VIA FACSIMILE AND U.S. MAIL


August
10, 2005

Lauri A. Wood
Chief Financial Officer
Peoples Financial Corporation
Lameause and Howard Avenues
Biloxi, Mississippi 39533

	RE:	Form 10-K for Fiscal Year Ended December 31, 2004
      Form 10-Q for Fiscal Quarter Ended March 31, 2005
      File No. 1-12103

Dear Ms. Wood:

		We have reviewed these filings and have the following
comments.  If you disagree with a comment, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information
so we may better understand your disclosure.  After reviewing this
information, we may or may not raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects.  We welcome
any
questions you may have about our comments or on any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 2004

Note L - Contingencies, page 25

1. We note that a lawsuit was filed against your bank subsidiary
in
2003. Both the specified and punitive damages appear substantial.
It
is unclear from your disclosures whether your final conclusions as
to
the materiality of all contingent matters applied to the described
lawsuit.  Regardless of this, please tell us more about this
lawsuit.
In particular:
* Describe the nature of the original claim and settlement in
2000;
* Describe the alleged basis for the insurance companies suit
against
you;
* Provide a more detailed update on this suit, including current
status, legal assumptions relied on and the uncertainties
involved;
* Tell us whether it is reasonably possible that you may incur a
loss
in this matter;
* Tell us whether you have accrued any potential settlement
amounts
related to this matter, and if so provide a roll-forward since
inception, through your response date;
* Tell us whether you have incurred legal costs and how much to
date;
* Tell us whether you have accrued any legal expenses to date and
if
so, provide a roll-forward of such accrual since inception,
through
your response date;
* Explain to us your accounting policy for legal expenses.

*    *    *    *

		Please respond to these comments within 10 business
days, or
tell us when you will provide us with a response.  Please provide
us
with a response letter that keys your responses to our comments
and
provides any requested information.  Detailed letters greatly
facilitate our review.  Please file your response on EDGAR as a
correspondence file.  Please understand that we may have
additional
comments after reviewing your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Exchange
Act of
1934 and that they have provided all information investors require
for
an informed investment decision.  Since the company and its
management
are in possession of all facts relating to a company`s disclosure,
they are responsible for the accuracy and adequacy of the
disclosures
they have made.

	In connection with responding to our comments, please
provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in their filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal
securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in our review of your filing or in response
to
our comments on your filing.



      If you have any questions regarding these comments, please
direct them to Ernest Greene, Staff Accountant, at (202) 551-3733
or,
in his absence, to the undersigned at (202) 551-3689.

						Sincerely,



							John Hartz
      						Senior Assistant Chief
Accountant

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Ms. Lauri A. Wood
August 10, 2005
Page 1



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010

         DIVISION OF
CORPORATION FINANCE