EXCHEQUER BILLS, bills issued at the exchequer under the authority .of acts of parliament, as security for money advanced to the government. They contain an engagement on the part of the government for the payment of the principal sums advanced with interest. These bills form the chief part of the unfunded debt of the country. They were first issued in the reign of 'William III., in the year 1696, and were drawn for various amounts from £100 to £5. At that time they bore interest at the rate of 3d. per day ou £100 (Macaulay's History of England, iv. 700). The interest was reduced to 2d. during the reign of Anne. During the war 1793-1814, the rate of interest was usually 3i-d. At present, it is generally from lid. to 2id. per £100 per diem. Holders of these bills are exempt from all risk, except that arising from the amount of premium or discount they may have given for them. The bills pass from
hand to hand as money, and are payable at the treasury at par. They may also be paid to government in discharge for taxes. When it is intended to pay off outstanding exchequer bills, public notice is given by advertisement. The advances of money to the government by the bank of England are made on exchequer bills. These bills are a con venient means whereby the government can meet a sudden demand for unusual expendi ture. The amount of exchequer bills unprovided for in 1877-78 was £4,593,800. Another portion of the unfunded debt is constituted by exchequer bonds, with fixed rates of interest for definite periods. Between 1877 and 1878 the outstanding exchequer bonds, owing to army expenditure in connection with the eastern question, rose from £7,550,000 to £10,239,200.