The Centuries-Old Debt That’s Still Paying Interest

In 1648, the Water Board of
Lekdijk Bovendams needed to repair these
embankments to make sure that this bit of the
Netherlands didn’t flood. For that, they needed money, so they sold a bearer bond. Whoever owned that bond would get a little bit of money
back from them every year. But, unlike modern bonds, they didn’t set a time limit on that. Perpetual debt can be a thing in finance. It’s kind of like selling
stock in a company, but normally perpetual just means until the company fails. But, this company didn’t fail. 3½ centuries later, that
original bond ended up…. GPS: “Take exit 47.” …here, at Yale University in
New Haven, Connecticut, USA, and it’s still paying interest. Perpetual bonds date
back to the Middle Ages. All bonds were perpetual bonds and the fact that bonds actually mature and pay back their principal
is a financial innovation. The flood plains of rivers,
they don’t coincide with state boundaries or city boundaries, so they had separate governments that would oversee the levees. These organisations would
have the power of taxation. Everybody who was protected by a levee would pay taxes to pay for their upkeep. And they would never go to war, so the combination of being able to tax people and not going to war, which usually bankrupts governments, makes that these bonds are still paying interest until today. Tax collections would have
fell short of the budget they needed, so they issued this bond. The water board, which
dates back to, I think, 1328 has been merged in larger
and larger organisations. They have recombined these water boards and now it’s called Stichtse Rijnlanden which pays the interest on the bond. These annotations here are
the annual interest payments that have been taking place since 1648. As you go to the other side, you see that the whole other side is also full with little markings which are the interest payments that have taken back over the years. At some point, the bond was full. There was no more space, and they issued this piece of paper here which is a continued marking
of the interest payments. When Yale bought the bond in 2003, and we collected our interest payment, you see that the last interest payment had been taken place in 1976. So, there was 27 years of
back interest that was due. We left the bond here for 12 years, and then, in 2015, we
collected ’04, ’05, ’06, all the way down to 2015. Well, there was actually
a picture somewhere of me in Holland where I
hold the bond in one hand and I got interest payments for Yale with my other hand as
the bearer of the bond. It’s a little disappointing. The bond initially was for
1,000 carolus guilders. Carolus guilders became
other guilders, I think. They became, now, Euros. At some point, they lowered
the interest payments a bit. So, to make a long story short, every year, we get €11.35 interest payment on this bond. You know, the value of this bond, obviously, is in the fact that it’s live. It’s probably just as exciting for them as it is for us to be
able to present the bond and have an opportunity to pay interest. Now, the Dutch water authority
could probably default on the debt if they wanted to. It costs more than the bond is worth to fly someone over
every couple of decades. And let’s face it, Yale would be unlikely to launch an international lawsuit. But, for about one Euro a month, the Water Authority gets to be part of a weird bit of living
financial history, and get a bit of good publicity
out of it too. It might not be a subscription
they’d take out deliberately, but apparently, for them, it’s worth it. I think they have a
pretty good track record. They sound like a triple-A
organisation to me, and I think we’re going
to be good for a while.

100 comments on “The Centuries-Old Debt That’s Still Paying Interest”

  1. Tom Scott says:

    "Hey, Tom, you know what really gets numbers on YouTube? Videos about financial minutiae." (Prof. Rouwenhorst is spectacularly overqualified for this interview; he's one of the world's leading experts on finance and financial history, and I'm really grateful he was able to take the time to talk about the original bond!)

  2. BoldWittyName says:

    If my guesstimates are accurate, this would have been the same as about $3,000 USD of interest initially, so at say 10% interest, there was maybe $30,000 USD in today's money worth of work performed?

  3. Blue Square says:

    How much money has been paid out over the lifetime of the bond?

  4. JAW says:

    That’s actually crazy, kinda cool

  5. Miss Korah says:


  6. jackgoldman1 says:

    As if Yale and Harvard need the interest payments. These institutions could stop charging tuition and still exist for 100 years. The words "child abuse" come to mind. Financial child abuse but none the less child abuse.

  7. Floyd Looney says:

    How many of those were issued, how many are still extant and still collecting?

  8. Sol Invictus says:

    credit score: 20000

  9. Lana says:

    I think it should be null and void at this point. Seems like a publicity stunt now.

  10. downhilltwofour00 says:

    Very interest…ing!

  11. pi namaste says:

    I have a story about a Canadian debt that is still paying crazy interest since 1919.
    After the Second World War the CROWN Inc, trustee in bankruptcy of North America, approached Canada with an offer. We will lend you the money to pay your war debt And there is no need to pay the principal, ever. But! You pay the interest in gold. Leadership of The moment took the deal. To this day the government Of Canada borrows the money to buy the gold to pay the CROWN Inc it's interest on a deal cut in 1919.
    " deep blink with choking swallow sound followed by a gasp then deep sigh".
    If anyone can refute this, I'd love to hear you out.

  12. Harry Knows says:

    Well I learned something today. !

