President Hoover signs the Reconstruction Finance Corporation (RFC) Act ,on January 22, 1932, establishing the Independent government Agency, to aid the struggling U.S. economy during the Great Depression.
It went on to become a vital government agency as the lender of last resort providing emergency financing to banks, railroads, and industries fostering stability during the Great Depression.
Starting in 1933, under Franklin D. Roosevelt the RFC's mandate expanded significantly. It began purchasing preferred stock in banks to boost their capital, helped finance New Deal public works, and supported mortgage relief (including the creation of Fannie Mae). During the World War II Era, the RFC became a massive driver of war production, financing the construction of synthetic rubber plants, defense factories, and funding military-industrial efforts. as private capital returned, the agency was deemed unnecessary and its lending powers were transferred to the Small Business Administration in 1953, and it was officially dissolved in 1957.
