The Forgotten Quest for an Agricultural Mortgage Bank
An 1877 op-ed from the Seattle Daily Intelligencer argues that the Territory's economic future depends on fixing the rural credit crunch.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
A sensible writer and sound economist in California is arguing for the establishment in that State of a mortgage bank in the interest of the farmers. This is unquestionably one of the most urgent needs of California, and the founding of such an institution in this Territory would prove the corner-stone of our advancement in the matter of Statehood. There is no permanence, no social symmetry, where agriculture does not flourish. Society is, at best, only nomadic when not anchored to the soil by tillage. The commercial banks perform an invaluable service to society, but they are inadequate to meet the demands of the land-owner. Collateral banks of course confine their operations to stocks, and the savings-banks, though they possess extraordinarily large deposits, generally employ their money in the city, leaving the rural borrower uncared for. We want here a system of agricultural credit resembling the best systems established on the continent of Europe. A company embodying these ideas might be organized to afford a remunerative profit to stockholders and promote real estate credit. Its capital would be locked up in mortgages based upon property of two or three-fold security, and its capital would be set free by issuing and selling its own bonds based upon its fund of mortgages.
“Society is, at best, only nomadic when not anchored to the soil by tillage.”
The 1877 plea for a state-backed agricultural lender highlights a perennial Seattle-area struggle: the tension between urban wealth concentration and the needs of rural or local producers. Just as the writer argued that banks focus too heavily on city stocks and savings, today's debate over housing and small business lending echoes this historic anxiety about who gets access to capital.
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