The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1914-05-23
LETTERS FROM THE PEOPLE.
The Chief is not responsible for the
'1eWs expressed by correspondents.
The Bank Guaranty Law.

The Bank Guaranty Law.
Colomb, La, May Is, 1914.
Editor Chief:
It is probable the Peoples Bank
of Donaldsonville was the first bank
IN this country to put itself on rec
ord as being in favor of a bank guar.
anty law. On Dec. 10, 1913, in
troduced the resolution, which was
adopted by the board of directors
without dissent. While the interests
of banks and those OF their deposi-
tors have usually been considered as
opposed, We have taken the position
that they are mutually dependent,
and that clients are as necessary to
a bank as the bank is tc them.
1t is fact, which does not admit
of question, that there has been a
gradual loss OF confidence on the
part OF people generally in the sta
b1llty of all banks, and that they will
now require guaranty against the
loss OF their money as prerequisite
to the placing of it in any bank
tIhe recent report of the bank ex-
aminer shows a shrinkage in the
banking resources Of this state of
over S2,000,000). The gradual spread
of the guaranty law is the best in
dication of this growing sentiment.
Louisiana is now sandwiched in be-
tween two other states that have
been compelled to bow in submission
to public sentiment on this question.
HOW we are going to keep our money
from going out of the state, and
hold it in our home banks for the
financing of local industries, under
such conditions, is a nut for the
metropolitan banks to crack.
The lineup on the Schwing bill
In the legislature will be the same
as it was in Mississippi and in every
other state-the deposftors versus
the banks, and particularly the large
banks with their affiliated country
attachments. The reason of this is
very evident, as a guaranty law will
make every small country institution,
SO far as the depositors are con-
cerned, as secure as the large banks
are SUPPOSED TO BE. This being
SO, great deal of local money will
be attracted to the rural banks that
now goes to the larger ones, and
much also that never sees the inside
of any bank
This increase of funds in the rural
banks will enable the agricultural
districts to finance their own bust /
ness, as they do elsewhere, which
will be of material benefit to all
concerned, the only sufferers being
the commission merchants and the
metropolitan banks, that now control
the business because they control
the money. II the people of this
state are ever to be relieved from
the financial domination Of Wall
street, it must come either through
the new financial system of the pres
ent administration at Washington, or
by Strengthening their local banking
institute ons, SO as to be able to fl
nance their business at home
Mr.. SchWing, it seems, has left it |
optional with any bank to come into
or to remain outside of the guar
anty plan. This is manifestly fair,
and is just what the national govern
ment has done in regard to it's re-
gional bank system. The national |
banks We're granted the full option |
to remain out of the com bination, and |
they at first declared against join |
ing; but they all finally did SO, just |
the same. If the metropolitan banks |
and their subsidiaries think they will |
be injured by Mr.. Schwing's guaranty |
law, they are given the privilege of |
as they are. Surely if |
they are satisfied with existing con-
ditions no one could possibly object |
should they elect to go on without I
any. change. They should not be
allowed, however, to interfere with +
any action that may be contemplat-
ed by the rank and file, commonly
known as deppositors, and the small
banks, should they find it advisable
to unite upon scheme for mutual
protection and decide to do SO.
In so far as the Peoples Bank of
is concerned, and.
believe the sentiment is unanimous
among the directors, We desire first
If all to safeguard the interests of
)ur depositors, and secondly, we
would expect to increase their num-
,er and the amount of deposits far
more than sufficient to pay the
mall assessment demanded by Mr..
guaranty law.