American bonds: How credit markets shaped a nation Sarah L. Quinn Princeton University Press, 2019, 312 pp., £30.00 (hb), ISBN: 9780691156750
| Published date | 01 March 2020 |
| Author | FABIEN FOUREAULT |
| Date | 01 March 2020 |
| DOI | http://doi.org/10.1111/padm.12635 |
BOOK REVIEW
American bonds: How credit markets shaped
a nation
Sarah L. Quinn
Princeton University Press, 2019, 312 pp., £30.00 (hb), ISBN: 9780691156750
Sarah Quinn has written an interesting book about the history of credit in the USA through the lenses of both federal
credit programmes and the financial technique of securitization in the twin areas of land and housing. American
Bonds is grounded in economic and political sociology, but it is also cultural (focused on moral economy) and histori-
cal: the US case is studied over more than two centuries, as the country shifted from agriculture to an urbanized
economy. The book is organized in two parts that are both chronological and analytical.
The first part dealsmainly with farming in the nineteenth century.Chapter two shows how old the US involvement
in credit and securitization is. As early as the 1780s, the government started sellingland on credit to fund the revolu-
tionary wardebt. From the 1860s, it granted land,provided loans and guaranteesto the railways in an effort to develop
infrastructuresacross the nation that startedat the end of the eighteenth century.The use of mortgage-backed bonds
was experimented with in the 1830s South, where they could be secured not only on land but also on slaves. During
that time an ecology of financial actors was formed (individuals, insurancecompanies, banks and intermediaries) that
fuelled a dynamicsof boom and bust cycles as new land opportunities were discovered. In chapter three,Sarah Quinn
analyses three failed experiments in credit distribution that could move money into the periphery of the country in a
more reliable way. They reflected different and conflicting conceptions of freedom and democracy: the laissez-faire
vision along the western frontier, the cooperative model of farmers in Texas and the central ‘subtreasury’project of
the populists. Theyfailed for different reasons but paved theway for new solutions at the turn of the twentieth cen-
tury. Chapter four examines the genesis of the Federal FarmLoan Act of 1916 that created a new system of lending
organizations,tied to the federal government in public–private partnershipsand funded through tax expenditures,con-
tra anti-statist sentiments. Progressives were able to reach a compromise by taking inspiration from the German sys-
tem and by reinterpreting state involvement,not as interference in the freemarket, but as supporting self-help.
The second part deals mainly with housing during the twentieth century. Chapter five sketches the transition of
the US economy from one based on farming to one built around cities. In this context cooperative lenders known as
‘thrifts’emerged that sold, with mortgages, the American dream of home-ownership. The First World War helped
the government experiment with directly building homes for workers operating in the defence industries. This set
the stage for the federal housing programmes of the 1930s. The rise and fall of the mortgage bond market in the
1920s is the subject of chapter six. Predicated on the idea of shareholder democracy, this unregulated market gave
way to a bubble and all kinds of abuses of small investors.
This also set thestage for the set of policies known asthe New Deal, treated in chapter seven.Sarah Quinn shows
that housing was a significant part of these policies and focusesmore specifically on the Reconstruction Finance Cor-
poration (RFC).Its creation was a direct, government responseto the crash of 1931 and the drying up of credit, but the
organization ended up not only supporting the banks but also funding many of the New Deal programmes in agricul-
ture, infrastructure and housing. FannieMae was conceptualized as a kind of continuation of the RFC and entrenched
DOI: 10.1111/padm.12635
Public Administration. 2020;98:277–278.wileyonlinelibrary.com/journal/padm© 2020 John Wiley & Sons Ltd277
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