The centuries-old debt that's still paying interest
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- čas přidán 24. 08. 2024
- In the archives of Yale University, there's a 367-year-old bond from the water authority of Lekdijk Bovendams, in the Netherlands. And it's still paying interest.
Thanks to:
Prof. Geert Rouwenhorst for his time and explanation
All the team at the Beinecke Rare Book and Manuscript Library
Michelle Martin / @onthecrux for editing the interview
and Leendert van Egmond for telling me about the bond!
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"Hey, Tom, you know what really gets numbers on CZcams? 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!)
jaa
Tom Scott hi tom u are da best
Tomaatti Pelaajat what? What? What?????
Tom Scott at least it's a safe-ish bet that CZcams won't demonetize this video
I love that he thinks the people paying interest feel so excited about it! Surely they'd be the only people in history who actually like paying interest to a huge institution...
Paying interest for nearly 400 years, thats a pretty good credit history.
ArmouredSpacePony
Well, unless it’s tulips.
Ha, but they check their credit and it says "length of accounts...ok"
Moody's Aaa rated.
Well they did miss 20 years of payment
@@tylervandall7113 It wasn't collected, so they didn't pay obviously.
One detail I've always been impressed by: the extension paperwork was issued in 1944. This wasn't a fun time in the Netherlands, but there were commitments that had to be honoured.
so the nazis were the ones who made the paperwork xD
@@qfcbv Although the Netherlands was under Nazi occupation at the time most government offices, especially those not concerned with war & security, kept being run by the same people that had run it before the war so it'd be more accurate to say Dutch people made it under Nazi supervision
"im under nazi not fun"
After you get off from my country after 350 years
at this point they're probably both just like "lets just see how long we can keep it going....." locking down that spot in the Guinness Book
"The Longest Running Bond", also "The Oldest Bond Still Running". Two spots!
@@PanduPoluan Thats the same. if u have oldest running, its automaticly longest
@@Devit42 Nah, because a bond that lasted for 500 years could no longer be active but this one would be the oldest one still running.
good point
@@TurudesRavenholt But it literally say the same thing they're both still running as stated it's not the "Oldest Bond" it's "The Oldest Bond STILL RUNNING"
Who else was thinking, this is outrageous until you get to the part where you find out it €11.
Then you're thinking, it would be a shame if this ever stopped!
Not really. It is really inflation that took care of paying off the debt in the end.
Me, same
@@AndreSomers what are you "not really"-ing?
@@Strauss- i'm assuming that back then, 11 euros was a relatively massive amount of money, but because of inflation, it isn't much anymore
@@dubious_potat4587 11 guilders, each about an ounce of silver. That oughta have been worth quite a lot
"whats your credit history like?"
*well sir i have been paying my dept on time for the past 367 years*
oh
*AND IT KEEPS GOING*
Just like student loans
Um... They didn't pay on 2003 until 2015... Technically there is no "on time".
Highlander credit score.
Sorry unfortunately your credit application has been denied.
> How to make 11,35€ per year without working!!! <
bankers hate him for this trick!
Hahaha, i hate those ads
Hahahahaha 😂😂😂 im dead 🙌🏿🙌🏿🙌🏿
The Lannisters and the Dutch always pay their debts!!!
Imagine holding 4000 similar bonds
11.35€*
US citizen living in the Netherlands here. I don't get to vote on anything, except for my water board! It's not about citizenship but being protected by the waterworks, which I find super interesting!
I'd argue that it should be like that everywhere. If it affects you, you get to vote on it (or it's executives).
@@leftleanin6649 I'd go a step or two farther and replace taxation with subscriptions. If we just let people affected by something vote for it, they'll almost inevitably vote to take from other people for their own benefit.
@@leftleanin6649 Trouble is, most people don't really understand the issue they vote on. Their vote is influenced by promised financial gain and charismatic 'experts' and who can get the most press. I agree with what you said, but voting isn't the pure activity you think it is.. In Massachusetts, at least, only a third off the issues that get the most votes in a referendum every get instituted. It's simply gives people the illusion that they have some sort of power.
