Omaha daily bee., 1922-01-15
Insurance Funds
Flowing to City
Mortgage Field
Demands for Building Loans
Attract Surplus Money
From Vaults Of Old
Line Companies.
BY HOLLAND.

by uOLLHNps
In the 10 years ending AeNenr1ei
| OF last year loans made on mort
cages by lie insurance companies oI
the United States increased By
si.2S0.000,0o0. Al the end Of 1911
loans OF this kind aggregated Sl,22s,'
100000. On the first OF November
last year S2,ios,0oo.Ooo Of insurance
funds was invested In mortgage loans
These figures are semioiileia'
hut I, was not only investment IN
mortgages by which the lie insuf-
anee companies were able, especial
" after the European war began
10 aid the people and TO facilitate
commercial and building operations
but these companies also we're oil
great service 10 the government.
From the funds OF these institutions
have been taken within six years
S772000000 all invested IN United
States government bonds.
city Demand. Increase.
Investigation Of the official figurcg
show that IN the year whiek has Just
erdei the amount af money lent upon
tho security OF MORTGAGES placed upon
farm properties surpaHses the sums lent
upon city properly, Sincc early fall, how
ever Il has been observed that gradually
demands for loans upon the security of
city properties have been Increasing ana
II tho Increase J. maintained during the
present year tten tho HE insurance COM
panlrs of the United states VIII have
placed loans on city properties IN excess
OF tho loans on farms
How greatly the insurance funds have
awaited NJ time when aid was necessary
Is revealed By the :act that now money
loaned on real estate J. greatly In eA-
cess OF the money for which the security
was the obligations OF railroad conp"n-
ich Railroad securities wers, 10 years
ago. especially favored for investment
by life Insurance companies. In fact were
~ not for aid o. this Kind, TIE railroad
companies would have been seriously en-.
barrassod Soon after tho beginning OF
the European war railroad securities were
not 20 greatly favored by Insurance COM
llnlcs as were tesl estate mortgages.
out of the $500. 10000 OF assets OF the
lfo insurance companies, nearly one-third
has been lent upon the security OF mort
gages.
Not until the semloffcal figures were
obtained was there realization OF the
magnitude OF the financing carried on ty
lfo INSURANCE companies o. tne ohitea
States Ten years ago tfese companies.
on tho whole. preferred railroad securi-
ties; then the aggregate OF railroad bonds
held by the Insurance companies was
In amount of more than one-third OF
the loans made by the Insurance com
panies. Today the aggregate OF these
loans II only 25 per cent.
Tnks Government Bonds.
Not until 1911 did the insurance COM
panlea invest any great part OF their
funds In United states government bonds.
Ttey were. instead. lending on mortgage
security. upon railroad security and to
policy holders They were also lending
upon state, county and municipal bonds.
hut they were not tempted 10 make
heavy investments In government bonds.
The chief reasoh for thi1 reluctance prob
ably wss tho small return on govern
iucnt bonds. In fact In the first months
OF the year when the European war be-
gan, the Insurance companies lad invest
cd only about 100000 In government
bonds.
The exigenccs which were occasioned
by the European war. and the vital need
there was for lending to the federal gov
ernment, caused an immediate change
in the policy of the lNe insurance COM
panies toward government bonds 1t was
rapid change. In itself telling of i'm
pcrative government needs. In 1914 the
insurance companies held in tteIr assets
only $500. 600 in government bonds Three
years later the amount had increased TO
$4,000 900. Since 1917 the insurance COM
panies have bought government bonds ag-
gregating s772,0o000.
Subscribed to Loans.
Perhaps in no other way can there be as
good illustration OF response which was
made TO the appeal from the government
Tor funds. Probably the greater part of
these government bonds now owned by
The insurance companies consists of Lib |
crty bonds and Victory notes. The Amer
lean he insurance companies furnished |
not far from one-twenteth part of the |
entire amount received by the government |
for Liberty bonds and Victory notes. It |
was said recently by Asa s. Wing, who
is president Of one o. the large life in
surance companies of Philadelphia and |
to secure accurate statistics which told |
OF the investments made by the life I
that "the lie insurance COM |
panies of the United States have con-
trfbuted lberally to two appealing de- |
mands for money during the war and |
since. namely, United States government |
tords and real estate mortgage loans. |
Considerably more than one-half of the
fosal investment made by these Ameri- |
can institutions since 1914 were in Unit |
ed States government bonds and in real !
estate mortgage loans"
Mr. Wing also called attention to the
service which these American institu- I
tions have been able to perform for I
American agriculture. He said that during |
thS last six years It has been vital for
this nation, for itself. and for the part |
that 1t has played in world affairs, that I
our agriculture should be stimulated to /
the highest productivity. Stimulus Of that
kind was furnished by these institutions |
it Building Necessities.
The tendency towards increased loans |
upon city properties is Interpreted as |
meaning that it reflects an imperative |
demand which 10 due to the building sit-
nation In our cities Not many persons /
realize the magnitude os deferred build.
Ing, Now the insurance companies are
favorng and welcoming applications for
ioans upon real estate property in the |
cities of the United States because these
loans, II made. will go far towards the |
renewal OF the now deferred building |
operations In all the cities of the United |
States.