  13. Tony Andrade says:

    I can only speculate without looking that old document, but it looks like it was never updated when the old money turned from its form to euros, which I would say would nullify the document, and render it useless, but as I said before… this is without seeing it in person.

  14. gregorixo says:

    Really interesting, thanks!

  15. fig11us says:

    ah water boarding

  16. David Lyle says:

    I am glad that some one mentioned that defaulting could have an effect on the credit or bond rating. It is advisable to retain your oldest credit cards for the same reason. I'm just thinking how interesting it would be to put the Dutch levy authorities credit report. "During the dissolution of these countries we paid….."

  17. ugh3012 says:

    Great story and history. Amazing.

  18. nikolasao says:

    Meryl Lynch was AAA too hahaha

  19. HighHoe Kermit says:

    From your thumbnail, I genuinely thought you were Yvette Fielding!

  20. TheSphongleface says:


  21. Romullus says:

    sooooooooo, why are you touching this with your hands? I guess you want the acid to destroy it? I'm sure they would love for that to happen and no longer have to pay.

  22. Bob The Builder says:

    How many living perpetual bonds are still around?

  23. Jeff inToronto says:

    I wish you disclosed the face amount and interest rate too.

  24. Eric Woytasek says:

    Maybe it's time to pay back the principal and end this.

  25. Jeroen says:

    Okay, Youtube. I clicked on it. Now what?

  26. Adrian Tallpoppy says:

    so cool !

  27. 3DPeter says:

    the sea doesn't dare to mess with Holland, because as soon the sea would dare to enter holland, we just throw rock, sand and mud at it and bury it alive!
    In holland the land doesn't get flooded with water but the water is getting flooded with new land!

  28. Llard Fortran says:

    you play a mean sax mr. scott

  29. David Mundschau says:

    This is one of the dumbest things I've ever come across. But I digress. I believe everyone has the right to do whatever. Just don't do it near me.

  30. Trumpenstein says:

    Using a VPN server in the UK is by far my worst internet experience. Such obnoxious hyperbole and narcissistic arrogance.

  31. Benf j says:

    What about the US debt

  32. mrblack888 says:

    It goes to show how ruinous inflation has been as how much wealth has been quietly stolen by governments over the many years.  That what would once have been a very comfortable income for a large company is now pocket change that wouldn't buy a decent lunch.

  33. Vorpal Bite says:

    Typical of Leftist Scum, refusing to honor their contract

  34. Frankie Teague says:

    Your at yale and talking like that…….hmmmmm.

  35. borednow says:

    so how did this dutch bond end up in yale?????

  36. Zak Louborg says:

    why is this guys skin yellow looking?

  37. Don Lee says:

    the problem with this bond is that it's not a compounding interest, so over the years. 10 quid 300 years ago would be about 1500x as much purchasing power as of today.

  38. random consumer says:


  39. random consumer says:

    HA! 11 bucks XD

  40. StarWarsomania says:

    "Never went to war"

    Um, WWI and WWII anyone?

    Even if I'm wrong about WWI, I KNOW the Nazis occupied the Netherlands.

  41. cerial killer says:

    Who else Is watching this video exactly 2 years later?

  42. EenBijVoegelijkNaamWoord says:

    How old is this guy ? 20, 50 ?

  43. Jay Head says:

    This is exactly why our societies are fu*ked, bankers make up 'rules' that get enforced whether they are right or wrong, then the poor get taxed to pay off the debts of the rich. Look at the illegality of income tax, and how much governments make, yet never give back. Their in the biggest gang we've ever seen, and we're just slaves to the 1%.

  44. Yan Yu says:

    this is a trojen horse to justify some nebulous bonds to keep bending over the tax payers perpetually this merely serves to give it the pretext of law.

  45. CHILL FROST says:

    One mighty bond. 😣

  46. Clyde Lovett says:

    I want my share of the bonds.

  47. The GovNer says:

    Bank of America: We have reviewed your near 400 year credit history and we are happy to inform you we can give you a $5,000 loan at 99% interest.

  48. Ananda Mañana says:

    The ultimate consul.

  49. Layput says:

    The history pays this bond several times over the amount of what Yale actually gets in payment.

  50. Donald Duck says:

    Accounting is the science of counting beans. Finance is the science of pulling new beans out of your ass, violating the law of conservation of energy. Are you on BitChute?

  51. Magma Fang says:

    11$ ??

  52. Sillius Soddus says:

    Hol would be proud.

  53. Quagigitymire says:

    Perpetual debts along with the loaning of state-backed currency by corporate entities (mainly referring to how the American people pay the federal reserve, a non-government institution, a rate of interest or a rental fee {call it whatever you want} for the privilege of having/using our currency on a per-dollar basis) comes off as utterly corrupt and in the minds of many immoral even.

  54. Fog says:

    Sounds like a nightmare financial decision for a company. Let’s pay interest, forever. Nope!

  55. Klaas Vaak says:

    a good organization? well half of netherland trusts their life to de waterschappen so i hope they are good indeed ;P

  56. The Comment says:

    *cough cough

  57. G P says:

    Image this bond with payment terms in gold and the possibility to reinvest yield. The Netherlands could be bankrupt by now!

