Four hundred years ago - on New Year's Day in 1624 - drifting ice on the river Lek in the Netherlands smashed up a dike outside Utrecht. This was a pretty big problem in a country that is roughly one-third below sea level.

Soon, the region was flooded, with even Amsterdam threatened by the water. The locals eventually managed to staunch the flood, but they still needed to do a full, durable rebuild - which would be extremely expensive.

Fortunately, the Dutch were brilliant, sophisticated financial pioneers, and had developed the era's most vibrant bond market. The local water authority - called Hoogheemraadschap Lekdijk Bovendams - swiftly sold over 50 bonds that raised about 23,000 Carolus guilders to finance the repairs.

Of these bonds the only surviving one is a 1,200 guilder bond sold on December 10, 1624, to a wealthy woman in Amsterdam called Elsken Jorisdochter. In return for her money, the water board promised Jorisdochter, her descendants or anyone who owned the bearer bond 2.5 per cent interest in perpetuity.

Remarkably, this bond is still alive and pays €13.61 of interest a year. Yesterday, the current owner - the New York Stock Exchange - collected £ 299.42 of owed interest for the bond's 400th birthday, which FT Alphaville was able to attend.

Keen readers will remember that FTAV wrote about the handful of surviving Dutch perpetuals last year. So why are we banging on about this again?

Well, partly because this bond is a physical, living reminder of how fixed-income markets built the modern world, which bears repeating. Bonds have won wars and broken countries. They have funded hospitals, slave-worked tobacco farms and sugar plantations. They're now bankrolling the data centres and chips that power artificial intelligence, as well as more obvious boondoggles, like Manchester United.

As a result, it's highly likely that over half of all global debt is in the form of bonds rather than loans (comprehensive and accurate global data on this is patchy). This is a big deal, as MainFT laid out in a magazine piece last year.

The 1624 bond ended up in NYSE's possession thanks to a Dutch-American banker called Albert Andriesse, a senior partner in Pierson & Co. and board member of the Amsterdam Stock Exchange.

Andriesse acquired the perpetual at an auction as a historical curio, and on a 1938 visit to New York donated it to the NYSE as a sign of friendship, given how 1624 was the year the city was founded as New Amsterdam.

Two years later, Andriesse and his family fled the Netherlands to escape the Nazis, and settled in New York in 1941. There he became an American citizen before passing away in 1965.

Even at the time his gift was novel enough to get a brief notice in the New York Times, with the following clip courtesy of his granddaughter, who was at yesterday's interest payment ceremony.

Pablo adds:

Pablo adds:

To read the complete article, see:
Happy 400th birthday to the world's oldest bond(https://www.ft.com/content/5122706e-39ca-4bbc-95cc-373188a9b1c9?)

To read the earlier E-Sylum article, see:
1624 PERPETUAL DUTCH BOND STILL PAYS INTEREST(https://www.coinbooks.org/v26/esylum_v26n47a32.html)