The Columbus Commercial

FEDERAL FUNDS WITHDRAWN

The action of Secretary McAdoo in ordering the withdrawal from the federal reserve banks in Atlanta, Richmond and Dallas of the $5,000,000 placed in each of these banks last September to assist farmers in moving and marketing their crops has occasioned wide-spread surprise, and is being freely commented upon by the Southern press.

The withdrawal of the money comes at a most inopportune time, as the South, or at least a large portion of it, has recently been visited by the most severe storm witnessed here since 1909, and the need for funds is most urgent. The wind and rain which marked the course of the storm not only transformed fertile fields into sloughs of slush but uprooted cotton and corn plants in countless numbers, and many farmers will be compelled to borrow money from banks in order to be able to repair the damage. Had the federal funds been available this money could have been borrowed without difficulty, but their withdrawal serves to make the situation a difficult one, as Southern banks already have made large loans to farmers, and it is doubtful if they can make additional loans out of their individual resources.

The action of Secretary McAdoo should not, however, be too severely criticized until all the facts in the case are known. It is probable that the order of withdrawal was decided upon, if not actually given, before the recent storm made its appearance, and the fact that the money had reposed in the bank vaults for nearly a year without having brought forth any requests for loans doubtless led the Secretary to believe that the farmers of the South were in such good shape that they would not be forced to call upon the government for financial assistance. This may have been true at one time; but the recent storm has completely changed the phase of the situation, and we believe that as soon as Secretary McAdoo is convinced that Southern farmers need money he will make the federal funds re-available.

The Wilson administration has been exceedingly liberal towards the South, and one of the objects in creating the federal reserve system was to help farmers not only in Dixie but in all parts of the country by furnishing them money to carry on their activities in time of need. Such a time is now at hand, and we firmly believe that the government will come to the assistance of our yeomanry.