Thursday September 17, 2015
Yale University to collect interest on 366-year-old bond
more stories from this episode
Talk about a long-term investment plan.
Back in 1648, the Netherlands invested in a number of civic infrastructure projects, including the reconstruction of a series of piers. The Dutch Water Authority issued a 1,000 guilder bond to fund the project. At the time, the bond was worth about $500 US. It's believed it was written on goatskin.
But, the real value of the document is that it is transferable and the interest is perpetual. Over the centuries, the bond has crossed hands and oceans. It is currently owned by Yale University. The university purchased the artifact in 2003 and now they are trying to collect on the interest.
"Nowadays a financial advisor would say 'don't do that' because here we are 366 years later and the bond is still paying interest. It's not that much but it actually is still a live document," Timothy Young explains to As It Happens host Carol Off.
Young is the curator of the Beinecke Rare Book and Manuscript Library at Yale University.
Records show that over the years a long list of previous owners have also cashed in on the interest. Tracing the transactions, Young was able to find the Dutch Water Authority de Stichtse Rijnlanden, the current successor to the authority that first issued the document.
He recalls, "I wrote them in January and said 'I think that you honor this bond' and they wrote back 'indeed we do!'"
It's not exactly a financial hit for the agency. Currently the bond pays 11.34 € per year, which Young admits "is not enough to really retire." At that rate, Yale is set to claim a grand total of 134 € and 20 cents.
Young quips, "That will help us buy some new book covers for the library."
He says the real reason for collecting the interest is to keep the bond alive.
"It's in our collections for a teaching instrument because it's very interesting to have a financial document that after 366 years is still viable."
Young calls the document "an archival paradox."
Unlike most outdated or expired archival documents, the bond cannot be filed away for safekeeping.
"We had to scratch our heads for a while to think about how do we catalogue something that is archival but is still alive?"