or the beneficiaries will receive $1,000 in the event of death of insured prior to the end of the term. The twenty-year term policy will pay the beneficiaries $1,000, in the event of death of insured during the twenty-year term, and at the end of that term, if the insured is still living, the value of the policy is nil. It is protective only, and protects only for the term limit for which it is written.

Now if a prospect wishes to select the most profitable plan for investment, and at the same time have life insurance protection, he finds that if he pays into a building association, which pays 5% dividends, the amount of the semi-annual premium on a twenty-year endowment policy, that is $26.22, then have the association apply $12.64 of these payments each year to paying the premium on a twenty-year term policy in the same life insurance company, he will have the same protection in the same life company, as he would have under the endowment policy, with the result that at the end of twenty years, instead of the $1,000 which he would receive from his endowment policy, he would have to his credit in the puilding association, more than $1,425.00.

In case of the death of the insured prior to the end of the twenty years, under the endowment policy his beneficiaries would have received but $1,000. In like event, had he combined term insurance, with a building association savings account, his beneficiaries would have received the same amount of insurance, and they would also have received all the accumulated savings in the association.

These are some of the facts which have led the managers of many financial institutions to seek to find some practical plan by which savings and life insurance might be combined in such a way as to afford the savers protection, and at the same time enable them to have a higher return on their investments than can be obtained from investment life insurance.

In the various plans of working out this combination there are three forms of policies that are being tried out:

1st. The Diminishing Term Policy, which is continually being reduced in value, as the savings increase with repeated payments, but which would always be sufficient, if the insured kept up his regular payments on his account in the building association, to amount, when added to his savings, to the ultimate sum aimed at in the beginning.

2nd. The issuing of a regular term policy, which would continue of a level amount equal to the ultimate amount of the savings aimed at.

3d. The issuing of an ordinary whole life policy for the ultimate sum aimed at.

The first plan is the cheapest for the insured, but is not looked on with favor by very many insurance companies, since the premium is so small that the relative overhead expense of the insurance company becomes disproportionate.

The other two plans finds more favor with the insurance

companies, since each person insured is at once marked down' as a good prospect, to whom a more profitable type of policy can be sold later on.

Some curious and unexpected developments have arisen recently out of these experiments. As might be expected, the commission of the soliciting agents on the term policies is very trifling, compared to what they receive when writing the Investment Policies such as endowment and whole life. As a result, the Underwriters' Associations in a number of cases have protested very emphatically against their companies embarking on this line of insurance writing. Since the very existence of the insurance companies rests on the activity of their underwriters, it is not surprising to learn that some of the larger insurance companies are declining to make further extensions of their experiments along this line, and it is expected that some of them that embarked in this combination some few months ago, will shortly retire from that field of activity.

One prominent life insurance executive recently defined the position of his company as being against the whole proposition. As he expressed it:

"The entire plan is based on the idea that the life insurance company shall assume the death liability, while the financial institution handles the investment portion of the premium. Our company proposes to handle it all."

This expresses the line of cleavage between the interests of the two types of institutions. While many of the strongest of the life insurance companies take that view of the subject, there are a number of live, active life insurance companies, chiefly in the West, which are actively in the field fighting for that very line of business, and ready and willing to write about any type of policy which the building association may prefer; either Diminishing Term, Straight Term, or Whole Life Policies. It is quite significant, however, that several of these companies have qnite materially boosted their premium rates on their term policies above the rates charged by other companies on their regular term policies.

The whole plan of insured savings is now in merely the formative stage of evolution. It has great possibilities wrapped up in the idea, but they have not as yet sufficiently developed to any plan or method that is entirely satisfactory. The facts seem to be that the interests of the financial institutions and the life insurance companies are so antagonistic that it will be a long task, if not an impossible one, to develop a plan which will be satisfactory to both factors to the problem, and at the tame time give adequate service at a reasonable price to the saving public.

