Pub Date : 2019-12-31DOI: 10.1515/9780691185613-010
{"title":"6. Mortgage Bonds for the Small Investor","authors":"","doi":"10.1515/9780691185613-010","DOIUrl":"https://doi.org/10.1515/9780691185613-010","url":null,"abstract":"","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114686593","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter examines three failed credit experiments on pooling loans, which articulated competing visions for a rapidly changing political economy. Each of these episodes was an attempt to move credit into the periphery in a way that was quicker, cheaper, easier, more stable, and more reliable than it had been before. To some extent, each involved corporate methods of organizing property and risk. Despite those similarities, however, there were also differences among the three experiments that reveal fundamental divides in how Americans made sense of a rapidly changing economic landscape. As Americans experimented with systems of credit distribution at the close of the nineteenth century, they fought over how competing interests should be reflected in a rapidly transforming political economy. Their clashing assumptions and values were built into these lending structures. Consequently, Americans' opinions of how credit should operate were forged through these lending structures as much as they were reflected in them. Each of these experiences resulted in hard-won insights about the challenges that plague credit markets. As such, these failures set the stage for a federal overhaul of farm credit in the early twentieth century. At stake in these efforts was not just the speed at which money might flow through credit markets, but also the principles that should guide those flows.
{"title":"Three Failures","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.8","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.8","url":null,"abstract":"This chapter examines three failed credit experiments on pooling loans, which articulated competing visions for a rapidly changing political economy. Each of these episodes was an attempt to move credit into the periphery in a way that was quicker, cheaper, easier, more stable, and more reliable than it had been before. To some extent, each involved corporate methods of organizing property and risk. Despite those similarities, however, there were also differences among the three experiments that reveal fundamental divides in how Americans made sense of a rapidly changing economic landscape. As Americans experimented with systems of credit distribution at the close of the nineteenth century, they fought over how competing interests should be reflected in a rapidly transforming political economy. Their clashing assumptions and values were built into these lending structures. Consequently, Americans' opinions of how credit should operate were forged through these lending structures as much as they were reflected in them. Each of these experiences resulted in hard-won insights about the challenges that plague credit markets. As such, these failures set the stage for a federal overhaul of farm credit in the early twentieth century. At stake in these efforts was not just the speed at which money might flow through credit markets, but also the principles that should guide those flows.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120982153","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-07-16DOI: 10.1515/9780691185613-009
Sarah L. Quinn
This chapter demonstrates how, as the United States transitioned from an agricultural to an industrial nation, mortgage lenders promoted homeownership as the new measure of independence, success, and virtue. This vision was built into the deep logic of their lending structures, which brought into being a small local community of equals working together to lift themselves up. Lending cooperatives developed in the nation's towns and cities over much of the nineteenth century. On the national level, direct federal government support for urban mortgage credit was delayed until the First World War, when a set of housing crises led to national experiments in the building and financing of urban homes. These programs were temporary, but they helped change how many Americans thought about housing policy, introducing the idea that such policy was an integral part of economic growth and a potentially appropriate site of federal involvement, especially when organized through partnerships and credit support.
{"title":"5. From a Nation of Farmers to a Nation of Homeowners","authors":"Sarah L. Quinn","doi":"10.1515/9780691185613-009","DOIUrl":"https://doi.org/10.1515/9780691185613-009","url":null,"abstract":"This chapter demonstrates how, as the United States transitioned from an agricultural to an industrial nation, mortgage lenders promoted homeownership as the new measure of independence, success, and virtue. This vision was built into the deep logic of their lending structures, which brought into being a small local community of equals working together to lift themselves up. Lending cooperatives developed in the nation's towns and cities over much of the nineteenth century. On the national level, direct federal government support for urban mortgage credit was delayed until the First World War, when a set of housing crises led to national experiments in the building and financing of urban homes. These programs were temporary, but they helped change how many Americans thought about housing policy, introducing the idea that such policy was an integral part of economic growth and a potentially appropriate site of federal involvement, especially when organized through partnerships and credit support.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114513963","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-07-16DOI: 10.1515/9780691185613-005
Sarah L. Quinn
This introductory chapter provides a background of America's real estate markets. Already by 1890, nearly half of U.S. households were owner-occupied, and a staggering four-fifths of farming households headed by people over the age of 60 were owner-occupied. Such high levels of homeownership required a massive amount of credit to circulate, and in the right way. This was no easy feat. Mortgages are risky and costly transactions, ones that many banks avoided, either partially or completely, for long periods of time. America's mortgage markets were also endemically unstable and inefficient. American mortgage markets are therefore old, expansive, morally supercharged, and highly consequential. All of this is ideal for a study of the social life of finance. Mortgage markets' long and troubled history also provides a context in which to understand the two cases at the heart of this book: securitization and federal credit. Both evolved as ways to manage the risks and costs associated with lending and, in so doing, improve the flow of credit across the nation.
