Farm loans of life insurance companies

MISSING IMAGE

Material Information

Title:
Farm loans of life insurance companies
Physical Description:
Serial
Creator:
United States -- Bureau of Agricultural Economics
Wickens, David L
United States -- Dept. of Agriculture
United States -- Bureau of Agricultural Economics
Publication Date:

Subjects

Genre:
serial   ( sobekcm )

Record Information

Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 028447933
oclc - 506628895
System ID:
AA00017376:00001


This item is only available as the following downloads:


Full Text
EA, Feo Ia3^ ^
iF" 3July, 1932


rx 3 UNITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics

,1.....


FARM LOANS OF LIFE INSURANCE COMPANIES
(A Preliminary Report)_/



6& By David L. Wickens, Agricultural Economist.
-- -- Division of Agricultural Finance


POSITORY
Life insurance companies are the most important source of long-term farm
rit. Soon after 1920 these agencies surpassed all other sources in the vol-
..f farm loans held; and in 1928, their estimated holdings comprised nearly
r cent of all farm-mortgage credit in the United States.

This report presents the volume of outstanding loans in each State, of
identical life insurance companies in each year of the 5-year period of
to 1931 (Table 1) and the amount of new loans made in each State by the
... companies during each of the years 1927 to 1930. (Table 2.) Outstanding
Xjoans of leading companies are given by months since 1923, and weekly invest-
a: tts since 1928 are given.

i : The period 1927-1931 included the turning point in the direction of
2!!iii trend of total long-term farm credit in the United States as well as for life
i:: surface. companies, and within these years farm loans from life companies in
Aiht-..hree-fourths of the States reached a peak from which they have since receded.

S"' The 226 companies reporting for each year represent 98 per cent of the
V,'oi:lrume of the admitted assets of all legal reserve life companies in the United
St,.;.:$tates as of 1927 status. Of this number, 180 companies reported having loans
"'4j farm real estate. The West North Central, with 108 individual companies
hiaving farm loans, had the largest number among geographic divisions, while
Texas with 79 companies loaning had the largest number for any cne State. 2/

1/ This report has been made possible by information received from life insurance companies coverinE their farm-loan
operationsA. Reports are obtained only from those companies having assets of 5100.000 or more. Despite the compara-
tively complete representation of total assets by companies included in this summary it should not be assumed ihat
the farm loans reported necessarily represent in all csrs a :corresponding proportion or rarm loans -eld by all in
surance companies.
Outstanding loans ar those reported as of December 31 of each year but are here presented as of January 1
of the year following in order to conform to usage of the Bureau of Agricultural Economics with regard to other data
on farm credit and with Census practice. Data for the calendar year 1931 were not available when this report was
compiled.

2/ Total farm-mortgage credit in each State and the proportions of all such credit provided by all principal lending
agencies are presented in Technical Bulletin No. 288. Farm Mortgagc Credit. U S. Department of Agriculture.


,!! .! ..; .; i


..... ... ..., ..




























i.. a.J ft ^b 6 77
w Jersey t 608 99
Panaslyania : 59: qq
Milddlae Atlantic: 921 99
Chio :102: 99
Indiana : 94: 99
Illnolm :113: 98
Michilmn 81018 99
Wisnsijn aM- 1M. gg
E. N. Oantral :139: 99
Minnesota 89: 99
lows I9gt 99
Mismourl 117: 95
North Dakota 654 99
Both Dakota a 77: 99
Nebraska a 94: 99
hawa :1113 Is
V. N. OCentral 155: 91
Delaware 1 147 99
IxylanA : 71: 99
Dist.OClalbs a 771 99
Tirinia 1 67: 99
Wast Tirginia 86: 99
North Oarolinat 721 99
South Carolina: 53 99
Georgia : 76: 99
.l.wlaa : 75, qq
South Atlantic :131;: 9
Kentufdh :a W 99
Tennesm e : 51 99
Alabama a 69. 99

3. 8. central :110: 99
Arkausas 1 91: 99
Louiaism : 60: 99
Oklahoma :100: 99
Z : .111." 1
W. Oentral :149:. 9
Montana 8 r68 98
Idaho 1 47: 99
Wyomung : 531 99
Oolorado : 89: 99
ew Mexico : 3: 9
Arizona 6: 99
Utah t 6 99
Mountain 1116: 99
fWasbington : 62: 99
Oregon 1 6: 99
Waliforla I 15:. qQ
Poific 97: 99
N!ITS B3T!3 :226: 93