Its about tax collection. Since water boards get to collect their own taxes, they are required to let people vote on the management. If they stopped collecting taxes, that right to vote on the seats of a water board would stop aswell.
@@Twiggy163 actually no, because the state also collects taxes (most notably on income) from non-citizens while not allowing them to vote.
It was a nice touch have the Dutch guy at Yale explain it to us. And a quick reminder for everyone that New Netherland was a Dutch colony settled in parts of New York, New Jersey and Connecticut (where Yale is)... just so the connection makes a little more sense.
I know, I'm super late, but just that guy here saying that It was called New Amsterdam I think, not New Netherlands
@@pianoplayer2014 New York used to be called New Amsterdam, specifically.
New York City (which at the time was more or less just the southern tip of Manhattan) was called New Amsterdam, the much larger colony was New Netherland.
@@bobsnow6242 yes. One of my original ancestors from the van vorhis family settled in the flatlands (Long Island) in 1621. Big Dutch presence
You can see it with a lot of placenames around NYC.
Bedford-Stuyvesant, Bergen, The Bronx (from Bronck's River), Brooklyn (from Breukelen), the Catskills (Dutch kat +kille - cat + riverbed), Bushwick, etc etc
And families like the Roosevelts are descendants of the original Dutch settlers
The name's Bond. Perpetual Bond.
No, I don't expect you to die, Mr. Bond; I expect you to live forever!
No Mr. Bond. I expect you to pay!!
That's the type of commentary that makes me pay the internet bill haha
god dammit I knew where this is going and it still made me laugh
So Mr Bond we meet again....and this time the interest is MINE!
Before I saw the numbers, I thought that with 300 years of interest behind it, the debt payments would be huge. Instead, we got a story about a small fun thing that's lasted longer than the United States.
A lot of things have lasted longer than the United States, frankly. I live in a house that's older than the United States...
+JNCressey
Yes, the New Washingtonian Republic of States takes over in the ye… *_[LOST TRANSMISSION]_*
"that's lasted longer than the United States" is a perfectly cromulent phrase.
I was thinking, only The Netherlands would be so neat to still pay for such an old bond. But luckily it's only €11,30 each year.
There is a saying I am fond of.
The American things 100 years is a long time.
The Englishman thinks 100 miles is a long distance.
What's interesting is that the original bond only had enough lines to list 295 years' worth of payments. Once 295 years of payments had been made and the bond's log pages were full, the then-bearer of the bond added in a paper addendum to accommodate more payments, which the water authority recognized as valid. Also, Yale policy prevents historical artifacts from leaving their archive unless they're being loaned to another institution, so they cannot take the bond itself with them to collect on it; they can only take the 1944 addendum. Every payment made since Yale got ahold of the bond was on presentation of the addendum instead of the original bond.
They don't need to move the document, the dutch come over to them.
And it is really a historical artifact if it is still an active document?
@@HappyBeezerStudiosYes by dint of it being 300+ years old. The original copy of the 1787 US Constitution didn't stop being the US' constitution just because it is historical nor the docummet to be NOT considered a historical document just because the text on it is still used as the US' constitution. They can be both...
@@theotherohlourdespadua1131 but nobody is writing amendments on the very paper the constitution is written on
I laughed until I realized it's older than my country
Then I laughed harder
Are you from Bangladesh, Eritrea or Djibouti?
@@darek4488 or the U.S.
@@darek4488 or Canada?
It's even older than the Kingdom of the Netherlands, but not as old as Dutch Republic that came before it.
Sadly, with the debt in the US, it's worth more than the US as well. Yikes.
"Here's a 367 yr old piece of paper"
*touches it with his bare hands*
You obviously don't watch Objectivity.
I think they recently found out gloves do more damage to the paper than fingers
In the next episode Edward Scissorhands purchases the bond.
