The particular emphasis of this essay is on developing mortgage markets and bond markets together, so they can potentially reinforce each other. There are only two fundamental choices for financing mortgages: deposits or bonds. Of course, there is also some combination of the two, which is probably what you want, so that you do have a bond-based alternative as part of the housing finance system. There have been many experiments in establishing various forms of bond-based housing finance around the world (I include mortgage-backed securities as a kind of bond). Loic Chiquier, Olivier Hassler and Michael Lea in an excellent paper, “Mortgage Securities in Emerging Markets,” [World Bank Policy Research Working Paper 3370, August 2004] summarize these experiments and the subsequent results. They conclude that there have been a few clear successes, some promising cases still in the early stages, and a number of disappointments. One of their most important conclusions is that simpler instruments and structures have a better chance of success, based on numerous specific cases in a wide variety of countries. My purpose is to explore the principles which I believe underlie all the cases, using as illustrations the American experience. Let us consider the United States when it was an emerging economy and a new country during the 1790s. The two intellectual giants of the American founding period were Alexander Hamilton and Thomas Jefferson. Hamilton and Jefferson agreed on the centrality of property ownership, although they disagreed on most things. For Hamilton, secure property rights were essential for the development of the future commercial and economic power he envisioned: his views were confirmed by subsequent history.