consolidated into one, the balances only at the two banks being shown separately.
Operations affecting the exchequer are regulated by the Exchequer and Audit Departments Act 1866. Section 10 prescribes that the gross revenue of the United Kingdom (less drawbacks and repayments, which are not really revenue) is payable, and must sooner or later be paid into the exchequer. Section 11 directs that payments should be made from the fund so formed to meet the current requirements of spending departments. Sections 13, 14, 15 lay down the conditions under which money can be drawn from the exchequer. Drafts on the exchequer require the approval of an officer independent of the executive government, the comptroller and auditor-general. But the description of the formal procedure required by statute cannot adequately express the actual working of the system, or the part it plays in the national finance. The simplicity of the system laid down by the act of 1866 has been disturbed by the diversion of certain branches or portions of revenue from the exchequer to “Local Taxation Accounts,” under a system initiated by the Local Government Act 1888, and much extended since.
While the exchequer is, as already stated, the central account, it is not directly in contact with the details of either revenue or expenditure. As regards revenue, the produce of taxes and other sources of income passes, in the first instance, into the separate accounts of the respective receiving departments—mainly, of course, those of the customs, inland revenue and post office. A not inconsiderable portion is received in the provinces, and remitted to London or Dublin by bills or otherwise, and the ultimate transfers to the exchequer are made (in round sums) from the accounts of the receiving departments in London or in Dublin. Thus, there are always considerable sums due to the exchequer by the revenue departments; on the other hand, as floating balances are (for the sake of economy) used temporarily for current expenses, there are generally amounts due by the exchequer to the receiving departments; such cross claims are adjusted periodically, generally once a month. The finance accounts of the United Kingdom show the gross amounts due to the exchequer from the departments, and likewise the amounts payable out of the gross revenue in priority to the claim of the exchequer. On the expenditure side a similar system prevails. No detailed payments are made direct from the exchequer, but round sums are issued from it to subsidiary accounts, from which the actual drafts for the public services are met. For instance, the interest on the national debt is paid by the Bank of England from a separate account fed by transfers of round sums from the exchequer as required. Similarly, payments for army, navy and most civil services are met by the paymaster-general out of an account of his own, fed by daily transfers from the exchequer.
This system has two noticeable effects. Firstly, it secures the simplicity and finality of the exchequer accounts, and therefore of all ordinary statements of national finance. Every evening the chancellor of the exchequer can tell his position so far as the exchequer is concerned; on the first day of every quarter the press is able to comment on the national income and expenditure up to the evening before. The annual account is closed on the evening of the 31st of March, and there can be no reopening of the budget of a past year such as may occur under other financial systems. The second effect of the system is to introduce a certain artificiality into the financial statements. Actual facts cannot be reduced to the simplicity of exchequer figures; there is always (as already explained) revenue received by government which has not yet reached the exchequer; and there must always be a considerable outstanding liability in the form of cheques issued but not yet cashed. The suggested criticism is, however, met if it can be shown that, on the whole, the differences between the true revenue and the exchequer receipts, or between the true (or audited) expenditure and the exchequer issues, are not, taking one year with another, relatively considerable. The following figures (000’s omitted) illustrate this point:—
| Year. | Exchequer Issues. |
Audited Expenditure. |
Difference. | |||
| 1888–1889 | £85,674 | £86,070, | £+396 | |||
| 1889–1890 | 86,083 | 86,033 | − 50 | |||
| 1890–1891 | 87,732 | 87,638 | − 94 | |||
| 1891–1892 | 89,928 | 90,125 | +197 | |||
| 1892–1893 | 90,375 | 90,164 | −211 | |||
| 1893–1894 | 91,303 | 91,530 | +227 | |||
| 1894–1895 | 93,919 | 93,813 | −101 | |||
| 1895–1896 | 97,764 | 97,667 | − 97 | |||
| 1896–1897 | 101,477 | 101,543 | + 66 | |||
| 1897–1898 | 102,936 | 103,010 | + 74 | |||
|
£927,191 | £927,593 | £+407 |
| Year. | Exchequer Receipts |
Actual Revenue. |
Difference | |||
| 1888–1889 | £88,473 | £88,038 | £−435 | |||
| 1889–1890 | 89,304 | 89,416 | +112 | |||
| 1890–1891 | 89,489 | 89,282 | −207 | |||
| 1891–1892 | 90,995 | 91,428 | +433 | |||
| 1892–1893 | 90,395 | 90,181 | −214 | |||
| 1393–1894 | 91,133 | 91,265 | +132 | |||
| 1894–1895 | 94,684 | 94,873 | +189 | |||
| 1895–1896 | 101,974 | 102,031 | + 57 | |||
| 1896–1897 | 103,960 | 104,089 | +129 | |||
| 1897–1898 | 106,614 | 106,691 | + 77 | |||
|
£947,011 | £947,294 | £+273 |
| Year. | Exchequer Accounts |
Diff. between Actual Rev. and Aud. Exp. |
Difference. | |||
| 1888–1889 | £2,799 | £1,968 | £−831 | |||
| 1889–1890 | 3,221 | 3,383 | +162 | |||
| 1890–1891 | 1,757 | 1,644 | −113 | |||
| 1891–1892 | 1,067 | 1,303 | +236 | |||
| 1892–1893 | 20 | 17 | − 3 | |||
| 1893–1894 | –170 | −265 | − 95 | |||
| 1894–1895 | 765 | 1,055 | +290 | |||
| 1895–1896 | 4,210 | 4,364 | +154 | |||
| 1896–1897 | 2,473 | 2,546 | + 73 | |||
| 1897–1898 | 3,678 | 3,681 | + 3 | |||
|
£19,820 | £19,696 | £–124 |
The third column in the above shows the price which has to be paid (in the form of discrepancies between facts and figures) for the simplicity secured to statements and records of the national finance by the present system embodied in the term exchequer. Probably few will think the price too high in consideration of the advantages secured.
The principal official who derives a title from the exchequer in its living sense is, of course, the chancellor of the exchequer. He is the person named second in the patent appointing commissions for executing the office of lord high treasurer of Great Britain and Ireland; but he is appointed chancellor of the exchequer for Great Britain and chancellor of the exchequer for Ireland by two additional patents. Although, in fact, the finance minister of the United Kingdom, he has no statutory power over the exchequer apart from his position as second commissioner of the treasury; but in virtue of his office he is by statute master of the mint, senior commissioner for the reduction of the national debt, a trustee of the British Museum, an ecclesiastical commissioner, a member of the board of agriculture, a commissioner of public works and buildings, local government, and education, a commissioner for regulating the offices of the House of Commons, and has certain functions connected with the office of the secretary of state for India. The only other exchequer officer requiring mention is the
