Consols (originally short for consolidated annuities, but subsequently taken to mean consolidated stock) were

government A government is the system or group of people governing an organized community, generally a state. In the case of its broad associative definition, government normally consists of legislature, executive, and judiciary. Government is a ...

debt issues in the form of

perpetual bond A perpetual bond, also known colloquially as a perpetual or perp, is a bond with no maturity date, therefore allowing it to be treated as equity, not as debt. Issuers pay coupons on perpetual bonds forever, and they do not have to redeem the pr ...

s, redeemable at the option of the government. They were issued by the

Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the English Government's banker, and still one of the bankers for the Government of ...

and the U.S. Government. The first British consols were issued in 1751. They have now been fully redeemed. The United States government issued consols from 1877 to 1930, which have likewise been redeemed. 1877 4% $50 United States Consols

History

In 1752 the

Chancellor of the Exchequer The chancellor of the Exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and head of His Majesty's Treasury. As one of the four Great Offices of State, the Chancellor is ...

and

Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is not ...

Sir

Henry Pelham Henry Pelham (25 September 1694 – 6 March 1754) was a British Whig statesman who served as 3rd Prime Minister of Great Britain from 1743 until his death in 1754. He was the younger brother of Thomas Pelham-Holles, 1st Duke of Newcastle, who ...

converted all outstanding issues of redeemable government stock into one bond, Consolidated 3.5% Annuities, in order to reduce the

coupon In marketing, a coupon is a ticket or document that can be redeemed for a financial discount or rebate when purchasing a product. Customarily, coupons are issued by manufacturers of consumer packaged goods or by retailers, to be used in r ...

(interest rate) paid on the government debt. In 1757, the annual interest rate on the stock was reduced to 3%, leaving the stock as consolidated 3% annuities. The coupon rate remained at 3% until 1888. In 1888, the Chancellor of the Exchequer,

George Joachim Goschen George Joachim Goschen, 1st Viscount Goschen, Privy Council of the United Kingdom, PC, Deputy Lieutenant, DL, Fellow of the British Academy, FBA (10 August 1831 – 7 February 1907) was a British statesman and businessman best remembered for bei ...

, converted the consolidated 3% annuities, along with reduced 3% annuities (issued in 1752) and new 3% annuities (1855), into a new bond, 2% consolidated stock, under the National Debt (Conversion) Act 1888 ( Goschen's Conversion). Under the Act, the interest rate of the stock was reduced to 2% in 1903, and the stock given a first redemption date of 5 April 1923, after which point the stock could be redeemed at

par value Par value, in finance and accounting, means stated value or face value. From this come the expressions at par (at the par value), over par (over par value) and under par (under par value). Bonds A Bond_(finance), bond selling at par is priced at 1 ...

Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...

. In 1927 Chancellor

Winston Churchill Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 Winston Churchill in the Second World War, dur ...

issued a new government stock, 4% consols, as a partial refinancing of the

National War Bonds National may refer to: Common uses * Nation or country ** Nationality – a ''national'' is a person who is subject to a nation, regardless of whether the person has full rights as a citizen Places in the United States * National, Maryland, c ...

issued in 1917 during

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...

Timeline of 2.5% consolidated stock

Final redemption

On 31 October 2014 the UK Government announced that it would redeem the 4% consols in full in early 2015. It did so on 1 February 2015, and redeemed the 3% and 3% bonds between March and May of that year. The final 2% and 2% bonds were redeemed on 5 July 2015. Section 124 of the Finance Act 2015 made the legal provisions for the ending of the consol.Finance Act 2015
s. 124

References in literature

Given their long history, references to consols can be found in many places, including ''

Pride and Prejudice ''Pride and Prejudice'' is an 1813 novel of manners by Jane Austen. The novel follows the character development of Elizabeth Bennet, the dynamic protagonist of the book who learns about the repercussions of hasty judgments and comes to appreci ...

'' by

Jane Austen Jane Austen (; 16 December 1775 – 18 July 1817) was an English novelist known primarily for her six major novels, which interpret, critique, and comment upon the British landed gentry at the end of the 18th century. Austen's plots of ...

, ''

David Copperfield ''David Copperfield'' Dickens invented over 14 variations of the title for this work, see is a novel in the bildungsroman genre by Charles Dickens, narrated by the eponymous David Copperfield, detailing his adventures in his journey from inf ...

'' by

Charles Dickens Charles John Huffam Dickens (; 7 February 1812 – 9 June 1870) was an English writer and social critic. He created some of the world's best-known fictional characters and is regarded by many as the greatest novelist of the Victorian e ...

, ''

Howards End ''Howards End'' is a novel by E. M. Forster, first published in 1910, about social conventions, codes of conduct and relationships in turn-of-the-century England. ''Howards End'' is considered by many to be Forster's masterpiece. The book was ...

'' by

E. M. Forster Edward Morgan Forster (1 January 1879 – 7 June 1970) was an English author, best known for his novels, particularly ''A Room with a View'' (1908), ''Howards End'' (1910), and ''A Passage to India'' (1924). He also wrote numerous short stori ...

, '' Vanity Fair'' by

William Makepeace Thackeray William Makepeace Thackeray (; 18 July 1811 – 24 December 1863) was a British novelist, author and illustrator. He is known for his satirical works, particularly his 1848 novel '' Vanity Fair'', a panoramic portrait of British society, and t ...

, ''

Of Human Bondage ''Of Human Bondage'' is a 1915 novel by W. Somerset Maugham. The novel is generally agreed to be Maugham's masterpiece and to be strongly autobiographical in nature, although he stated, "This is a novel, not an autobiography; though much in i ...

'' by

William Somerset Maugham William Somerset Maugham ( ; 25 January 1874 – 16 December 1965) was an English writer, known for his plays, novels and short stories. Born in Paris, where he spent his first ten years, Maugham was schooled in England and went to a German un ...

and ''

The Forsyte Saga ''The Forsyte Saga'', first published under that title in 1922, is a series of three novels and two interludes published between 1906 and 1921 by the English author John Galsworthy, who won the Nobel Prize in Literature. They chronicle the vici ...

'' by

John Galsworthy John Galsworthy (; 14 August 1867 – 31 January 1933) was an English novelist and playwright. Notable works include ''The Forsyte Saga'' (1906–1921) and its sequels, ''A Modern Comedy'' and ''End of the Chapter''. He won the Nobel Prize i ...

References

External links

Annuity Certificates of the Bank of England Consolidated AnnuitiesCREATING THE CONSOLS- A brief history of the origins of Britain's 3% perpetual bonds
{{DEFAULTSORT:Consol (Bond) Government bonds issued by the United Kingdom 1751 introductions 1751 in Great Britain Economic history of the United Kingdom Public finance of the United Kingdom Politics of the Kingdom of Great Britain zh:金边债券

History

Timeline of 2.5% consolidated stock

Final redemption

References in literature

See also

References

External links