Yes - SSOOOOO This!
It would have to depend on the kind of glove. The last I heard, they used thin cotton gloves thoroughly washed, then rinsed to hell and gone.
I once found a coupon in my parent's garage for 25 cents off two packs of Ore Ida potatoes that was from 1986. It explicitly said "no expiration date" on the side, so I brought it to Publix and yeah, they actually took it. I don't know if they had any trouble actually sending it to Ore Ida but I definitely got 25 cents off what inflation turned into $5 of potatoes
You should have kept it. It probably was worth more than 0.25 as a collectible, and would have appreciated in value.
so geekie im beating of to this story
Eric Peterson you should have made a video about it
25 % or 25 cents?
At that time, the bag cost $1.00. Pay only 75 cents.
To be correct, the interest payment wasn't lowered. The currency changed from Florijnen or Gulden (guilder) to Euro. Which turned fl 25 into EU 11,35.
According to some articles the bond would pay 5% interest in perpetuity. But the interest rate was reduced to 3.5% and then 2.5% during the 17th century.
@@juandenz2008
So the bond only costs 227 Euros at the start?
They need to make the water bureau the world's only AAAA organization
Dutch water authority goes to the bank "We need a loan" "Have you taken out any loans in the past" "Well let me tell you a story..."
Just casually paying our debt on time for 350 years bank that probably didn't exist back then " oh wow you have a great credit history of paying on time here's your small loan of one million dollars you can pay it back 500 dollars a month for 2,000 years deal ?
@@kurtpunchesthings2411 Inflation ruins everything. 1000 guilders is the notional interest on the debt. A guilder back in 1648 was somehere between 20-30g of silver and just the metal value of that would equate to 10k per year now. Not to mention the relative scarcity of silver has dropped because back then the best silver mining technology involved enslaving some aztecs and now it involves dynamite, excavators and giant electrolysis chambers.
@@chrish.942 I was making a joke lmao
@@chrish.942 well then, very far-sighted from the medieval plumbers to issue the bond in some fiat money and not gold or silver 😂
😆
That has *got* to be good for their credit rating: "3 centuries of payment, never defaulted."
They're a government in a Western European country. Excellent credit ratings come with the card...
Bank of England is the same (on Gilt securities), since it's formation in 1694
@CluelessKomodoDragon whats not a thing in Europe?
@@aksmex2576 Based on Context clues, I believe they were saying credit ratings weren't a thing in Europe.
Which is just wrong.
@@rjfaber1991 The credit ratings of countries like Italy, Spain and Greece aren't 'excellent'. They are actually quite the opposite.
0:55 This dude has the coolest combination of an American/Dutch accent. You can clearly hear both which is really nice
This rekindled my trust in human kind. I never believed a promise, or a contract, can be kept for centuries. Decent people, decent organization
Fun fact: we just voted last week for the Waterschappen (water boards are a political office in the Netherlands). So some Dutch people (including me! I live in Stichtse Rijnlanden) voted for a body that still pays this bond to Yale, my tax money is going to Yale
Yuniko Yato Brexit is happening in the UK. You have the wrong country!
@@taniaperez3230 Are you being facetious?
@@FrVitoBe a bond is directly between two parties, the payer and holder. Countries have nothing to do with it.
@@taniaperez3230 you really should research your statements before you present them as facts. Simply put, "illegals" are neither illegal nor do they get everything free.
I live in the US and pay federal income tax, Yale receives federal subsidies, so my tax money is also going to Yale. It's like six degrees of Kevin Bacon, except it's six degrees of your money going to Yale
I checked my records and Stichtse Rijnlanden's records and I have calculated that 0.00004% of 2015's € 11.35 was paid by me :)
are you bankrupt now ?
Company: Pays off interest consistently for nearly 400 years
Credit company: Makes an error
Credit score: 278
North Americans: I found this weird "centuries old debt"
Latin Americans: Ever heard about the external debt?
