Plantation Mortgage-Backed Securities: Evidence from Surinam in the 18th Century

2020/01/01 by Abe de Jong, Tim Kooijmans, Peter Koudijs · 2 citations
Economics, Econometrics and Finance · Social Sciences · #Banking stability, regulation, efficiency #Caribbean history, culture, and politics #Colonialism, slavery, and trade #Housing Market and Economics #Insurance and Financial Risk Management

paper · pdf · doi:10.2139/ssrn.3610648

openalex publication_date 2022/01/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01

Abstract

In the second half of the 18th 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.

Citations

• Financial Intermediation and Delegated Monitoring
• Theory of the firm: Managerial behavior, agency costs and ownership structure

Cited by

• British credit crisis of 1772–1773 [wikipedia]
• Investment fund [wikipedia]

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