TY - JOUR
T1 - Plantation mortgage-backed securities
T2 - evidence from Surinam in the eighteenth century
AU - De Jong, Abe
AU - Kooijmans, Tim
AU - Koudijs, Peter
N1 - Funding Information:
We gratefully acknowledge financial support from the Institute for New Economic Thinking, Stanford University, and Erasmus University Rotterdam. We are also grateful for comments from Dan Bogart (editor), Joost Jonker, Lyndon Moore, John Turner, Garry Twite, Christiaan van Bochove, Chris Veld, Kirsten Wandschneider, four anonymous referees, and seminar and conference participants at Queen’s University Belfast, Asia-Pacific Economic and Business History Conference (2018), and World Economic History Conference (2018). Dave Boone and Laurien van der Werff provided excellent research assistance. We thank Christiaan van Bochove, Oscar Gelderblom, and Joost Jonker for sharing Amsterdam security auction data. An earlier version of the paper circulated as “Intermediation in Mortgage-Backed Securities: The Plantation Business of F.W. Hudig, 1759–1797.”
Publisher Copyright:
© 2023 The Author(s).
PY - 2023/9
Y1 - 2023/9
N2 - In the second half of the eighteenth century, Dutch bankers channeled investors' funds to sugar and coffee plantations in the Caribbean, Surinam in particular. Agency problems between plantation owners, bankers, and investors led to an arrangement called negotiaties. Bankers oversaw plantations' cash flows and placed mortgage debt with investors. We demonstrate how this securitization arrangement worked using market-wide data and detailed records from banker F. W. Hudig. During the boom, debt contracts and their securitization were an effective solution for planters, bankers, and investors. However, the market crashed after an oversupply of credit. This led to inefficient restructuring due to debt overhang.
AB - In the second half of the eighteenth century, Dutch bankers channeled investors' funds to sugar and coffee plantations in the Caribbean, Surinam in particular. Agency problems between plantation owners, bankers, and investors led to an arrangement called negotiaties. Bankers oversaw plantations' cash flows and placed mortgage debt with investors. We demonstrate how this securitization arrangement worked using market-wide data and detailed records from banker F. W. Hudig. During the boom, debt contracts and their securitization were an effective solution for planters, bankers, and investors. However, the market crashed after an oversupply of credit. This led to inefficient restructuring due to debt overhang.
UR - http://www.scopus.com/inward/record.url?scp=85166150654&partnerID=8YFLogxK
U2 - 10.1017/S002205072300027X
DO - 10.1017/S002205072300027X
M3 - Article
AN - SCOPUS:85166150654
SN - 0022-0507
VL - 83
SP - 874
EP - 911
JO - The Journal of Economic History
JF - The Journal of Economic History
IS - 3
ER -