FARM-MOETGAGE LOANS IIST THE UNITED STATES. 11 



total capital from all banks in the State. Likewise in California the 

 savings banks furnish even a larger proportion of the total capital in- 

 vested in farm mortgages by all banks. On the other hand, in Minne- 

 sota, where there are few savings banks, the farm-mortgage loans held 

 by State and private banks and trust companies constitute about 95 

 per cent of the total amount of such loans held by all banks in that 

 State. 



LIFE INSURANCE COMPANIES. 



The importance of life insurance companies as sources of capital 

 for farm-mortgage loans in the various States is also shown in Table 

 5 and in Diagram D. It is seen that these insurance companies 

 supply approximately $700,000,000 for farm-mortgage loans, or 

 about one-fifth of the total farm-mortgage capital of the United 

 States. Practically one-half of the insurance money is invested in 

 the four States of Iowa, Missouri, Kansas, and Nebraska. Iowa 

 alone holds nearly 22 per cent of the total amount of insurance money 

 invested in farm mortgages. In few of the Southern or Rocky 

 Mountain States do the insurance funds invested in farm mortgages 

 represent more than one-half of 1 per cent of the total farm-mortgage 

 capital obtained from this source. 



The life insurance companies either have then* own farm-mortgage 

 departments, through which they receive and pass on applications 

 for loans, or they purchase farm mortgages outright in the commer- 

 cial market. The latter practice generally is limited to the smaller 

 insm'ance companies, the voliune of whose business in this field is 

 not sufficient to warrant their estabhshing separate machinery for 

 the selection of farm-mortgage securities. 



On the other hand, the larger insurance companies, which invest 

 considerable amounts in farm mortgages, have very well-organized 

 departments, through which they carry on a regular farm-mortgage 

 loan business. They usually limit their loans to territory such as 

 they can approve for this purpose, and hire salaried appraisers, whose 

 inspection of any given individual loan is required before the loan is 

 finally accepted. Ordinarily these companies receive applications 

 through local agencies or correspondents, usually local banks. The 

 application blanks and legal papers used by these insurance compa- 

 nies, including mortgages and notes, have been carefully standard- 

 ized and adapted to the conditions in the various States where loans 

 are made. While some of the companies show a tendency to make 

 loans at relatively high rates, insurance companies more often repre- 

 sent a highly conservative class of investors in the farm-mortgage 

 business. Their advent into any given State for investment pur- 

 poses usually leads to a lowering of charges on farm mortgages. 

 Local investors often are governed in theu^ charges by the practices 

 of competing insurance companies. 



