A rare £10 million Bank of England Treasury bill will be offered at auction Sept. 29 by Dix Noonan Webb.

It is the first time that a Treasury bill with such a huge face value has come onto the collectors’ market, according to the auction firm.

The Treasury bill, which promises to pay the bearer £10 million, but is stamped “CANCELLED,” is estimated to bring up to £15,000 ($24,200) in the sale, according to the firm.

“This is a piece of British financial history,” says Christopher Webb, head of the bank notes and coins department at Dix Noonan Webb. “We recently sold a £1 million Treasury bill at auction but this is the first £10 million bill to come onto the market.”

The last bills were produced in September 2003, including the one to be auctioned, which was given to a leaving government official as a retirement present after the bill was stamped “CANCELLED,” according to the firm.

Treasury bills

“The bill is a survivor of a cash management system that helped keep the British government’s finances afloat for decades,” according to the firm.

“Until just over a decade ago such notes were issued every week in the City of London under a secretive system which enabled the British Government to manage its short term borrowing policy and make sure that sufficient funds were always available to meet any net daily cash shortfall,” according to the firm.

“Financial institutions bought the bills, discounted for less than their face value, lending the money to the government until the maturity date,” according to the firm.

Mugger takes bills

Aside from the economics of the system, Bank of England Treasury bills had a starring role in what is still described as one of Britain’s biggest robberies.

On May 2, 1990, 58-year-old John Goddard, a messenger with one of the London money brokers, was mugged at knifepoint in a quiet side street in the London.

The mugger took 301 Treasury bills and certificates of deposit, having a total face value of £292 million.

According to an article published in the Jan. 28, 2008, issue of The Guardian newspaper in London, “Keith Cheeseman received a six and a half-year jail sentence for his part in the robbery. Four other people in Britain were charged with handling the bonds, but were acquitted after the highly unusual step of offering no evidence was taken at ... the opening of their 1991 trials.

“Police believed the City mugging was carried out by Patrick Thomas, a petty crook from south London. Thomas, who was found dead from a gunshot wound to the head in December 1991, was never charged with the robbery,” according to The Guardian article.

The police recovered all but two of the 301 bonds, thanks to an informant, the article stated.

For more information about the £10 million British Treasury bill, send an email to the auction firm.