In this connection it is quite significant to note that one certain financial institution, which operates a chain of branches throughout the country, has organized its own life insurance

company with the chief purpose of supplying this type of insurance to its saving patrons. It is quite possible that this example points the way to the most practical and satisfactory solution for the building associations to adopt in their efforts to find an insurance company to carry the insured savings risks of their members; that is, let the building associations organize their own company to write these policies.

Call for Colorado League Meeting.

Chas. F. Quaintance, Secretary-Treasurer of the Colorado State League of Building and Loan Associations, has issued the following call for the annual meeting:

The annual meeting of the Colorado State League of Building and Loan Associations will be held in Denver, Friday, January 20, 1922, starting at 10:30 in the morning, with luncheon at 12:30, and afternoon session, and you are urged to have a representative from your association present.

During this year a great number of building and loan associations from other states have applied for charters here, and a number of associations have been organized in Colorado under what is known as the "3% loan plan." Two of these associations were granted charters and several of the others have been doing business, anticipating that they will secure a charter. After investigating the plans of these different associations and comparing same with the Colorado statutes covering building and loan associations, your secretary complained to the State Building and Loan Department that these associations did not comply with the Colorado statutes, and he was given the assurance by Mr. Harry E. Mulnix, inspector for Colorado, that the certificate of authority issued one association would not be renewed and that the others would not be granted charters. We are indebted to Mr. Mulnix for the publicity he gave when he refused to permit these associations to operate, and at this meeting of the State League these matters will be taken up and such resolutions passed and campaign outlined in order to give the State Building and Loan Bureau a more stringent control over associations doing business in this state.

Every association should be represented at this meeting, and it is only fair that the associations pay the expenses of their representatives.

To associations who do not belong to the State League we would urge you to join before the time of this meeting by sending us a check for $5.00, which will entitle you to one year's subscription to the AMERICAN BUILDING ASSOCIATION NEWS.

Percentage of Home Ownership in 1920.

The Census Bureau has completed a tabulation of the houses owned in all cities having a population of 100,000 and over, as returned in the last census, and by reducing them to a percentage basis finds the range to be all the way from 12.7 per cent. in New York City to 51.1 per cent. in Des Moines, Iowa. Those two points also approximately indicate the geographical distribution, for with a few notable exceptions the lowest percentages are all reported from the eastern states, while the peak is reached in the Middle West. It will also be noticed that most of the cities where building associations have flourished for any length of time are found toward the bottom of the list, with high percentages. The table on the opposite page offers an interesting study.

Building Association Borrowing.

In a communication to the Philadelphia Public Ledger George W. Cliffe, secretary of the Reliance Building and Loan Association, of Germantown, makes the following explanation of building association borrowing:

For more than twenty-eight years I have been secretary of the Reliance Building and Loan Association of Germantown, one of the oldest and largest associations in Philadelphia, having assets of more than $1,250,000. We never refuse a loan to a stockholder who is worthy and needs the money for a home; and many years ago we abolished voluntarily the bonus or premiums on loans; but to carry out our plan it is necessary at times to borrow largely from individuals, banks or trust companies, our last report showing more than $100,000 as borrowed money, and we occasionally are indebted for much larger sums.

The purpose of borrowing is not to make money for the association, for during the money stringency we paid slightly less than 6 per cent for our loans; but we helped the man who was forced to buy and only had a small sum of ready cash. We earned his gratitude and were of service to the community, and in this way our Board of Directors was amply repaid for its efforts.

If building associations did not borrow in times like these, their loans would be limited to current receipts, and the borrower would, in many cases, be forced to pay an exorbitant rate for his loan. It is not the mission of building associations to make large profits for its investing shareholders, but rather to pay them a fair dividend rate and make it possible for the borrower to secure his home on the most favorable terms.

To summarize, the original single-series association, of course, was good. The serial association of today is better, and perhaps the perpetual plan of the Middle West States will solve some of our problems; but, meanwhile, let us borrow, of course, when it is necessary and repay these loans when the demand slackens, and thereby make it impossible for the borrower, who is the life of the association, ever again to be compelled to pay the premium of fifty years ago.

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