USA is actually the country with the biggest external debt in the world right now
@@diggernick901 But it's the US. Americans aren't poor at all.
HardDropper depends on where you live
@@diggernick901 Possibly. My point was that in Latin America we have been paying for Centuries
Why do i feel like me having 100 dollars at age like six had something to do with that
The craziest way to get €11.35 ever.
bernard Li "This guy makes € 11.35 in only 1 year. People who work for money hate him."
You won't believe what happened next!!
Forgot inflation
bernard Li I want this bond
That €3,405 in just 3 centuries
heyy these are just like student loans
Greetings from Denmark where education is not only free, but you actually get paid if you take enough classes to cover a normal week.
Thor Jørgensen
That's sounds like paradise for a student
thank you, this is why we don't have free college in the US, taxpayers shouldn't be forced to pay for other people's college
Maniac of Doom but maybe we’d have more smart people that can fix that problem if people went to college???
Instead you get to fund Trumps holidays and useless army funds!
Jeff: "Hey Steve, I just watched a video about a way to get someone to pay interest for 350 years"
Steve WONGA: "I've got a great idea for a company..."
Yale's descendants have the same family line of accountants working for them since 1648
Damn, that ~400 year old accountant must really love his job.
@@vizthex can you not read or are you not too bright?
@@hipbubble7685 r/woooosh
@@hipbubble7685 You can read but you're still not too bright are you?!.
@@shootymcshootfacekoff7972 percieving something differently than intended can happen to anyone. Sometimes im not sure someone uses sarcasm and sometimes people around me dont get the hint im being sarcastic but if you wish to go that route you can.
A friend of mine was going through his grandparent's things and found several thousand dollars worth of war bonds frond between 1942 and 1944. The face value of the bonds was something like $4000, but when he cashed them in, he got enough money to pay off his house and STILL had a lot left over.
I'm not sure that's right. Did the Nazis even sell War Bonds? Not everyone did. Most governments are set up to just take whatever money they want, but this wasn't true in the US. The way the Tax Code is/was, the government couldn't just raise taxes, especially back then.
People think that they can (In the US) but really they can't. War Bonds was just a way for the government to barrow the money they needed without raising taxes.
@@erictaylor5462 Apparently Nazis sold war books only to financial institutions. 70% of Nazi war bonds ended up in Czechoslovakian banks.
@@653j521 I have a fifty-dollar savings bond that my grandma gave me in 1985 when I was born :D
@Caner Birgül Are you sure it doesn't tighten value? 😉😂
@@chad_b ;DDDDDDD
1 small correction. They never lowered the intrest payment. They just switched the currency (from guilders to euro's). Euro's are worth a little bit over 2x more than euro's they numerical they get half the intrest in euro's
According to a 2015 news article on Yale's website, the interested was lowered from 5% to 3.5% and lately 2.5%. With "lately" still being sometime in the 17th century. It has nothing to do with the change to Euros.
Good thing the bond was noted in guilders and not weight of gold, which back then was the same thing, but is valued very differently today.
The Dutch waterboards are really interesting. They are pure collective independent governments that have existed only to manage the water for centuries, often since the middle ages.
That's what the video says
We even have separate waterboard elections every four years. They are THAT important.
Meanwhile, in Michigan...
@@dragonofepics7324 Anarcho-syndicalism
ᛏᚨᛗᛗᛁ ᚠᛟᚱᛞᛇᚦᚨ everything is the wrong word, I meant more like things just dedicated to local issues and resources but still with a federal government.
200 years later
"This is the world's oldest human being, and he is participating in a bit of financial history as he makes payment for his student loans" - Robo-Tom Scott Mk. 6
So long as his chassis is painted red, I'm all for it!
Is that a euphemism?
200 years? Let's not be optimistic ;D
Vectored Thrust I
Allen Thomas yeah that's a great idea, and then also not get a job that's pays higher than minimum wage
2:03 - As the years go by, so does the art standards of writing.
From cultured, to pre-school.
