The Credit Frontier

Abstract

This chapter discusses the problem of farm credit distribution in the nineteenth century and discusses some early examples of how federal credit and securitization were mobilized in response to it. It first looks at the federal government's use of credit as a policy tool, focusing on two instances. These include the sale of land on credit to raise funds to pay down Revolutionary War debt and the use of land and credit as supports for the transcontinental railroads. Indeed, land was an essential political resource. The chapter then considers the demand for farm mortgage credit in the West and South as the nation spread over the continent. Land is a massive absorber of capital, and even when farmers received land for free, settlers and farmers used mortgages to raise funds to improve and work the land. Ultimately, land and credit have always been part of how Americans have sought to resolve disputes over who should get what and part of how government officials have sought to avoid more direct modes of taxing and spending.