The Donaldsonville chief. [volume] (Donaldsonville, La.) 1871-current, 1914-06-27
BANK GUARANTY LAW COMING.
Public Sentiment in Louisiana in
Favor of Plan will Force Its En-
actTnent by General Assembly,
Says Mississippi Editor.

Says Mississippi Editor.
State Senator Joseph E. Norwood
editor of the Magnolia (Miss.) Ga
4 zette, and one of the staunchest sup
porters of the bank guaranty bill en-
acted at the last session of the Mis-
sissippi legislature, discusses editor
tally Bank Guaranty in Louisiana
in the issue Of his paper dated June
20, as follows:
Accepting the kind invitation OF
Representative Chas. E. SchWing o1
Iberville parish, the editor of the
| Gazette had the privilege last Tues
day evening of appearing before the
| house committee on ways and means
in advocacy Of the Schwing bill pro
viding for the guarantee of bank de.
posits.
Unfortunately for the people oi
Louisiana, this important and meri
torious legislation will not be enacted
by the current session of the general
| assembly, since the committee has
decided to- report the bill with a
negative recommendation.
While sentiment among Louisiana
legislators seemed strong in favor
of the general principal of insurance
of deposits, there was a very mani
fest disposition to postpone the mat
ter until the next session. With that
end in view, a bill has been intro
duced and, We understand, has passed
the senate, which provides for a
banking commission composed of
seven members whose duty it shall
be to study the subject Of bank CON
troll and regulation and guarantee
and report to the general assembly
OF 1916.
'The schwing bill is practically the
Mississippi statute relating to the
guaranty or insurance of bank de-
posits with the mandatory feature
of the Mississippi plan eliminated.
Under the SchWing bill, no Lou
1siana bank can be, forced to enter
the system. and only those banks
may do SO which, after thorough ex-
animation by the state bank exami-
ner, are found entirely solvent and
banking principles.
S'The Schwfng bill also omits what
is very important section of the
Mississippi law, viz: the double liza
bility of deDositors Without this
practical doubling of a banks capital
in the event of its failure, the whole
burden Of reimbursing the deposi-
tors Of defunct bank falls on the
realizable value of the banks assets
and the depositors guaranty fund
which may have accumulated in the
state treasury Thus, since the
schsVinas BIZ a. sssss1Vi Vidad for assessments
on banks which would produce only
about $4,000 per annum, the protec-
ton afforded would not be sufficient
These deficiencies, while easily
remedied. Were urged by the big
bankers of the state as fatal objec-
tions to the passage of the SchWing
bill, although it was obvious that
their real objection was to the en-
actment Of any Sort Of bill providing
for protection to depositors Bank
custodians of the peoples money, of
course, prefer to continue the very
profitable system now in vogue-that
OF using deposits for their own profit
and without mourning even the small
expense of providing fund which
would insure the return of these de-
posits under any circumstances.
The most stubborn and unremit-
ting opposition to the SchWing bill
came from the large banks in New
Orleans Although it was pointed
out that the system sought to be
legalized was purely optional with
them-that they did not have to go
into it if they die not desire to do
nevertheless fought the
schwing bill as relentlessly as if it
had provided, as do the laws Of
Texas, Nebraska, South Dakota, Ok
lahoma and Mississippi, that banks
MUST create fund for the protec
ton of their depositors.
1.-THE optional, or voluntary, guar
antee did not appear to relieve the
condition for them one whit, and their
can only be explained on
the ground that they feared the
smaller banks in the little towns of
Louisiana would go into the system,
and thus present more potent ap-
peal for deposits than the city banks.
This is the second time Repre-
sentative SchWing has introduced a
bill in the general assembly of Lou
isiana providing for the insurance of
bank deposits. and although again de-
feated, he is not discouraged. On
the contrary, he had discounted the
action of the committee in advance,
and has already begun to formulate
plans to continue the fight.
In our humble judgment, the bank
ers of Louisiana have gained only
temporary respite. With Mississippi
on one side and Texas on another
side both maintaining system of
bank insurance which makes the de-
positors' money absolutely safe, there
Is going to develop public sentiment
In Louisiana in favor of the plan
which will force it's enactment by the
general assembly Not only SO, but
the probabilities are that the next
time the proposition comes before the
Iawmaking body it will be in the
shape Of a bill forcing the banks to
guarantee their deposits.
ssThe writer's visit to Baton Rouge
was replete. with pleasure, and he
was the recipient of many courtesies
and kindnesses from the resident
officials and senators, rep
and citizens.
Representative SchWing was par
sicuIarIy resourcefuI in contributing