3:13 the pure joy on his face over something so incredibly nerdy makes me very happy.
Good thing it wasn't compound interest. The Dutch government would go bankrupt.
Not really because the debt has long since been paid. Also, not even is it not compound interest, it's not interest at all. This is a situation where they borrowed a large sum of money and then agreed to pay it back in small amounts over time. The original debt was voor 1000 Guilders, to be paid back as 25 Guilders per year. So the debt was paid back in 40 years, except that they didn't set an end date. They propably thought that the bond would be lost when the bearer died (life expectancy in those times was around 60 I think?) or perhaps they thought they could renegotiate some years after the debt was paid in full. Or perhaps they didn't think about it at all, which would be kinda dumb in hindsight.
Ah gotcha
Rudy - You are incorrect on every point.
1) It is not interest. Wrong. It is simple interest. The principle value of the bond is 1000 guilders, paying 5% annual interest in perpetuity. (this has been renegotiated)
2) They agreed to pay it back in small amounts over time. Wrong. The bond is a perpetual bond with no repayment date. The interest payments are specified and no repayment of principle is expected.
3) They probably thought... - Wrong. They didn't think any of these things. They knew exactly what they were doing when they issued the bond. They thought that by issuing a perpetual bond they could pay a lower interest rate. The expected end of the bond at initiation was probably: a) that the board would eventually be dissolved or go bankrupt, terminating the bond b) that the bond would eventually be redeemed by the issuer c) that the bond itself would be lost or destroyed.
As the video points out, the value of the bond is now in its legacy, which is why it will, in theory, live forever. The face value of the bond (about 454 euros by my calculation), is practically nothing compared to the market value of an almost unique 350-year old living financial document. The issuing institution (or its successor) gains prestige and free advertising by paying interest on such an old document. Likewise the bearer has no incentive to destroy the note, and maintains its value by collecting the interest every decade or so. No one has an interest in ending the bond.
@juggalo1 I think you are correct, however, isn't the interest 2.5% (25 out of 1000) instead of 5% (50 out of 1000)?
It was initially 5%, and as I noted, it was renegotiated to 2.5%.
Where do fishes keep their money?
In the river banks.
fish*
Nice one Dad.
Där fick du till det.👍😁
@@t900badbot ... definitely a Dad joke.
Yuk yuk yuk
I thought this was going to be much less wholesome.
-What is the credit score of the dutch water board?
-It' s over 9000!
I am not about to add accounting and finance to my already unmanageable collection of obsessive side-interests please
sethraptor yes you are
That's one that could really pay out though.
That's because you already did before you wrote this comment.
Edit: typo
therandomdot
"Where the hell did it say that!?"
"It's in the fine print"
It might be worthwhile to do. John D Rockefeller was obsessive about accounting and finances. He became one of the richest persons in the world ever.
The way English speakers pronounce Dutch words always makes me smile. But in the same fashion, you can immediately hear that Rouwenhorst is a Dutchie trying his best to speak English.
I don't even know where he got lek-duck from? It's almost ironic as Tom knows a decent amount about languages, but somehow he came to the conclusion dijk is pronounced duck?
Rouwendijk did not try to speak english, he spoke american.. as a dutchman living in the UK the american accent hit me way before I noticed his dutch background..
Hey, it's not our fault that your language sounds like the result of a drunken tryst between a German and a viking with a mouthful of marbles!
I guess you have a bigger knowledge of this than I have, I have always been taught that American is also English, but that you have American English and British English (I personally prefer the British one, as that is used in the Dutch ed systems)
It depends who you ask. The Americans think that there's such a thing as "American English"; the British know that there isn't.
Another interesting story is the story of te English flag. It is originally the flag of the city of Genova (Italy) and the British crown asked the permit to use it under the payment of an annual fee. At some point the English guys stopped paying but the contract is still valid. You can find a lot info about this story in the Annales Januensis of 1190.
🤓
There's a saying in England. Where there's boards, there's payments.
