Handwritten bonds of 1706

[Pellinore]

Among a lot of other financial papers of mainly the 19th century two more ancient valuables fluttered into my lap (maybe you know the feeling). You may have seen the two bills of exchange from 1879 (that are now for sale by the way) with a value of about four thousand gold sovereigns each, and now I found two handwritten bonds about loans from Mr. Jeuda Senior Henriques (of Amsterdam).

They are in Dutch, not everybody can read this, but here's a description:

Handwritten bond of C. de Jonge van Ellemeet as 'Recipient General of the United Netherlands'. One sheet, 31 x 21 cm. Handmade paper with the city coat of arms of Amsterdam as a watermark. 22 lines of text (written by a clerk) with signatures of financial dignitaries, and marginalia.
De Jonge van Ellemeet (himself a very rich magnate, 1646-1721) says ('confesses') to having received from Jeuda Senior Henriques the sum of 'Twee Duyzent ponden tot veertig groote vlaems 't pont gelicht op Interest tegens den penning vijf en twintig in 't Jaer' or Two thousand pounds of 40 Flemish groats pro pound lifted at Interest against the twenty-five penny in a Year, with the date 22 April 1706 and the signature of De Jonge van Ellemeet. Including an approval of this bond by officials of the Council of State, Treasurer General Jacob Hop, Johan van den Bergh (Leiden representative in the Council of State) and Simon van Slinge[r]landt (secretary of the Council of State) i.e. three well-known regents with biographies on Dutch Wikipedia, and two lesser knowns A. van Schuurman and A. van Dedem (both expensive names though), with the date June 3, 1706.

Now I'd like to know - 1. how much is two thousand pounds of 40 Flemish groats in contemporary guilders or British pounds?
2. Is this anything special? There must have been enormous numbers of these bonds, loans from a banker by a state.
3. And is 'bond', in Dutch 'obligatie' the right name for it?
4. Were they tradable - could you hand it over to someone and would it keep its value? I would think so, because of the space left open in the seventh and eighth line, where a name could be filled in.
5. Wouldn't the signature of Jeuda Senior Henriques be needed to give the document its value?
6. What does it mean: 'op Interest gelicht' = lifted on interest. Was the money withdrawn and paid out by the banker to the borrower, or was it paid back by the debtor?
7. How much is the interest - the twenty-five penny in a Year - not 25% I think.

I snipped the document in two to make it readable for you. I can translate parts of the text if you want.

-- Paul





By the way, this chiffre I think just means 'two thousand pounds'.

[THCoins]

Interesting item Paul !
I think you are right this is a staatsobligatie aan toonder, "bearer bond" or "IOU". "Beloove aan den voornoemde of den toonder dezes te restitueren".
"Gelicht op interest" = "geleend tegen rente".
"Tegen den penning 25 in 't jaer". = Interest is 1/25th of the main sum, so 4% per year.

[Henk]

The question was: how much is two thousand pounds of 40 Flemish groats

As one groat is equal to half a stuiver one pound equals 40 x 1/2 = 20 stuiver. One such pound is equal to 1 gulden (20 stuiver). So the amount is 2000 gulden. The gulden is the usual money of account in the Netherlands (7 provinces) at that time.

[Figleaf]

I have more questions than answers. The most important one is the denomination of the bond (technically, it is a due bill - schuldbekentenis, rather than an obligation, but bond is easier to type). A Flemish groat is a late medieval silver coin tariffed at ½ Dutch stuiver in the 15th century. It no longer existed in 1706. There is no way that 40 of them would be anywhere close to a pond (around 500 decimal grams) of silver. My guess is that we are talking about silver bars here, where "pont" is the unit and "grote vlaems" the fineness.

This is not a bond because there is no repayment date or reimbursement schedule in the document. My guess is that it is payable on sight, i.e. Jeuda Senior Henriques can take this paper to a bank in London, Farawaystan or around the corner and get paid in the local coin to the pure silver amount specified to the fineness of the coin. In other words, the bond could be cashed, not traded, though it could probably be endorsed to Jeuda Senior Henriques' agent in London or Farawaystan. Problem is that in 1706, I would expect that amount to be specified in Spanish pesos if the bond is cashed outside, or Rijksdaalders if it is meant to be cashed inside the Netherlands or its remaining colonies.

