The debt nobody
ever repaid
On 15 May 1648, a Dutch water board borrowed a thousand guilders from a private citizen to shore up a bank of the river Lek. Three hundred and seventy-eight years later, the principal has never been returned. This is not a default: it was the contract.
A deed written on goatskin
The hoogheemraadschap Lekdijk Bovendams was an assembly of landowners charged with some thirty kilometres of dykes along the Lek, downstream of Utrecht. It needed to pay for a set of piers meant to push the current away from the bank, near Honswijk. Rather than raise a levy, it borrowed. On 15 May 1648 it issued to one Niclaes de Meijer a handwritten deed on goatskin, given against "the sum of one thousand Carolus guilders of twenty stuivers apiece," bearing interest at 5% a year, with no maturity.
No maturity means exactly that: no due date, no repayment of principal, interest owed for as long as the issuer exists. The rate was cut twice within the same century, to 3.5% and then 2.5%. The water board itself is gone; its obligations passed from hand to hand down to the Hoogheemraadschap De Stichtse Rijnlanden, which today looks after the flood defences of Utrecht. Yale bought the document at auction in 2003 for its financial history collection. Nobody had claimed the interest since 1977; in 2015 a curator made the trip and came home with twelve years of arrears, some 136.20 euros.
Yale's deed is one of five known copies. Older still, a 1624 deed issued by the same board to one Elsken Jorisdochter against twelve hundred guilders was presented in 1938 to the New York Stock Exchange, which holds it to this day. Its annual coupon comes to 13.61 euros.
A debt with no maturity is not an unpaid debt
The perpetual bond is no archivist's oddity. It is the barest form of debt, the one where the lender buys not a maturity but an income, and whose value fits into a single division: the coupon over the required yield. England made it an instrument of public borrowing with the consols of 1751, the last of which were only redeemed in 2015. Banks still issue them, under the name of hybrid debt, precisely because capital that is never returned looks a great deal like equity.
Two lessons remain. The first concerns the chain: this claim outlived the Dutch Republic, Napoleon and the guilder itself, because each institution succeeding the last agreed to inherit it. What endures is not the parchment but the unbroken sequence of undertakings. The second is less flattering: a thousand guilders was a considerable sum in 1648, while the few euros paid out each year amount to nothing at all. Perpetuity guarantees the principle of payment, never its purchasing power.
A debt that is never repaid is not a forgotten debt. It is a promise someone chose to keep without end.