Great Stop of the Exchequer

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.

Under Charles II the state finances were in such a grievous condition that the crown found itself no longer able to honour its debts. The stop occurred on Tuesday 2 January 1672. Payments were suspended 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 31 December 1672. 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:

The short-term consequences of the Stop were disastrous. Gilbert Burnet wrote that "the bankers were broken, and multitudes who had put their money in their hands were ruined by this dishonourable and perfidious action". This seems to have been only a slight exaggeration: the goldsmith bankers were heavily hit, and some of the most prominent, including Edward Blackwell and Robert Viner, went bankrupt. Danby, the Lord Treasurer, promised them compensation, but this was never forthcoming, leading to a lawsuit, The Goldsmith Bankers case, of almost unheard-of length. Eventually the Court of Exchequer Chamber gave judgment in favour of the bankers, but in 1696 Lord Somers, the Lord Chancellor, reversed the judgment on technical grounds which left a general feeling that an injustice had been done. The King himself came to regret it as a "false step".

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