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CONSOLS, Eng. law. This is an abbreviation for consolidated annuities.
Formerly when a loan was made, authorized by government, a particular part
of the revenue was appropriated for the payment of the interest and of the
principal. This was called the fund, and every loan had its fund. In this
manner the Aggregate fund originated in 1715; the South Sea fund, in 1717;
the General fund, 1617 and the Sinking fund, into which the surplus of these
three funds flowed, which, although destined for the diminution of the
national debt, was applied to the necessities of the government. These four
funds were consolidated into one in the year 1787, under the name of
2. The income arises from the receipts on account of excise, customs, stamps, and other, perpetual taxes. The charges on it are the interest on and the redemption of the public debt; the civil list; the salaries of the judges and officers of state, and the like.
3. The annual grants on account of the army and navy, and every part of the revenue which is considered temporary, are excluded from this fund.
4. Those persons who lent the money to the government, or their assigns, are entitled to an annuity of three per cent on the amount lent, which, however, is not to be returned, except at the option of the government so that the holders of consols are simply annuitants.