consols

Consols \Con"sols\ (? or ?; 277), n. pl. [A contraction of
   consolidated (annuities).]
   The leading British funded government security.
   [1913 Webster]

   Note: A considerable part of the public debt of Great
         Britian, which had been contracted in the form of
         annuities yielding various rates of interest, was, in
         1757, consolidated into one fund at 3 per cent
         interest, the account of which is kept at the Bank of
         England. This debt has been diminished and increased at
         different times, and now constitutes somewhat more than
         half of the entire national debt. The stocks are
         transferable, and their value in the market constantly
         fluctuates; the price at any time being regarded as a
         gauge of the national prosperity and public confidence.
         [1913 Webster]
    

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 
consolidated fund. 
     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.