-4,t
2 4o
3 40
: 44
8 19

75
Z 52
57
r 3
8 49
t 62
: 108
a
8 13
1 1
16
11



59
23
31
231

53
18
17

99
.32
8 21
I15
42
8 17
17
t 6
72
8 11
18

39
: 10


1 4541 3591 287: 2.5O
* 57:717. 59,325: 58,9365: .T
1.LIP. lq 99' ].91I23 go.,
i04952io 103.241: 99921 9,16:
2 64.9%4: 173.:7913.- 175.920: 1-77.8491
t 5,741: 6.0os: 19721 1796?:
: 17.412 ig.u, a. ia 2.067
* 350.1856. 362.247 363.331: 3614.776
138,900: 1423.092: 141,397 1:37.15
S47.17 1498. 112





( 37 l98 60>,7b2: 146,636: Ite.S5
1 3314.: 3A355: 30. 7
113,601. 11,5651 11491 1136.1 ;
:148..279 149.308: lI47.: 140.7811
Sib.1 T: i4.a1a7 i1.0"9:. 114".17
S,230,642:1.244,96:11,223127 .201.,671:
* 73,: 7 -1 5 46i
S 510. 591: 653: 933.
S : 2,711:
7,931 7.6.111 7.2Te,063, *
411,1 6 6L300
42! 4341 47 .891
10.902 11,067., 11.219: 11.985:
6.9184: 6,335t 6,i4li 6,0151
36,2361 33,010: 30,553: 28.2B81
'!a: 8fe. 1.1181 1-171-
63.7115. 60,012, 57.652, 58.5691
26.573: 26,770: 26.657* 26.106t
1 39.131: 40,306 39.986: 37.2621
10.508. 9.:768 9.3143s 6,16:
22.748 2.2 .227:
99,660: 99.314, 97.213: 93,719t
16,632: 17.8U7T 11.100: 16.048,
7,713: 1,2308 8,.54 8,8141
76,.723 72.617. 681.53: 66,790:
l-0942 l154.478i 151.610BI 1221
252,2321 253,212: 252.901: 25o,.42:
-9%'.9 9-001: 9.P71 9 .W1,
13,232* 13.3553 13.W2' 13:.104
392: 3811 4i,. 1 50W
5.597: 5,9117: 6,077 6,106.
2,412: 2,0899 1,660r 1.5131
2,439- 2.559: 2.241: 3,11,:
S17c 972: 1,061: 1,0141
35,147: 34.3951 34.3565 33.905:
* 20.8891 21,15901 22.1I01C 3.10tW
11,581 12.627: 13.111: 13.880:
1 22.188. 70q1 2qlol g .
54.6581 57.11gi 5X.728. 59,816l
e2,087,1436.2,111719.7 2,07.695:2,063.335:


J-n
,764
-ssa


3657,19L .
AP ,LPt


1 .i ,uur..
W,0I.





5597




1:1




2,.077
Ism









6,17
35.371









U, .!!
6.07P


29.

-i
241453

2 33
P.013.6f3


W.Cl
.. ii,
.... iin;,i


I/ Percentage tlich asets of rwrtiei companies ae of aset-s of all liemiM
or operating companies.


-- i i i IIIIIIII I


Ji M Jm


it







UNITED STATES DEPARTMENT OF AGRICULTURE
Bureau of Agricultural Economics
Table 2.-N-ew farm mortgage loans mad by life insurance
companies, by year V


