The R.F.C. Under Hoover and Roosevelt

Report Outline
The Reconstruction Finance Corporation, 1932–1935
Origin and Initial Functions of R. F. C. Under Hoover
Changing Character of R. F. C. as a New Deal Agency
Reconstruction Finance Corporation in the Future
Special Focus

The Reconstruction Finance Corporation, 1932–1935

Created by an act of Congress approved by President Hoover on January 22, 1932, the Reconstruction Finance Corporation was conceived as an organization which not only would provide an additional credit resource to banks, other financial institutions, and railroads—and indirectly through them to business, industry, and agriculture—but would by its mere existence foster the return of confidence necessary to set in motion the natural forces of recovery. By providing assistance to weakened financial structures, it was hoped to check the course of deflation then still in. progress and to lay a solid basis for a forward movement along the whole economic front. President Hoover said upon signing the act:

It brings into being a powerful organization with adequate resources, able to strengthen weaknesses that may develop in our credit, banking, and railway structure, in order to permit business and industry to carry on normal activities free from the fear of unexpected shocks and retarding influences.

Its purpose is to stop deflation in agriculture and industry and thus to increase employment by the restoration of men to their normal jobs. … It should give opportunity to mobilize the gigantic strength of our country for recovery.