Time had been on their side. The golden Victorian pounds that the mandarins had borrowed could now be repaid in notes whose worth had been eaten away. As always, inflation had proved to be the debtor's ally. Today China's rulers find themselves holding the bonded obligations of the United States government in a constantly increasing, colossal stockpile, and must wonder whether the same trick is being played on them. 

With China off its books, the Corporation of Foreign Bondholders found its workload much reduced. There were still some 60-year-old debts outstanding from the City of Dresden and the Free State of Saxony. Polite letters were addressed to the Governor of Mississippi: "The Corporation cannot acquiesce in an unjustifiable default merely because it has been successfully maintained for many years." No comment. It seemed to be time to draw stumps and, after 121 years, to wind the Corporation up.

Those rust-coloured annual reports had at least served as reminders of what happened last  time. They showed the hazards that may be involved when money must be pursued across frontiers. They showed that sovereign borrowers may have the weaknesses of ordinary borrowers and, in some ways, may be harder to pursue. Even so, every new generation in financial markets is ready to believe that, this time, it will be different.

Now the chances must be that, for the second time in half a century, Greece will have to restructure its debt, and we shall be lucky if no other country follows. As for the bondholders — big banks so prominent among them — they will need all the leverage that they can get. Fortunately, a proven Victorian model is at their disposal. They should bring it back and set it to work.