Now this is content I come to CZcams for
Take a shot every time someone says "bond"
Don't play that game if you find 007 BDSM fan fiction, that seems lethal.
I tried this and now Im blind.
But shaken, not stirred.
Alcohol poisoning
You mean like a gunshot a la James bond?
I love this. Having the actual document with an expert is excellence.
I found some food stamps in my grandma's drawer one time like actual stamps, and I took them to Adam's corner store next door where the owner was our landlord. And I took some snacks and drinks and put them on the counter and handed them the stamps for the total and walked out. And this was way after they started using ebt cards... smh. They let me go and I never heard anything about it until my grandma got drunk cackled the story out to everyone on Xmas.
Green stamps different
You should do a video about the Dutch waterboards in general, as they are quite a bunch of unique institutions on their own.
They absolutely are.
Yes. The waterboards are a very interesting type of government.
@anonymous one it's not waterboarding if you use gasoline ;)
How do you always find such nice people for your videos?! This guy's enthusiasm is infectious.
"The centuries-old debt that's still paying interest"?
That would be ANY department store credit card.
This discusses a dutch perpetual bond,
I am aware from business school in 2007, that in the UK there is also an ancient perpetual that still pays dividend. They keep it also alive because of it being so special.
So about €4000 give or take has been paid in total over all that time?
You can imagine the disappointed time traveller realising their mistake in not choosing an investment with compound interest.
+
Indeed, but you'd have had most of those payouts centuries ago and could still have invested it elsewhere, with compound interest. And then it's just gambling. If interest would have been 1% all that time, by now you would have ~44K euro if you had the bond and invested the payouts, and only ~18K if you had taken the interest straight up. At 5% the straight investment would be almost exactly 100% more profitable than the bond - ~31.4 vs ~15.7 billion(!). At a stable 2.4997305165% interest since 1648, both strategies would be equally profitable in 2017, getting you 4,209,720 euro and 71 cents today. And yes, I'm in this video's target demographic.
It likey paid out more back in 1700's
Well, the bond is for just 1200 fl. or €544.54
At 1:41, I can read the cost of the bond was fl.1000 (453.78 euro) and a yearly payout of fl.25 (11.34 euro).
Prof. Rouwenhorst is not only brilliant (check out his book, "The Origins of Value") but incredibly charismatic as well! That's a winning combination in a professor I'd say. Great video as always, Tom!
+
Nothing like this would have lasted this long in the US. Any entity issuing such a bond would eventually over such a lengthy amount of time have some sort of event happen(whether fraud or mismanagement) causing it to file for chapter 7 bankruptcy thus liquidating assets snd settling the debt for pennies on the dollar.
that probably the single greatest advertisement ever, a debt as old as many countries still being paid to this day
For Yale, it's also an opportunity to mention to law and business students, be careful when drafting contacts.
Wow. I mean, if they were to say "No, I'm not paying this anymore." then, who would really care? But the sheer publicity they get from continuing to pay it... Just wow.
They still have to market their bonds and securities. I'm sure the amount they pay in commissions to market their bonds dwarfs the interest they pay on this bond.
Not many Dutch people know of this of course since it's old history, but nearly all of the ones I've spoken to agree that it's awesome that there's something that was started so long ago and is still running.
It's so cool
The water boards still fulfil the same purpose they fulfilled back then, and they will continue to do so in the future. Even more so with global warming and rising sea levels.
Now, when will the dutch start building a giant dome over their nation to hold the world's biggest submarine fleat?
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....."
Are there any levy bonds on the Thames river? Then you could say "Bond, Thames Bond."
Booo! :D
Would they pay £0.07?
But it'd be pronounced "Tims Bond" so it doesn't really work
Thames is pronounced 'Tems' not 'Tims'
Tringolew I'm from West Texas and I speak with a not so subtle southern drawl, (think Tommy Lee Jones or Matthew Mcconaughey). With my accent, "tem" and "tim" are pronounced the exact same. It's closely related to a phenomenon called the "pen-pin merger" in linguistics, which you can research if you need more in depth explanation. I guess what I'm saying is, you're right, it is pronounced "tem"... and also "tim"... at least for some of us southern folks.
