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 Russian bonds consigned to Phillips' auction sale on 13 February have already been withdrawn by their vendors.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

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on Pottermore site this morning

News
Mike Tyson has led an appalling and sad life, but are we not a country that gives second chances?
people

Former boxer recalls incident when he was seven years old

Sport
A Rutherford Raiders shirt with the PornHub sponsorship
football

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Charlie Sheen said he would
tv

Charlie Sheen could be set to revive his role as a hedonistic womaniser

Life and Style
Jamie Oliver’s version of Jollof rice led thousands of people to post angry comments on his website
food + drink
Arts and Entertainment
glastonbury
News
Apple CEO Timothy Cook
people
News
i100
Arts and Entertainment
Vividly drawn: Timothy Spall in Mike Leigh’s ‘Mr Turner’
film

Review: Mike Leigh's biopic is a rambling, rich character study

Finacial products from our partners
Property search

How shops make you spend: The subtle art of the savvy retailer revealed

'A third extra for free', gift sets, recommendations for a present for Grandpa - just some ways to make you pay more than you intended

Many people unwittingly end up invested in sectors at odds with their ethical beliefs.

Simon Read: It is time to think again about ethical money

The ethical investment industry is giving itself a makeover, but the problem seems to lie more with getting its message and its methods into the mainstream

Going down the wrong road: parking fines are
nudging people into debt difficulties

Charges related to car parking rising and leading to serious money woes

Going down the wrong road: parking fines are nudging people into debt difficulties

Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends

Mark Dampier: Woodford’s young companies could be the stars of the future

Stacks of income: Drax is among the companies in Neil Woodford’s portfolio that he believes will pay strong dividends

A trader works on the floor of the New York Stock Exchange

Simon Read: The markets might not be calm but you should be

Don't panic, it’s a wise idea to check investments regularly to ensure they are on target for your hoped-for returns

Only six per cent of the 13,000 new homes bought during Help to Buy’s first nine months were in London

Money Insider: Help to Buy must be boosted by building

With little or no wage growth being seen in the UK, increasing house-price inflation could see the number of first-time buyers slide further, unless there’s a new accelerated house building programme

House buyers can take their pick of more than 3,500 home loans, the most available since the financial crisis

Simon Read: Those cheap home loans may be built on shaky foundations

You should ignore the headline offers and trickery and work out the total cost of borrowing under different deals

Denise Leigh, who appeared in a production
of Rigoletto with Alan Opie, was left without an essential service

The opera singer, the broadband delay and why customers aren’t divas if they expect a good service

Denise Leigh, who appeared in a production of Rigoletto with Alan Opie, was left without an essential service

Problem debt adds £8bn cost to the economy

A charity has calculated the cost to us all of unmanageable debt – from lost productivity to the extra demands on the NHS

Payday loan stores are to face tougher regulations after moves proposed by the Financial Conduct Authority (FCA) call on more responsible lending

Calls for payday lenders to sign up to an officially recognised price comparison site

The regulators are at last tackling the high-profile payday lenders, but they appear to be ignoring the growing problem of internet loan firms

According to the research, only one in five customers trusts their energy company

Rap for energy firms won’t stop the rising prices

As the cold weather hits, the question of soaring bills will be felt by each of us at home

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

    Trainee Recruitment Consultants

    £20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

    Finance Assistant - Part time - 9 month FTC

    £20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

    Marketing Manager

    £40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

    Market Risk Manager - Investment Banking - Mandarin Speaker

    £45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

    Day In a Page

    The drugs revolution starts now as MPs agree its high time for change

    The drugs revolution starts now as MPs agree its high time for change

    Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
    The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

    Gotcha! The camera is turned on tabloid editors

    Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
    Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

    Fall of the Berlin Wall

    It was thanks to Gorbachev that this symbol of division fell
    Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

    What makes ouija boards and demon dolls scary?

    Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
    A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

    Rose Rouse's safari in modern Britain

    Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
    Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

    'My world of no smell and odd tastes'

    A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

    Matt Parker is proud of his square roots

    The "stand-up mathematician" is using comedy nights to preach maths to big audiences
    Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

    Paul Scholes column

    Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
    Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

    Frank Warren column

    Call me an old git, but I just can't see that there's a place for women’s boxing
    Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

    Adrian Heath's American dream...

    Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
    Simon Hart: Manchester City will rise again but they need to change their attitude

    Manchester City will rise again but they need to change their attitude

    Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
    Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

    A Syrian general speaks

    A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
    ‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

    ‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

    Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
    Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

    Fall of the Berlin Wall

    History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
    How to turn your mobile phone into easy money

    Turn your mobile phone into easy money

    There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes