While Congress continued to mumble & bumble over farm relief plans which cannot pass this session, big life insurance companies of the East last week held out helping hands to the debt-stricken West. From its headquarters at Newark, N. J. the largest single farm land creditor in the U. S., Prudential Insurance Co., announced it was suspending for an indefinite period foreclosures on its $209,000,000 worth of mortgages on 37,000 farms in the U. S. and Canada. Mutual Benefit Life Insurance Co. (Newark) followed suit by declaring it had ordered its Iowa agents to cease trying to collect $5,000,000 tied up in foreclosure suits in that State. President Frederick H. Ecker of Metropolitan Life (world's largest) revealed that for two years his organization had been foreclosing farm mortgages only "where the farmer is unwilling to carry on or try to do his part toward working out his problem." Other big life insurance companies which suspended foreclosures in Iowa: John Hancock, Aetna Life, Connecticut Mutual, Connecticut General, Phoenix Mutual.
Iowa, hot bed of revolt, is the most heavily farm-mortgaged State in the Union. The total debt on its land for 1930 was $1,098,000,000 or nearly one-third of its farm value. Every lowan carries an average farm mortgage of $445 compared with a per capita burden of the same sort of only $75 for the rest of the country.
Because Clyde Herring, Iowa's new Democratic Governor, last month appealed by proclamation for mortgagees to suspend foreclosures until the General Assembly could act, New York Life led off fortnight ago with this voluntary farm relief. Of the $1,666,000,000 which 52 life insurance companies have invested in U. S. farm mortgages, $455,834,078 was sunk into the black soil of Iowa. Iowa farm mortgage holdings of the principal life insurance companies: Equitable of New York, $90,040,095; Metropolitan, $64,422,538; Equitable of Iowa, $50,098,679; Northwestern Mutual, $40,809,401; Bankers of Iowa, $35,130,952; Mutual Benefit, $34,859,529; John Hancock, $33,251,749; Prudential, $26,059,391; Aetna, $14,055,527.
Life insurance companies were rescuing the Iowa farmer from beneath his debt pile not because of charity or sentiment but because of hard economic necessity. All the companies asked was that the farmer stick by his land and pay something for the sake of appearances. Their concessions to him were widely regarded as the first major break on the front of private debts—a crumbling of moral obligations-to-pay which creditors have been stoutly maintaining through three hard years. Where the insurance companies led other big financial concerns were expected to follow. With most of them it was a case of declaring a moratorium or having millions upon millions of their assets permanently swept away either by legislative action or by the extra-legal technique developed by desperate farmers to circumvent their debts.