The funny thing is, the Dutch debate over nearly everything when it comes to payments and taxations. But whenever there is a levee that needs raising or maintenance we don't.
The whole watermanagement system is essential to our collective survival so we never ever skimp on that.
woestewouter96 your politicians should learn tricks from Californians. We vote yes for road taxes (something we are dependent on) and the politicians just redistribute the funds wherever they like! Then we vote another gas tax trying to get our roads repaired. Always yes on the roads haha.
Our dikes on the lower Mississippi River could use some Dutch management!
I think this is my favorite video on OPs channel. And there are many great ones to choose from.
I'm surprised Beinecke allowed him to handle the bond without conservator's gloves.
I missed you. I'm glad you showed up on my feed. For the past three years I've been looking for you but I didn't know your name. And then today, you show up on my feed. How great is that?
I once saw a short news story about a windmill being relocated in the Netherlands. A clerk from the local council went on site. Set up a table and chair. And when the windmill as a whole was lifted by a crane, he signed a piece of document that now the windmill is not part of real estate, rather it's movable goods. :) that was awesome as well.
When a piece of paper from 3 centuries still has ink
But you get a new receipt and the ink is already faded to the point you can’t read the order
Name’s bond, perpetual bond
🤣🤣🤣
I want to reach the age where paying 1 dollar a month in interest is a fun activity.
The joys of aging. You, too, may one day be so fortunate.
When you are rich enough, and your spending is small enough, paying bills becomes a pleasure.
I like how at 2:33 when he's describing the picture of collecting the debt the camera clearly pans over to allow space for the picture to be edited in, but they couldn't find the picture.
The absolute shock I had having not read the description when I saw the exit to New haven. Checked my closet just to make sure Tom wasnt there
This is part of why it was illegal in some places to charge interest and was looked down upon all over the world. Its dirty, dirty, dirty and is objectively an evil practice.
Fascinating. Especially interesting to hear another weird aspect of how people used to think differently about things: "Every bond was a perpetual bond. The fact that bonds now eventually pay off their principal was a financial innovation." That was a real WTF moment for me. More so because although I knew interest went back a long way, one always hears of how medievals at the very least distrusted it or conceived of it as a very different thing if not outright condemning it. When thinking of a bond or a debt, the idea that one would just keep paying interest forever and that paying off the principal wasn't a thing sounds akin to saying "we've been breathing for millennia but we just invented taking in oxygen". They're the same. And yet there it is.
I was thinking that 4.4K views seemed really low for a Tom Scott video. Didn't realize I'd clicked through within minutes of its posting.
That document is worth millions. It's fitting a university holds it, while gouging students for tuition.
Yale paid $27,000 for the bond in 2003. Face value is $509 the rest is historical value.
0:02 Tom has a stroke.
Sound like something a scammer would use.
"Oh don't worry, this bond will pay you forever, invest now!"
Or a witty investor with a generationally linked portfolio managing LLC and family dynasty creation in mind.
Technically the Euro is not the successor of the guilder but the replacement. The guilder is still governed by the Dutch Central Bank while the Euro is governed by the European Central Bank. Those currencies have a fixed exchange rate of EUR 1 = NLG 2,20371. So there was not a lowering of the interest.
Also it seems the holder is responsible for collecting and that's only possible by showing the bond on sight. Which explains why their is not interest on back interest. (If it's booked off every year the waterboard might even collect a little interests. Which means Yale should pay the flight costs the Netherlands. Or more likely sent the bond with a professor on a congress or holiday in the Netherlands.
And the Dutch Water Boards or Waterschappen are one of the oldest still working democratic government-institutions in the world. The central and provincial governments have had plans to take over their roles. But a 'living' document like this actually gives the Water Boards a legitimacy by seniority. And a lot of financial students in Yale will become acquainted with the Water Boards.
