Reconstruction Finance Corporation

What did railroads, life insurance companies, and banks have in common?

All were reeling from Great Depression effects that was now over two years in duration.

What did Hoover hope the RFC would accomplish?

Emergency loans from the RFC would help stabilize key industries and their gains would tickle down to small businesses, and that would bring about an economic recovery.

Was the RFC a success or failure?

Failure: did not end the Depression; publishing names of banks that got loans caused further runs on the banks; no aid for those at bottom of the ladder.

What was Herbert Hoover's initial response to the Depression in 1929?

He signed the Smoot Hawley Tariff Act that raised import taxes. It froze international trade; raised income taxes; called on business leaders urging them not to lay off workers.

Why didn't Hoover support direct aid to industries, businesses, and individuals?

Hoover feared direct aid would destroy the idea of self-help ("rugged individualism") and create a class of people who looked to the government for help.

What was the Reconstruction Finance Corporation of 1932?

Hoover's attempt to deal with the Depression by propping up banks, life insurance companies, and railroads.

What criticism was raised by the Democrats in Congress about the RFC?

The RFC would only help rich business owners, not those at the bottom of the ladder who were suffering the most.