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.

This occurred on Tuesday 2 January 1672 (under the Julian calendar in which the year begins in March which was in use in England at the time).

The payments that were suspended by the decree were 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 the 31st of December 1673. 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:

• A total 82 ships were to be prepared for sail "in the cause of national defense", i.e. to attack the Dutch Republic in the Third Anglo-Dutch War.
• The bankers of Lombard Street were asked for an 'advance' (loan) to the king to finance the fleet, they refused to make the loan.
• Due to the pressing need for money the king and his council resolved to find the money for the fleet by cutting other parts of the treasury's budget - money that had been allocated for the repayment of bonds and securities were to be spent on the fleet and only interest paid with no repayment of principal that year.
• There was great disruption and damage to the financial markets: "I believe it certain that the trade of bankers is totally destroyed by this accident".