Geographic :
divisioa n 1927 a 1928 z 1929 a 1930
and. state :J! ;.
l. dollar 1.000 dollars1000 llare 1.000 : dollar
: I
Maine :
New Kamphire :
Vermont : :
Masseachusetts *
hode Is land : :
Connectic tut J2--
New England a
ew TYork 12
low Jersq : 12 a
Penumrylvaia-- 20 a -
Middle Atlantic a :32 : 12
Ohio 7.916 6,677 5,66 : 5,119
Indiana : 12,976 11,27? 10o,613 : 9.839
Illinois : 24406 22,954 17,983 : 18,318
Michigan : 1.202 959 770 a 1.024
Wisconsin 3.261 a 3* 574 : 2,.746 2,18q
last North Central : 149.761 a 45,1437 : 37.780 36,1498
Minnesota : 20,009 14,274 8.890: 6,432
Iowa : 61,62 58,802 147,604 : 47,055
Missouri a 17.112 15,641 11.488 a 12,111
North Dakota : 4,864 3,334 2,922: 1.771
South Dakota : 14,601 13,056 ,8143 8,123
Nebmraska : 18,827 15,508 a 15,17 11.7
Imeas ; 20.909 18.598 17.15 a 17.671
West North Central a 157,942 a 142.213 : 112,735 a 104,710
Delaware : 1 214 : -- 14
Maryland : 204 97 101 : 137
Dist. Columbia : 2,711 : -
Virginia a 675 534 401 i 418
West Virginia a 147 83 27 a 188
North Carolina : 1,973 1,3147 1,879 a 1.516
South Carolina 773 689 995 : 583
Georgia : 2,565 2,074 2,182 1.897
Florida _371 a 19 a 211 163
South Atlantio ; 6,607 : 5,167 8 5.509 14.906
Kentucky 2,488 2,199 1,756 a 1.72
Tennessee a 5.225 3.657 2,973 : 2,687
Alabama : 821. 769 a1 357T3
MisissippiN a 2.827 a 1.510 a 1.61 a 1.698
last South Central a 11,361 a s.455 a 6,792 6.614
Arkansas 3, 68 2,236 4 1,73 1,935
Louisiana : 1,445 1,270 1,3.43 3 871
Oklah.oma : 7,509 7,540 7.76M 71.474
Tex aIM 214.647 21.1jS a 1i.6 a 17.876
West South Central 37,569 a 32,50o4 33,867 a 28,156
Montana : 1,1470 1.654 1,482 : 697
Idaho : 2,091 2.261 1,433 : 1.862
Wyoming : 20 814 23 : 22
Colorado : 92 1,014 691 : 725
Nw UMexzico : 519 127 271 : 193
Arizona : 582 265 1145 757
Utah : 237 207 85 8 88
Ngevada 5 -- : 252 115
Mountain 5,816 5.612 a 14.131 4,1459
Washington 2,916 2,81 a 3,364 : 3,10
Oregon a 2,243 1,9614 1,902 : 1,627
California 1._4.469 14.712 1.11_7 a 1.725
Pacific : 9.624 a 9,1495 : 8,603 8,1492
UNITED SIATZES 275,652 248,915 a 212,.467 193,.s47
I/ For number and proportion of companies represented, see Table 1.




FAM MRGGSOTTNIG IEISRNECMAIS YMNH
MILI ONSi =ii==
OFi
iii OLLii ARSiiii~ii
1.600 ....
!ii Ile

1.50
1.40



1.300



1.20

i/lLLIltLidiJ~kaL




Outstanding Farm Loans


The distribution of the farm-loan business of the companies shows a
great predominance in the four central divisions which center on the Mississippi
Valley. Approximately 76 per cent of the total farm loans of insurance com-
panies is in the North Central States. 58 per cent being in the West North
Central division, and 24 per cent in the State of Iowa. For many years the
companies have done comparatively little loaning on farm property in the New
England and Middle Atlantic States where local supplies of capital are usually
in excess of local demands.

Outstanding farm loans of insurance companies reached a peak for the
country as a whole in the latter part of 1927 and have since declined. (Fig. 1.)
In the West North Central and West South Central Divisions also. the peaks
were reached in that year. In New England, Middle Atlantic, and Mountain
regions loans have been declining throughout the period covered Only in two
geographic divisions, the East North Central and the Pacific. was the total
volume of farm loans held by the companies larger in 1931 than at any previous
date. Nine States Washington, Nevada, Texas, Illinois, Wisconsin, Michigan,
West Virginia, North Carolina, and Maryland had more farm real estate credit
from this source than during earlier years.

Among the variety of factors that have produced this important reversal
in trend of outstanding credit have been the smaller amounts granted on new and
renewed loans because of the declining value of farm land, and reduction by
payment on principal necessary to bring indebtedness within manageable limits,
In addition, considerable amounts of credit have been extinguished through
foreclosure or voluntary assignment of title.

Farm loans of life insurance companies are made almost exclusively on
first-mortgage security, consequently the figures given in Tables 1 and 2
exclude second and other junior liens which have sometimes constituted a con-
siderable part of total farm-mortgage credit.

New Loans

New loans, in which are often included loans renewed, have declined
markedly since 1927 when a total of 279,000.000 was reported by the 226 com-
panies as compared with 194,000,000 in 1930. New loans during these four years
have represented successively smaller proportions of loans outstanding as in-
dicated by the percentages, 13.2, 11.9, 10.3, and 9.6 Loans in most geographic
divisions have shown the same declining tendency. Only in the Pacific region
has the volume of new credit been well sustained. (Table P.)
Weekly Investments in Farm-Mortgage Loans

The volume of new investments in farm-mortgage loans declined more than
one-half from 1928 to 1932 as indicated by the weekly reports of 25 leading
companies representing 69 per cent of the life insurance in force in the United
States and Canada.3/ Weekly purchases at the beginning of thit. 4-year period
averaged well above $3,000,000. but in the early months of 1932 purchases had
declined to less than $1,300,000 per week. (Table 3.)

