Article Text
Official Declares Banking Situation Is Satisfactory
By J. S. Brock
(State Bank Commissioner)
NEW ORLEANS, April 8.—(AP)—The banking situation in Louisiana may be regarded with considerable satisfaction in view of general conditions that have prevailed for sometime, and as compared with the banking situation throughout the country as a whole. During 1931 there were only five small banks to close in Louisiana and go into forced or judicial liquidation.
Since the beginning of 1932 several other comparatively small banks have suspended, but for the most part their suspension was only temporary; practically one hundred per cent having resumed business, by reorganization, merger or refinancing.
Changes among state banks of Louisiana since January 1, 1932, are as follows:
Planters Bank, Cheneyville, La., with deposits of approximately $90,000 suspended January 9, 1932. Reopened January 11, 1932, as branch of the Commercial Bank & Trust company of Alexandria, La.
Parish Bank & Trust company of Opelousas, La., with total deposits of approximately $390,000, suspended January 23, 1932. Reorganized and reopened March 1st as Parish Trust & Savings Bank.
Following the close of the Parish Bank & Trust company of Opelousas on Saturday, January 23, a "run" of considerable proportions developed and continued throughout the day on the Planters Trust & Savings Bank, with total deposits of $850,000. The bank met all demand uninterruptedly during the day but it was deemed advisable, for the proper protection of all depositors that a reorganization be effected. This was accordingly completed over the week-end, and after only a few hours of suspension of business on the Monday following, viz., January 25, 1932, the bank reopened as the Planters Trust & Savings Bank of Opelousas.
Breaux Bridge Bank & Trust company of Breaux Bridge, La., with total deposits of approximately $264,000, suspended January 29, 1932, reorganized and reopened March 16th, under the name of Farmers & Merchants Bank.
Bank of Abbeville, Abbeville, La., with total deposits of approximately $688,000 suspended February 2, 1932, reorganized and reopened March 16th as Bank of Abbeville & Trust company.
Bank of Maurice of Maurice, La., with total deposits of approximately $51,000, suspended February 3, 1932, reopened March 16th as a branch of Bank of Abbeville & Trust company.
Bank of Loreauville of Loreauville, La., with total deposits of $70,000, suspended February 8, 1932, is now in process of reorganization and is expected to reopen within a few days.
The Citizens Bank of Franklinton, La., with total deposits of approximately $72,000, closed February 15, 1932, has been placed in liquidation, and is the only bank this year to be forced to go in judicial liquidation. In this case, however, arrangements were perfected whereby the depositors are to receive 50 per centum of their funds without delay, with a fair prospect of eventually receiving considerably more.
In addition to the above, one other bank which suspended in December, 1931, has been reopened by merger with another bank in the same town. Also one of the banks that closed in November, 1931, and which has since been in process of liquidation, has practically completed its plans for reorganization and reopening, its reopening being contingent only upon its obtaining a loan from the reconstruction finance corporation.
It has been reported that there were some thirty-six hundred bank failures in the United States during the past two years. Of this number only eight were in Louisiana.
In the several reorganizations and reopenings of banks mentioned, it was found necessary in order to better conserve the interests of all concerned to provide that depositors' funds be made available only on a time payment basis. Eight banks and three branches have been reopened by using this plan, and more than 100,000 certificates of deposit have been issued. In this manner some twenty thousand depositors having approximately $4,500,000 on deposit have been protected for the full one hundred per centum of their deposits.
Records of forced or judicial liquidations of banks will show an average loss to depositors of from 40 to 50 per centum. Therefore, through the method of reorganization used in the case of the eight banks listed above, there has resulted a saving of nearly two million dollars to depositors.
The reconstruction finance corporation has contributed material aid to many banks throughout this section. Louisiana and Mississippi bankers are fortunate in having a local office of this corporation located in this city to facilitate negotiations for loans; also, that the advisory board and staff of officials of this office is composed of outstanding bankers and