Three Failures

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.