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 ...

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 p ...

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

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 re ...

(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, 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 by

Act of Parliament Acts of Parliament, sometimes referred to as primary legislation Primary legislation and secondary legislation (the latter also called delegated legislation or subordinate legislation) are two forms of law, created respectively by the legislat ...

. In 1927 Chancellor Winston Churchill issued a new government stock, 4% consols, as a partial refinancing of the National War Bonds issued in 1917 during

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

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, ''

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'' by E. M. Forster, '' 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 Satire, satirical works, particularly his 1848 novel ''Vanity Fair (novel), Vanity Fair'', a panoramic portra ...

, '' Of Human Bondage'' by William Somerset Maugham and '' The Forsyte Saga'' 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 ...

References

External links