The case of the undying debt

Abstract

The French government currently honors a very unusual debt contract: an annuity that was issued in 1738 and currently yields 1.20 per year, payable to the descendants of its original recipient. I tell the story of this unique debt, which serves as an anecdotal but symbolic summary of French public finances since the eighteenth century. Created by a powerful nobleman for one of his servants, it survived the turmoil of the French Revolution, became part of the public debt and has been scrupulously honored to this day, even though its value has been eroded away by decades of inflation. © European Association for Banking and Financial History e.V. 2010.