Eighty years later, the Tsarist bond pays off

Old bonds can turn out to be a lot more than a nice bit of engraving to paper the loo with.

About 400,000 French investors still hold some four million bonds issued by Tsarist Russia, with a nominal value of around pounds 1.7bn. They have had no payments on their holdings since 1917. Now a settlement is thought to be imminent.

The announcement has already had an impact in Bond Street. Russian bonds consigned to Phillips' auction sale on 13 February have already been withdrawn by their vendors.

Scripophily, the rather unwieldy name given to the collecting of old bonds and share certificates, is where the worlds of finance and collecting meet. The International Bond and Share Society has 680 members in 45 countries, holds regular meetings, publishes an illustrated journal four times a year and issues an annual directory of dealers, auction houses and collectors.

The story of scripophily began in the 1970s when dishonoured bonds from Russia, China and South America were trading on the London Stock Market for peanuts - typically for 25 to 50p per pounds l00 nominal value.

Some flamboyant brokers had their toilets papered with certificates because they were more interesting and cheaper than conventional wallpaper. A very small group then began to accumulate them because of their aesthetic appeal. Certainly many are colourful and the standard of engraving is superb and there was always a remote chance that one day they would be redeemed.

Then Stanley Gibbons, the stamp dealers in the Strand, began dealing in coins and added bonds, old cheques, antique maps, campaign medals and antiquities to its repertoire.

Articles on the virtues of investing in collectables appeared in the general and financial press, a couple of books appeared on the subject and a specialist magazine at pounds l0 an issue was published. Investment advisers Towry Law even launched a collectable portfolio in conjunction with Gibbons.

The glossy brochure did warn that there was a risk in such investment, but the section on bonds concluded that "there are indications that bonds are due for an increase in value".

There certainly was. Mike Vessid from Shrewsbury, who has dealt in old bonds for 20 years, recalls those heady days. "In late November 1978 I bought a pounds 1,000 bond issued by the Chinese government in 1919 to finance the import of Marconi equipment. I paid pounds 75 and 11 months later the same bond was changing hands for over pounds 4,000. Today it would be worth around pounds 300."

A pounds 500 bond issued by the Russian Kokhand-Namangan Railway in 1910 was selling for pounds 25-pounds 30 in 1978 and by the end of 1979 was selling for around pounds 2,000. Today, an example will sell for around pounds 350, while a pounds 20 bond of the same issue will sell for its nominal value.

Inevitably the bubble burst, the downward price spiral lasting a few months. In 1982 Gibbons began the task of selling its vast stock of international bonds. Bonds which had been retailing for pounds l50 each were sold in bulk over a three-year period for pounds 2-pounds 3 each to Continental dealers.

In 1986 an agreement was signed to allow deposits worth pounds 46m made by the imperial Russian government, frozen in Britain since 1917, to be used to settle claims by British nationals against Russia. But of the estimated 10-20 million in existence, only one million bonds were submitted, and between November 1987 and May 1990 bondholders who surrendered their bonds received three payments amounting to 54.78p in the pound against an initial estimate of 10p.

In 1987, the People's Republic of China partially settled outstanding claims by UK holders of Chinese bonds. It was initially thought that the pounds 20m made available would give holders a 5-8 per cent payout. However, as in the case of Russian bonds, the volume submitted was much smaller than anticipated and holders received 62.5p in the pound.

In both settlements bondholders mostly received more in settlement than their bonds were worth on the collectors' market, though there were exceptions. Defunct bonds and share certificates from the rest of the world plodded along by comparison and continue to do so. While a few classics can sell for thousands - for example a really good 19th-century certificate for Standard Oil signed by JD Rockefeller could sell for up to pounds 6,000 today against a price of pounds 100 in 1978 - thousands of others sell for quite modest sums.

Indeed, prices start from below pounds 10. It is only the rarities which command sums above pounds 100. Some scripophilists adopt a thematic approach, such as gold mines world-wide, while others will restrict themselves to certificates issued in a particular countryn

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
i100
Extras
indybest
News
peopleLiam Williams posted photo of himself dressed as Wilfried Bony
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
Finacial products from our partners
Property search

Simon Read: The point of having protection insurance? The right cover can help reduce your financial concerns at a time of extreme worry

In May Nicola Groves got a massive shock. The 45-year-old mother of two was told, bluntly, that she had breast cancer. "When I heard the words, 'You do have breast cancer and you are going to lose your breast', I felt as if time stood still," she says.