3/ Data from New York Evening Post Occasional slight changes in t.he number of compontis in:luderl Ln this series
do not materially alter the total results.


-5-







FAR M MORTGAGE LOAN S AN D PER CENT LOAN 5 ARE 0 F TOTAL WEE KLY I NVESTIVI ENTS,

LOANS 25 LIFE INSURANCE COMPAIES. 1928-1932* LOANS
MILLIONS
OF PIER CENT
DOLLARS TOTAL
Loons on form property INVESTMENTS
4.8
Percentaqe of total weekly investments 16
on form property

4.2 14

Ilk
3.6 12
lie 0
IF
3.0 1'0


Sol
2.4 8
7


6



1. 2 4



6 2
8 WEEKS MOVING AVERAGE


0 1...1 1:1 L-L I 1- 1. 0
JAN. APIL JULY '*cT. JAN. APR. JULY act. JAN. APR, JUVY OCT. JAN, "R. JULY OCT. JAN, AO JULY Vcr.
1928 1929 1930 1931 1932
U.S. DEPARTMENT OF AGRICULTURE NEr,.24631 BURM'0FAWKJjLTURALECO"I,S "';aA
FrCURF- 2 WEEKLY INVESTMENTS IN FA RM MOkTGAGES 4Y LIFE IN6qRANCE COMPANIES HAVE 1), 111''
ED FROM MORE THAN THREE MILLION DOLLARS 1,N 15,20 'TO ONE MILLION 006LARS I N 193Z# It
PORTION OF TOTAL NVto 0 VT U14111
I T T 'jtii iro -*,v
LY 10 PER 09 *0111.111i"On






Table 3. Average Weekly Investments in Farm Mortgages


Amount and proportion


Amount
(1000 dollars)

Average per cent of
total investments


1928




li/ 3,130


11.4


1/ Last 28 weeks.


2/ First 20 weeks.


i':"

%"




!ii :


-7-


This decline in advances on farm property, though severe, is Farroximate-
ly proportionate to the reduction in total investments of the companies as P
result of greatly reduced volume of funds available for investment purposes.
Figure 2 shows that while the volume of new farm loans was decreasing rapidly.
the percentage of total investments represented by this form of credit declined
only slightly and that in 1932 it stood at approximately the same level as in
1931.

Heavy demands in the form of policy loans and the irregular receipt, of
income caused by the business depression have been the chief facto-s in reducing
the amount of funds that the companies have had available for investment.

The volume of fa.'m mortgages bought follows a definitely seasonal course,
with heavy purchases in the spring and fall months, unless unusual interruptions
occur as in the fall of 1929.

The proportion of total investments represented by fCi ram .'r1.g"ges like-
wise varies with the season of the year, but has fluctuated about' 10 per cent
of the total. A more-than-seasonal decline occurred during 1931. bul this
ground appears to have been regained during the early months of 1932. (Fig. 2.)

Outstanding Loans since 1930

The course of outstanding farm mortgage loans by insurance ccirpanies
for the country as a whole is well indicated by the monthly holdiiigs of 40
leading companies since 1923.4/ During the first half of this S-year period
the holdings of the companies were rising rapidly. After reaching a peak
of $1,628,000,000 in the autumn of 1927, the volume of outs Landincr loai's de-
clined to $1,477,000,000 in May, 1932. Table 4 presents the hol'.ings of 'his
group of companies by years from 1923 to 1932 and by months from 193-0 .o 1932

4/ Association of Life Insuranre Presidents: Rearorts of 40 companies having 82 per cent of the sdmltr-i imsets of all
United States legal reserve companies.


I I 1
1929 1930 1 1931 1932

I I

3,092 2,827 2,011 2/ 1.268


10.2 10.0 7.6 10.6
S1i














-mI


IL
oi





f




Full Text
xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID ETM2ROWI1_CBK1HW INGEST_TIME 2014-04-25T08:05:25Z PACKAGE AA00017376_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES


xml version 1.0 encoding UTF-8
REPORT xmlns http:www.fcla.edudlsmddaitss xmlns:xsi http:www.w3.org2001XMLSchema-instance xsi:schemaLocation http:www.fcla.edudlsmddaitssdaitssReport.xsd
INGEST IEID EHLDLPV4I_OZ41ON INGEST_TIME 2014-04-22T00:14:10Z PACKAGE AA00017376_00001
AGREEMENT_INFO ACCOUNT UF PROJECT UFDC
FILES