Exchequer Bill for £100

England, 7 June AD 1720

A note to inflate the South Sea Bubble

Interest-bearing Exchequer Bills were introduced in England in 1696 as a form of public borrowing: they were issued in return for money lent to the government. From the early eighteenth century the bills were accepted in payment of taxes, and could be redeemed at the Bank of England. Many carry several endorsements on the back, showing that they circulated among the public.

The example shown here was part of an issue to lend money to the infamous South Sea Company. Formed in 1711, the Company made fictitious claims to have a monopoly of trade with Spanish America. The unfounded promise of future wealth led to feverish speculation. Thousands of investors ploughed their fortunes into the Company, leading to a huge rise in the price of the Company's stock. However, the market collapsed and the bubble burst in September 1720, just a few months after this bill was issued.

P.L. Cottrell and B.L. Anderson, Money and banking in England: (Newton Abbot, David and Charles, 1974)

G. Davies, A history of money, from ancie (University of Wales Press, 1994)

J. Williams (ed.), Money: a history (London, The British Museum Press, 1997)