What Is the Reconstruction Finance Corporation?


Quick Answer

The Reconstruction Finance Corporation was an independent agency formed by the U.S. government in 1932 to provide emergency loans to banks. The RFC initially targeted banks that were in danger of collapsing as a result of the limited money supply in the aftermath of the stock market crash of 1929.

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Full Answer

The RFC remained operational until 1957 and had expanded its mandate to include providing aid to railroads and funds for World War II. Partisan politics and bureaucracy slowed the efforts of the RFC, and much of the initial money allocated to the agency was not disbursed, but it was nonetheless able to slow the decline in the money supply.

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