Successor = replacement. Those are synonyms my dude
It was lowered before the replacement of the currency. It was 5% and then renegotiated at some point to 2,5%.
@@Monochromicornicopia There are no synonyms if you are pedantic enough. For example: would you say the Japanese occupation in WW2 was a successor of the Dutch's? Or rather, a replacement?
The Dutch government should put an end to these perpetual bonds that date this far back and have more than exceeded the initial value. There is no need for this.
Cool! I pay my water taxes to Stichtse Rijnlanden, so I'm paying a small fraction of this bond debt. My yearly water tax bill is around €300, there are about 750000 people living in the water board area, so as you can see, Stichtse Rijnlanden can easily keep honoring this bond, it's a drop in a very large bucket.
The Dutch water boards are very interesting, they are one of the world's oldest still functioning democratic institutions. They tie in nicely to the political, the practical and the engineering world. I think you would be able to make a bunch of interesting video's on them.
60 FPS, so worth it for the action shot of the paper being flipped over around 1m50, so smooth
The paper the bond is written on is probably worth more than the financial value of the bond itself.
The historical document is worth more to a collector than all the interest ever paid on it
It's just a good way to make people aware that waterschapsbelasting keeps their feet dry.
Lekdijk Bovendams - the Lannister among water authorities
I think he's referring to the fact that "the Lannisters always pay their debts". A common misconception; their actual words are "Hear me roar".
I dont know. Bronn is still waiting for his castle and pretty noble wife.
Don't know why this video was recommended to me now, but there's something similar in Germany: The catholic church still gets interest payments from the city of Trier for a 430 years old bond from 1589. Dietrich Flade had lended the city 4000 gold florins but was accused of sorcery, enhanced interrogated, strangulated and burned. His assets and so his bond fell to the church. Till today the city pays 362,50 Euro (about 400 USD) in yearly interests.
This story sold me. I'm now a new subscriber.
Tom, you are close to 1,000,000 subscribers. With videos like this, you deserve every single one. Well done, Tom. Keep the great videos coming.
Got excited at the idea of perpetual money, then I heard "11 euro".....
you could see how penmanship decreasing overtime :(
Probably just a different person
@@contemplationcat1388 Over a period of time of between 300 and 400 years? No, it’s definitely the same person.
You can see just how much more legible the numbers became over time.
Now this is quality content. Great job. Subscribed.
In a way that's like living history. So interesting. That's why I love your Channel.
When Tom Scott is next door to you and you cant meet him because you didnt know he was there.. ugh.
Robert Davis I know right :( would want to meet him so bad
Yeah... He once made a video about why he does that. It's annoying though. :(
@@ChaimS link plz
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.
We have a similar thing in the UK. Scotland became part of the UK because we shared the same KIng James I of England James VI of Scotland and Scotland was bankrupt. Scotland had spent a stupid amount of money on a project in south America called The Port Darien Affair that sent Scotland bust. England took on the debt on the understanding that Scotland came under the English crown - we are still paying the interest.
The UK government has a department that just deals with these "Debts in Perpetuity".
I actually worked a lot on the Lekdijk. Was born close to it too. Very beautiful environment. Did you enjoy it, Scott?
I wouldn't have believed you, were it not for the famously Dutch surname 'Spaghetti'
Hey, one has to honor the Flying Spaghetti Monster somehow ;)
Ramen, brother.
But hey... free money.
w0mbles I wouldn't exactly complain, but...
*flys halfway around the world*
I don't know about that. Someone paid for the bond, after all.
Not free it's still payed for by the taxpayers within the jurisdiction of the company that issued the bond.
@@kipter
"Free" for the bond holder, not for the issuer.
I was looking at the MLK BLVD exit sign thinking "hmm that looks familiar" then I realized that's my daily commute!
0:37 super trippy to be watching your videos and see the off ramp i use on the highway to head to work 😰