Tiercering

The Tiercering (from the French word tiercé, meaning a third) refers to a historical event in the Netherlands on July 9, 1810, when Emperor Napoleon imposed a reduction of interest to one third of the norm on Dutch government bonds.

Because of economic problems and general war conditions, the Kingdom of Holland, which had just been annexed by France, was receiving less income than it was paying out in interest, and therefore the Treasury could no longer bear to pay the interest rates on perpetual bonds.

In the previous years 1808 and 1809, the government had defaulted on the bonds altogether and no interest at all had been paid.

[2] Many wealthy citizens, pensioners, local councils and charities were dealt a heavy blow by the ruling.

Local charity organizations which required a large portion of their assets to be invested in government bonds, were the hardest hit and the tiercering caused their financial revenue to be reduced by two thirds.