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.
{"title":"The Credit Frontier","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.7","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.7","url":null,"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.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"1 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":"124397507","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 shows how Progressives returned to the issue of farm credit distribution in the early 1900s and drew on European precedents to reframe credit allocation as a way for the central government to help people help themselves. American Progressives thus replaced their earlier, more radical farm credit politics with a more moderate vision of government-supported credit as an inexpensive way of supporting self-help. The chapter then considers the Federal Farm Loan Act (FFLA). Compared with other hallmarks of Progressive Era state building, the FFLA seems relatively unimportant. Nevertheless, it was a turning point in the use of selective credit as a tool of federal statecraft in the United States. The FFLA provided federal credit on a national level that was administered through public–private partnerships and bolstered by tax expenditures. By tracing the lead-up to this policy, one can see how Progressives forged a new array of cultural and organizational approaches to federal credit that would later proliferate across policy arenas.
{"title":"Credit as a Tool of Statecraft","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.9","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.9","url":null,"abstract":"This chapter shows how Progressives returned to the issue of farm credit distribution in the early 1900s and drew on European precedents to reframe credit allocation as a way for the central government to help people help themselves. American Progressives thus replaced their earlier, more radical farm credit politics with a more moderate vision of government-supported credit as an inexpensive way of supporting self-help. The chapter then considers the Federal Farm Loan Act (FFLA). Compared with other hallmarks of Progressive Era state building, the FFLA seems relatively unimportant. Nevertheless, it was a turning point in the use of selective credit as a tool of federal statecraft in the United States. The FFLA provided federal credit on a national level that was administered through public–private partnerships and bolstered by tax expenditures. By tracing the lead-up to this policy, one can see how Progressives forged a new array of cultural and organizational approaches to federal credit that would later proliferate across policy arenas.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"50 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":"115454336","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 assesses the expansion of credit programs in the New Deal, showing that it was the key moment when credit support came fully into its role as a multipurpose tool of statecraft. The New Deal credit programs mattered because they helped a fractured political system continue to function. Their appeal rested in how credit programs circumvented the nation's deepest, most intractable fissures. Credit programs allowed government officials to promote specific markets without meeting the various demands of central planning. They could be justified on many grounds and framed as consistent with free-market ideals. Equally important, they could be removed from the budget. The latter characteristic did not please the most stalwart of fiscal conservatives, but it did create more options for maneuvering around them. The chapter then considers how the Reconstruction Finance Corporation—the financial giant that funded much of the New Deal—and the housing programs served as the institutional centers for the development of U.S. credit policy.
{"title":"The Rise of Federal Credit Programs","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.12","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.12","url":null,"abstract":"This chapter assesses the expansion of credit programs in the New Deal, showing that it was the key moment when credit support came fully into its role as a multipurpose tool of statecraft. The New Deal credit programs mattered because they helped a fractured political system continue to function. Their appeal rested in how credit programs circumvented the nation's deepest, most intractable fissures. Credit programs allowed government officials to promote specific markets without meeting the various demands of central planning. They could be justified on many grounds and framed as consistent with free-market ideals. Equally important, they could be removed from the budget. The latter characteristic did not please the most stalwart of fiscal conservatives, but it did create more options for maneuvering around them. The chapter then considers how the Reconstruction Finance Corporation—the financial giant that funded much of the New Deal—and the housing programs served as the institutional centers for the development of U.S. credit policy.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"344 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":"116128337","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 discusses the distributional politics of mortgage markets and securitization in the postwar era and explains their transformation in the 1960s as the Federal National Mortgage Association (FNMA/Fannie Mae) was “spun off” from the government and authorized to finance itself by issuing a new kind of government-guaranteed mortgage-backed security. In the second half of the decade, a series of crises marked the end of one era and the beginning of a long transition into a new one marked by scarcity, neoliberalism, and financialization. The end of postwar affluence created a distributional struggle over which social groups would pay for what, and that process played out through the highly contentious and veto-ridden world of budget politics. Housing credit was doubly implicated in these fights, first because it was hit hard and early in market corrections, and second because its credit programs could be used for off-budget accounting. For all that the new approach to securitization reflected a changing relationship between the state and the market, the modern mortgage-backed security continued to reflect the institutional logic of the credit programs: the use of state-promoted financial development and risk redistribution as an alternative to more direct forms of wealth redistribution.
{"title":"A Return to Securitization","authors":"Sarah L. Quinn","doi":"10.2307/j.ctvb938n3.14","DOIUrl":"https://doi.org/10.2307/j.ctvb938n3.14","url":null,"abstract":"This chapter discusses the distributional politics of mortgage markets and securitization in the postwar era and explains their transformation in the 1960s as the Federal National Mortgage Association (FNMA/Fannie Mae) was “spun off” from the government and authorized to finance itself by issuing a new kind of government-guaranteed mortgage-backed security. In the second half of the decade, a series of crises marked the end of one era and the beginning of a long transition into a new one marked by scarcity, neoliberalism, and financialization. The end of postwar affluence created a distributional struggle over which social groups would pay for what, and that process played out through the highly contentious and veto-ridden world of budget politics. Housing credit was doubly implicated in these fights, first because it was hit hard and early in market corrections, and second because its credit programs could be used for off-budget accounting. For all that the new approach to securitization reflected a changing relationship between the state and the market, the modern mortgage-backed security continued to reflect the institutional logic of the credit programs: the use of state-promoted financial development and risk redistribution as an alternative to more direct forms of wealth redistribution.","PeriodicalId":208461,"journal":{"name":"American Bonds","volume":"20 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":"127007450","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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