Next, there is the margin note. I can't read all of it, but it seems to say the bond is tax free, which could explain all the "famous" signatures. If so, that is bizarre, except perhaps if the bond is to be used in some kind of emergency. In this period, the Republic acquired the right of garrison in a number of cities now in Belgium in order to have a military buffer against another French invasion like the one in 1672. There might perhaps be a connection with this bond. BTW, the notation (G) ij m £ sometimes accompanied by an accountancy reference occurs four times in the margin in different handwriting and it indeed means good for (G) two (ij) m (thousand) £ (pounds). The notation ij is also used on British apothecary weights.

Last, the interest rate. If the denomination is "pound", the notation "penny" may mean 1/240th pound (Carolingian weight system), 25 pennies would be 25/240 x 100% = slightly over 10.4%. That would be a hefty percentage, except that the bond was apparently meant to be very short term, in which case it looks more reasonable, as the interest rate needs to cover administrative lending cost.

After the death of stadhouder William III, republican regents took over again from the Orangists, who had royalist tendencies. Trade in Asia decreased sharply as British power there soared. Trade in the Americas suffered from Spain imposing its monopoly there (leading to the war of Jenkins ear). The regent families inter-married and city councils (vroedschap) were made smaller, both turning the regents into a closed clan.

These factors changed the function of the regents from traders to investors and politicians (Jan Salie-geest). This document is a great illustration of that trend that would lead to their fall from grace and the Netherlands becoming an Orangist kingdom after the Napoleonic occupation.

Peter

[THCoins]

I think Peter has more of an economic background than I. But i can not fully agree with all he states.

The bond is payable to the contractant or barer by the "Ontvanger generaal" and named "de bovensteande obligatie" in the last part of the document itself.

There is a reimbursement scheme, "te restitueren zes maanden na dato", with the option to continue it untill repayment against a yearly interest of 4 % payable each six months.

The phrase "to the penny X" was a legal standard term for several centuries which really means an interest of 100/X percent. The denomination of the loan does not matter. Over a value of 25 penningen 1 penning interest has to be paid. There even is a Dutch proverb "hij is een penning-zestien". Which means someone is a Scrooge or loan-shark charging absurdly high interest.

[Pellinore]

Thanks for all your interesting solutions and remarks.
So to state the answers to my numbered questions:

1. The value of the loan is 2000 Dutch guilders. 
The Value of the Historic Guilder versus Euro website of the International Institute of Social History https://iisg.amsterdam/en/research/projects/hpw/calculate.php says:
fl. 2000.00 from the year 1706 has a "purchasing power" of fl. 55868.74 (€ 25352.13) in the year 2021.
Not terribly high I must say. By the way, I have two of these papers, the second has the amount of 1000 'pond', it is issued on the same day.

2. I still think there must have been an enormous lot of these papers. But probably most of these were destroyed after use. I think these two were preserved because of the signatures of famous men - that is the nature of the archive they come from.

3. According to THC's notes, it is a bearer bond or 'staatsobligatie aan toonder'.
There is at the left upper margin a note, that Figleaf draws attention to, saying 'Den obligatie is vrij ende exempt van de 100ste en 200ste of andere diergelycke penningen volgens Haer Ho'Mog [short for 'Hare Hoogmogende'] resolutie van den 16 feb. 1701' = The bond is free and exempt from the 100th and 200th or other similar pennys (1% or 0.5% tax) according to the Lofty Members of the States General resolution of February 16. 1701.
I don't find this remarkable; it's logical that a state bond is free of stately taxes.

4. This is not yet clear to me. The bond was to be paid back in six months, but could the banker sell it?

5. And why is the banker's signature not on the document? Nor any remark about the money having been paid back?

6. So it was a loan with interest,

7. And the interest was the 25th penny, or 4%.

--Paul