Omaha daily bee., 1915-12-10
Vast Sums of Insurance
Money in Farm Loans

Address TO Association Of Life Ins. Presidents.
While the assets Of American life Insurance COM
panes have doubled in the last ten years, the amount
loaned by real estate mortgages has Increased
more than and q half times. This has been &C.
complished under many difficulties. including rather
unsatisfactory conditions in many states with respect
to mortgage laws, title registration acts, to say
nothing Of indifference the part Of prospective bot
rowers 10 the Importance OF efficient cement of
their lands pledged security. from which principal
and interest of loans must ultimately be paid. While
the making Of real estate loans under such circum-
stances may to have required the taking merely
OF an ordinary chance trustees of funds
held by life insurance companies are not permitted
to take chances Therefore It lie with much gratifi
cation that able to report that these vast
sums have been invested with practically no loss.
OF the assets held by life insurance companies at
the end Of last year. over 7OOOo0OO invested
in real estate mortgages Existing statistics did not
show a separation OF these investments between farm
loans and other kinds OF real estate securities We
now have, however the statistics collected by our
association, which came from 1S out OF the 80 life
insurance companies in the United States These liS
companies had 9sH cent OF all real estate mort
cages held by American life insurance companies So
the failure to obtain reports from about 100 small
companies involves loss from our compilation If
only about IN per cent OF the total holdings.
These reports show that 1855 100000, 80 90 per
cent. were the end Of 1914 invested by these iiS
companies in farm loans 1893 10000 1924 per cent
invested in other real estate securities In the
United States while the balance OF 32S 1000, Li3
other countries chiefly in Canada. As the value of
farm lands and improvements according to esti-
mates OF the United States Census Bureau, is only
little 30 cent OF the total value OF all real
property in this country that life insurance
companies have shown marked preference for farm
loans as compared with city and village loans.
One hundred and twenty-six OF the companies re-
ported TO the association. their farm mortgages by
states. These companies hold about 81 cent OF all
such loans made by American life insurance com
psnies Their figures OF interest showing
preference for farm loans In sections Of the country
where farming has achieved Its highest development
and supplies Of local capital comparatively limited
Of the total of about t648 100000 OF farm loans
only $4,000 In the New England states, and 1884,
900 in the middle Atlantic states while there are
10000 in the northwestern group; SS7 100000 in
the WESTERN &l7 900 In the central northern
I2oO0oOOO In the Gulf Mississippi valley; $4,000 900
In tho South Atlantic and Sl6,0O0OOO in the Pacific
group OF states That these holdings OF farm mort
cages, by life insurance companies. in the various
groups OF have little relation to the amount Of
all farm mortgages outstanding lie shown by United
States figures for 1910 which indicate that the
total farm mortgages in New England and the middle
Atlantic states where life insurance companies have
loaned less than 100000 nearly two and half
times great they in the south Atlantic and
lower Mississippi valley states, where the life in
companies have loaned SAL 100000. These
discrepancies between total farm mortgages and the
amount OF farm loans made by life insurance COM
panies undoubtedly accounted for by economic
factors, chief amoung which is the relative supply
OF home capital such as is afforded in the New Eng
land states by sevings banks and by private investors
Another point quite as interesting is the
amount OF money which has been loaned in what is
generally termed the Great Corn Belt" where farm
values the highest. In. the northwestern
group the farm mortgages held by life insurance
companies at the end Of 1914 amounted to "a cent
of the total farm loans reported for these states by
the United States Census Bureau in 1910; in the south
western group they amounted 50 per cent; in the
central northern to rs cent. With such showing
this II is wonder find that life insurance
companies a class today the largest holders of
farm mortgages in the United States Even the banks
OF the country including both commercial and savings
banks held on June 30, 1914 according to the report
OF the comptroller of currency but 10000 of farm
mortgages-S1OoO 100000 less than held by life in
surance companies at the same time
We have known In general way. insurance
men. that a vast amount OF money was being loaned
by life insurance companies farm lands and in
addition that an even larger sum was being loaned
city and village real estate We have been proud
OF the fact that the funds under control were
helping to develop the country in all branches of its
economic progress We have at times thought that
the very large OF money loaned city and VIII
lags property In the middle Atlantic states might
mean that they were being specially favored by life
insurance companies Some of did not stop TO
consider that is impossible to determine the
ton OF favoritism from the amount loaned without
giving consideration to relative real estate values In
the various states and localities. We knew that city
and village real estate values in the
| nous. but did not know how much they exceeded
those other parts of the country 1t was therefore
interesting to me- sure Il will be to you, to
find in this report OF the association comparison OF
farm other real estate loans In the various
of states In their percentage relations to
corresponding real estate values Among other things
is shown that the OF $685. 00o0 loaned
real estate other than farms. in the middle At
lantic states is little less than per of the
city and village property values of these states So
when learn from the tabulation that life In
surance companies have loaned farms in the north
western group OF states 81 cent Of total farm
values, and In the southwestern group of states
nearly az per cent Of farm values, impressed
with the notion that life insurance companies have
distributed their funds in accord with economic Law
and with fair regard for the needs OF all classes In
further support OF this proposition learn also thai
| total farm values throughout the United States
life insurance companies have loaned ls6 per cent
while total city and village values they have Loaned
but l.2s per cent These figures seem TO prove tina
90 far at least life insurance companies con
oerned. farmers have obtained more In proportion tS
the security they have offer than city and villag,
folks have been able TO obtain their real estate
| holdings.