The big question at David Lay’s auctioneers in Penzance next week: Are these bonds worth a few hundred pounds or up to £3.6m each?
Discovered as a dusty roll of paper in
a cardboard box among the effects of a recently deceased estate,
these £100 bonds were issued by Britain, France, Germany and the
USA as part of the £25m Reorganization Gold Loan of 1913. The funds
were designed to support Yuan Shih Kai, the newly appointed
President, as he established the fledgling government of the
Republic of China.
As interesting collectables, each note
is thought to be worth a few hundred pounds; David Lay sold just
ten in their May antique sale with an estimate of £500-1000 and
they took £3000. However, it is now thought that at least part of
the reason they attracted so much attention - and an
estimate-busting price - is because, according to international
law, subsequent governments are required to pay out for bonds
issued by the previous government.
Whether China's current government
would bow to this obligation remains to be seen, but, according to
the auctioneers, a group of influential businessmen, predominantly
Americans, who have substantial numbers of these old bonds, are
engaged in an ongoing legal battle for recompense, the outcome of
which is yet to be decided.
"If (and this is a particularly large
'if') they are successful in getting the Chinese or American
government to pay out, each of the numerous sheets we're selling
could be worth something in the region of £3.6m," they say. "Not
bad for a few foreign sheets of paper in a cardboard
They are now anticipating at least as
much interest in the 85 bonds they are offering in their July 10-11
Divided into ten lots of eight bonds,
each estimated at £2000-2500, an eventually successful payout from
the Chinese government would put their combined potential value at
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