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.