Mark Dampier: Maybe boom, maybe bust, but we'll probably just muddle along

It's that time again when the media looks back over the past year and forward to the next. I am reminded of an old film, The Day the Earth Caught Fire (1961). Near the end of the film a newspaper prints two headlines – which one it uses will depend on whether the world is saved or doomed.

Sainsbury’s sank 7 per cent to 234p; Tesco fell 3.2 per cent to 180.2p ; and Morrisons dropped 5 per cent to 159.9p

Money Insider: Supermarkets: the real challenger banks

The supermarket banks have always excelled at offering simple, no nonsense products, and savings accounts is another area in which they fare well

Pat and Richard Astbury at their home in Norton Canes, Staffordshire. They have benefitted from the Community Energy Project aimed at helping council tenants with their energy bills. They have had solar panels installed.

Locals in Staffordshire to save hundreds after new council-backed project to install solar panels

The sun is shining on people who struggle to heat their homes and it’s thanks to a sense of community

Gross household debt reached a historic high of around 160 per cent of combined incomes in 2007

Simon Read: Give people struggling with debt some breathing space

Struggling people need help, understanding and forbearance, not ill-thought-out pronouncements

A person walks through the City of London during the early morning rush hour in London

Simon Read: Caught up in the scandal about leaks at the regulator

You won’t find me bashing the banks for the sake of it, but sadly they’ve deserved all the criticism that’s been sent their way in recent years

There were around 750,000 victims of mobile phone theft in England and Wales last year, according to official figures

Money alert: Stolen mobile phones

Gillian Guy, chief executive of Citizens Advice: 'The injustice of shock bills for crime victims must end. The Government must stand up for consumers and cap bills from lost or stolen phones at £50'

Indian workers boil sugarcane juice to make jaggery, a traditional cane sugar, at a jaggery plant in Muradnagar, Uttar Pradesh's Ghaziabad district

Mark Dampier: A hot investment story is taking shape as India lets the light in

Stirring the pot: the Indian Government’s reforms of labour rules offer hope of a brighter future for businesses 

An AA patrol man helping a woman whose scooter had broken down.

Bargain hunter: Whisk up those leftovers instead of just throwing them in the bin

Knight of the road, look out: you’ve got a new rival 

How to raise money for charity this Christmas

There are so many ways you can raise money - and awareness - for charity. Rob Griffin explains how easy it is to donate and reap financial rewards

Simon Read: The Chancellor has stamped on an unfair tax. But will the delight of homebuyers mean misery for others?

Were you surprised by the sudden reform of the rules for stamp duty on property purchases? I certainly was. I've been calling for ages for a change in the tax to make it more fair – and, at a stroke, George Osborne did just that on Wednesday in his Autumn Statement.

Santander, whose ads have been fronted by the Olympic gold medallist Jessica Ennis-Hill, was among the banks where there were potential pitfalls with shared licences

Best savings rates are not all they might seem

Consumers can sometimes think they are shopping around for a rewarding account when in one important aspect, writes Samantha Downes, they are not
The sunlit uplands: switching out of a final salary pension may seem like madness, but there could be cases where it makes sense

Gold-plated pensions – the key to retirement freedom?

With some people are weighing up whether they will be better off cashing in their final salary pension next spring, Samantha Downes asks the experts

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    The week Hollywood got scared and had to grow up a bit

    The week Hollywood got scared and had to grow up a bit

    Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

    Panto dames: before and after

    From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
    Thirties murder mystery novel is surprise runaway Christmas hit

    Thirties murder mystery novel is surprise runaway Christmas hit

    Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
    Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

    Anne-Marie Huby: 'Charities deserve the best'

    Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
    The botanist who hunts for giant trees at Kew Gardens

    The man who hunts giants

    A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
    The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

    The 12 ways of Christmas

    We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
    Birdwatching men have a lot in common with their feathered friends, new study shows

    The male exhibits strange behaviour

    A new study shows that birdwatching men have a lot in common with their feathered friends...
    Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

    Famous diaries: Christmas week in history

    Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
    From noble to narky, the fall of the open letter

    From noble to narky, the fall of the open letter

    The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
    A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

    A Christmas ghost story by Alison Moore

    The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
    Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

    Marian Keyes

    The author on her pre-approved Christmas, true love's parking implications and living in the moment
    Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

    Bill Granger's Christmas Eve fish feast

    Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
    Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

    Rodgers fights for his reputation

    Liverpool manager tries to stay on his feet despite waves of criticism
    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

    Michael Calvin's Last Word

    Sepp Blatter is my man of the year in sport. Bring on 2015, quick