinary acts as a judge in Exchequer causes.[66] The English forms of process ceased to be used in 1947.
TheExchequer of Ireland developed in 1210 when KingJohn of England reorganised the governance of hisLordship of Ireland and brought it more in line with English law.[10] It consisted of theSuperior Exchequer, acourt of equity and revenue akin to the Exchequer of Pleas, and theInferior Exchequer.[10] 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.[67][page needed][68] It was managed by its ownChancellor of the Exchequer of Ireland andChief Baron of the Irish Exchequer.
TheCourt of Exchequer (Ireland) existed from about 1299 to 1877. It was abolished under theSupreme Court of Judicature Act (Ireland) 1877 and was merged, along with theCourt of King's Bench (Ireland), theCourt of Chancery (Ireland) and theCourt of Common Pleas (Ireland), into the newHigh Court of Justice in Ireland (now replaced by theHigh Court).[10]
TheCentral Fund, the Republic of Ireland's equivalent of the UK's Consolidated Fund, is colloquially called the Exchequer when distinguished as a component ofgovernment funding.[69]
As well as the principal Exchequer, which sat at Westminster (and occasionally elsewhere in earlier times), there are records of other Exchequers operating in England and Wales. There was one in theCity of London at theCambium (or Exchange), one inCaernarfon in North Wales, and others inBerwick upon Tweed,Carlisle,Chester andDurham.[70] TheExchequer of Chester functioned as part of the administration of theCounty Palatine ofCheshire, the Exchequer of Durham serving likewise for theCounty Palatine of Durham.
From the earliest times and for many centuries the year of account in the Exchequer ended at Michaelmas
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.
Act of Union 1707 at Wikisource.