  58. Adspace Control says:

    Yale University including this professor and the rest of the faculty can tongue wash my fart box. And you, Tom, can nibble on my taint a little bit while your down there as well.

  59. 8Epic8 says:

    but wouldn't they eventualy pay it off

    a bond sounds like a loan

  60. Nate Jones says:

    1:50 — for goodness sake; DON'T touch that with your bare hands!

  61. kvnmcinturff1 says:

    Hey, I have a bond issued by the Pharaoh of Egypt for the building of one of the Pyramids. What do you think the interest is worth? 😁

  62. G Cooper says:

    My student loan… no?

  63. ArtemisScribe says:

    It's like there's various buildings in London that have had the same organisations living in them for centuries and the rental agreement has never changed. I think one of the City Guilds pays the Crown a "rent" of something like fifteen iron nails and twelve horse shoes every year.

  64. Ken Skater says:


  65. lindsey607 says:

    Perpetual bond = BRILLIANT!! Like having a money tree in your back yard.

  66. Ray Vanhem says:

    So 15 century and why USA involved?

  67. John Robertson says:

    Funk off

  68. oof oof says:

    Why does it still need to be paid, I mean having a bond going on for 300 years sound completely idiotic

  69. Noah Oh says:

    Colleges: hold my beer

  70. ohmyafy says:

    Waterboarding at Guantanamo Bay sounds cool if you didn’t know what it meant.

  71. Irfan M says:

    Is this not unethical and unreasonable???
    Interest paid here is 50x more than the Principle, yet they are still paying it.
    Just imagine if a person takes a loan for a house on interest and keeps paying interest 50x more than the Principle!!!!

  72. John O'Neill says:

    Laughs in student loan

  73. Brian Stallings says:

    finally! a water boarding story with a happy ending!

  74. Everett says:

    300 year old company has to have a good record system! WOW!

  75. Christian Kroemer says:

    You know crazy stuff is happening when the lifetime of payments are exceeded by the lifetime of the actual flipping currency.

  76. zidan40o0 says:

    This is what usury is like.

  77. Ricky Bobby says:

    I’d love to hear what Yale paid for the bond. My guess is it will take another 350 years to break even at 11 euro per year.

  78. Comrade Dan says:

    That document preparer was very well equipped

  79. Ridz says:


    The floor is lava

    👇 like if you survived

  80. Travis Rabble says:

    No one cares about this you dweeb

  81. FlashMeterRed says:

    yeh but what was the initial value, and whats been collected on it?

  82. weckar says:

    Travels half the world, still finds an incredibly thick Dutch accent.

  83. TheDutchWolfx says:

    Even now, 2 years later. after watching this vid like 5 times over the years. I can still get sad over the fact that Tom was probably so close to my house and I never got a chance to say hi.

  84. Simon Poulsen says:

    How did they determine the exchange rates for dead currencies?

  85. daniel c says:

    hi Tom i have bearer bonds from 1931 its there any chance to claim the interest ?

  86. blah deblah says:

    Paul Krugman is a liar.

  87. amtree 86 says:

    I guess you could say….


  88. NetAndyCz says:

    Damn, our rulers just collected extra tax if they needed more money. No perpetual bonds.

  89. Mark Harker says:

    For anyone interested the british government recently bought out a couple of perpetual bonds from the Napoleonic wars and a bunch of other old wars. The government office was tired of paying out the debt so they paid the bearers a lump sum and took the bonds back.

  90. Calvin Jenkins says:

    Where my CT people at

  91. Herb Dean says:

    The only appropriate way to spend that money is whoever gets to go to pick it up gets to go to space in Amsterdam on the way home with the cash. Best work holiday fuckin' ever

  92. Adomas B says:

    You mean student loans?

  93. Brexit Britain says:

    Why don't they turn around and say F-off?

  94. James Ray says:

    Usury used to be illegal, intrest was illegal. zj,e w banking cabal has taken advantage of this, we should abandon the current currency system and ignore all debt to zj,e w creditors.

  95. Tony Grimes says:

    And I'm over here struggling to get the $20 bucks my friend owes me…

  96. Paguo says:

    wtf, how much money was borrowed?

  97. Dave Davis says:

    Heck, the bond as a historical item, is probably worth more than the bond, itself.

  98. Harm van Barneveld says:

    For clarification, a water board is not an actual part of the Dutch government. It is a different organisation which gets controlled by the government to supervise their actions. The funding of all the water boards in the Netherlands (21 now, 6400 back then)is payed by the people. The government has no part in all that. So indirectly I am paying a small amount of that 11,35 because I live in the boundaries of that water board.

  99. Arieh Marks says:

    If only all European nations were as reputable as this. After the war Swiss banks decided who's savings accounts they would honor and who's accounts they would steel; Some people weren't "good enough" to receive their savings back. Swiss banks simply stole their money. Decades later the banks finally repaid the money that they had stolen, but only because they were forced to do so by international pressure.

  100. Rooster says:

    rubs hands Jewishly

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