The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-12-12
A PHASE OF HARD TIMES.

While the present financial read
justment is being reflected in in
creased borrowing by policyholders on
their life Insurance, the high peak
of such loans that was reached in
1914 is not in sight. according to
statistics presented at the closing SEES
sion of the fifteenth annual conven-
ton of the Association of Life In
surance Presidents. Figures received
from co mics transacting SO per
cent of the life insurance business N
the United States showed that their
policy loans on September 80 of this
year amounted to 1872 million dollars
Based on the September 80 figures,
the life insurance men calculate that
the policy loans for all United States
companies now approximate one bill
lion dollars. There is a wide differ
ence in the percentage of borrowing
as between different sections of the
country, the farmers leading the city
people in this respect.
These and other current develop
ments in the mortgaging of life in
surance policies were submitted by
Henry S. Nollen of Des Moines, presi-
dent Of 40 Equitable Life Insurance
company of Iowa. about IS months
ago, the demand for loans on policies
began to show a marked increase,
which has risen steadily in all of the
companies thruout the country" said
Mr.. Nollen. "a comparison of the
| geographical distribution in which the
lowest and highest ratios prevailed,
| led to an investigation of the pre-
dominating activities of the popula-
ton in each group. AS a general
rule, the higher loan rates CORE
spond to those districts in which the
larger percentage of rural population
prevails, rejecting the drop in prices
Of farm products"
Altho life companies do not have a
right to make the inquiry, a number
of policyhoIders voluntarily stated the
/ needs that compelled them to apply
for a policy loan, and from this source
! it is found that, particularly within
! the past Is months, the following rea-
sons have prevailed: To pay pre-
miums on policies; to pay interest
| due on obligations to banks; to pay
maturing notes to banks. or portions
] of Indebtedness to procure extensions
| on the balance; to pay outstanding
| accounts to merchants and for pro-
! fessional service; to pay rental on
4 farms; to pay taxes-particularly dur
ing the last half of 1921; to purchase
supplies for current needs of equip
ment, food and clothing; to meet the
pressing demand of creditors who
could force premature sale of stock
or grain at a sacrifice; in some in
stances, to invest the proceeds of the
loans at a profit.
A survey of the occupations of pol
| icyhoIders who have recently bor-
rowed on their>. policies discloses the
fact that they represent every branch
of human activity. and no class or
! locality has remained exempt. Bank
ers, as well as farmers; merchants
and those engaged in the profession;
manufacturers and executives of large
| enterpriseA as well as employees
! are mingled in the list of borrowers,
which may account for the fact that
in the past year the average amount
! loaned to each poIicyholder has stead
lily risen.
The various reasons for their de-
mands lay all be Summarized it is
said in one underlying cause-"finan-
cial stringency."