{"title":"1. The Problem and Promise of Credit in American Life","authors":"Sarah L. Quinn","doi":"10.1515/9780691185613-005","DOIUrl":"https://doi.org/10.1515/9780691185613-005","url":null,"abstract":"This introductory chapter provides a background of America's real estate markets. Already by 1890, nearly half of U.S. households were owner-occupied, and a staggering four-fifths of farming households headed by people over the age of 60 were owner-occupied. Such high levels of homeownership required a massive amount of credit to circulate, and in the right way. This was no easy feat. Mortgages are risky and costly transactions, ones that many banks avoided, either partially or completely, for long periods of time. America's mortgage markets were also endemically unstable and inefficient. American mortgage markets are therefore old, expansive, morally supercharged, and highly consequential. All of this is ideal for a study of the social life of finance. Mortgage markets' long and troubled history also provides a context in which to understand the two cases at the heart of this book: securitization and federal credit. Both evolved as ways to manage the risks and costs associated with lending and, in so doing, improve the flow of credit across the nation.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126665729","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This concluding chapter summarizes the main points of the book, points out areas for future research, and draws connections with later developments in securitization and credit programs leading up to the crash of 2007–2008. It also argues that understandings of the limits and possibilities of what people owe to each other and can expect from the state are written into the designs of financial instruments. These understandings help determine the distribution of profits and risks within specific financial transactions. This matters because the distributional politics of credit plays out simultaneously on the level of how credit fits within a political economy and on the level of specific exchanges and loans. The issue, in other words, is not just whether the people of a nation generally use credit to pay for housing or college, but the terms built into those loans. What people do in financial markets, what those financial markets are expected to do—together these dynamics make up the social life of credit in a nation.
{"title":"What We Owe One Another","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.15","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.15","url":null,"abstract":"This concluding chapter summarizes the main points of the book, points out areas for future research, and draws connections with later developments in securitization and credit programs leading up to the crash of 2007–2008. It also argues that understandings of the limits and possibilities of what people owe to each other and can expect from the state are written into the designs of financial instruments. These understandings help determine the distribution of profits and risks within specific financial transactions. This matters because the distributional politics of credit plays out simultaneously on the level of how credit fits within a political economy and on the level of specific exchanges and loans. The issue, in other words, is not just whether the people of a nation generally use credit to pay for housing or college, but the terms built into those loans. What people do in financial markets, what those financial markets are expected to do—together these dynamics make up the social life of credit in a nation.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115004343","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter outlines the growth of credit programs from the Second World War through the postwar era. This period saw a surge in wartime credit, the end of the Reconstruction Finance Corporation (RFC), and the emergence of government support for venture capital and school loans. As postwar credit programs moved capital and pioneered new ways of lending, they shaped how and where U.S. companies lent money. They also helped lift a generation of white families and systematically exclude African Americans. Discriminatory and decentralized, off-budget and complex, the credit programs were a key component of America's peculiar developmental state. Indeed, credit programs are not aberrations in the system. They are a core aspect of how the system works.
{"title":"Off-Budget and Decentralized","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.13","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.13","url":null,"abstract":"This chapter outlines the growth of credit programs from the Second World War through the postwar era. This period saw a surge in wartime credit, the end of the Reconstruction Finance Corporation (RFC), and the emergence of government support for venture capital and school loans. As postwar credit programs moved capital and pioneered new ways of lending, they shaped how and where U.S. companies lent money. They also helped lift a generation of white families and systematically exclude African Americans. Discriminatory and decentralized, off-budget and complex, the credit programs were a key component of America's peculiar developmental state. Indeed, credit programs are not aberrations in the system. They are a core aspect of how the system works.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133123416","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter looks at the postwar boom in mortgage bonds. The market heated up at the close of the 1920s as lenders marketed mortgage bonds to American families. With families now acting as investors in an unregulated financial market, these bond sales reflected the new logic of the shareholder democracy. The crux of the shareholder democracy was not just that Wall Street's markets could welcome small investors, but also that those markets should be unregulated. As the boom grew into a full-scale bubble, sellers had more reason to exploit the ignorance of small investors, and there was no real government oversight in place to stop them. Emboldened by the wartime bond drives and courted by Wall Street and advertisers, many Americans jumped into the shareholder democracy by investing in mortgage bonds. This was, in retrospect, a recipe for disaster. The collapse of this market in the early 1930s wiped out the private market for mortgage bonds completely and led to regulatory prohibitions against small-investor purchases of mortgage bonds.
{"title":"Mortgage Bonds for the Small Investor","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.11","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.11","url":null,"abstract":"This chapter looks at the postwar boom in mortgage bonds. The market heated up at the close of the 1920s as lenders marketed mortgage bonds to American families. With families now acting as investors in an unregulated financial market, these bond sales reflected the new logic of the shareholder democracy. The crux of the shareholder democracy was not just that Wall Street's markets could welcome small investors, but also that those markets should be unregulated. As the boom grew into a full-scale bubble, sellers had more reason to exploit the ignorance of small investors, and there was no real government oversight in place to stop them. Emboldened by the wartime bond drives and courted by Wall Street and advertisers, many Americans jumped into the shareholder democracy by investing in mortgage bonds. This was, in retrospect, a recipe for disaster. The collapse of this market in the early 1930s wiped out the private market for mortgage bonds completely and led to regulatory prohibitions against small-investor purchases of mortgage bonds.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129582826","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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