Covered Farm Mortgage Bonds in the Late Nineteenth Century U.S

35 Pages Posted: 2 Aug 2010 Last revised: 25 Aug 2010

See all articles by Kenneth Snowden

Kenneth Snowden

University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics; National Bureau of Economic Research (NBER)

Date Written: July 2010

Abstract

Covered mortgage bonds have been used successfully in Europe for two centuries, but failed in the U.S. when introduced as farm mortgage debentures in the 1880s. Using firm-level data and a sample of loans made by one Kansas mortgage company, I find that debenture programs grew out of established loan brokerage operations and were used to fund mortgages that were difficult to broker because of size, term or risk characteristics. Debentures broadened access to the interregional mortgage market and facilitated an expansion of western farm mortgage debt before the innovation failed in the mortgage crisis of the 1890s.

Suggested Citation

Snowden, Kenneth, Covered Farm Mortgage Bonds in the Late Nineteenth Century U.S (July 2010). NBER Working Paper No. w16242. Available at SSRN: https://ssrn.com/abstract=1651426

Kenneth Snowden (Contact Author)

University of North Carolina (UNC) at Greensboro - Bryan School of Business & Economics ( email )

401 Bryan Building
Greensboro, NC 27402-6179
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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