14-07-08-2149NE02A David Lay auctions.jpg
The £100 bonds issued as part of the £25m Reorganization Gold Loan of 1913 to support the Republic of China which are on offer at David Lay’s auctioneers in Penzance.

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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 box."

They are now anticipating at least as much interest in the 85 bonds they are offering in their July 10-11 sale.

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 around £306m.