Roy E. Crummer Biography

In 1929 Roy E. Crummer, a bond agent from Topeka, Kansas, was recruited by Governor-elect Doyle E. Carlton help rescue Florida from the collapse of the land boom of 1921-1926. During that time, the state had borrowed enormous sums of money to build the infrastructure necessary to accommodate the expected increase in population.

As a result, Florida’s municipalities were ill-prepared for the hard economic times caused by the collapse. Approximately 85% of the municipal debt in Florida defaulted, a level unparalleled in United States history.

Crummer’s task was to visit each county in the state to determine its debt burden and to prepare a plan to restore the financial viability of the Florida’s municipalities. At the time, the state had no central agency to record the total debt obligation on a piece of property. Therefore one parcel might be obligated for debt service for a city, a county, and various public works projects, but neither the county nor the state knew the total amount of debt obligation.

Working with his team, Crummer formulated a program for restructuring municipal debt by reducing interest and deferring principal and interest so that the amount of debt service would be less than the municipality’s cash flow from taxes.

The result was the creation of a mini-boom in municipal restructuring in the state. During this time many bond agents profited from fees and from purchasing defaulted interest coupons that were subsequently sold at a profit. Although most of Florida’s defaults had been restructured prior to the mid-1930s, many municipalities were repaying debt from the land boom well into the 1950s.

Crummer’s model for restructuring debt has been used for other municipal defaults and for international debts. He and his team are widely credited with restoring the financial health of Florida’s municipal governments.