It was estimated that the increase in government spending and the enormous defense contracts necessary in time of war would require more credit than private capital could provide. On June 25, 1940, Congress passed legislation allowing the RFC to negotiate its own flexible interest rates, collateral security, and payment considerations. In June 1940 he formed a Rubber Reserve Company to stockpile rubber and end dependency on Japanese controlled supplies in Southeast Asia. He also established a Metals Reserve Company and the Defense Plant Corporation to finance new plant construction for war industries. In August the Defense Supplies Corporation was set up to acquire critical industrial materials. In October 1940 Jones established the Defense Homes Corporation to loan money for the construction of new homes for workers in defense plants.
Hoover established over one hundred tent cities and a fleet of more than six hundred vessels, and raised $17 million (equivalent to $253.27 million in 2020). In large part due to his leadership during the flood crisis, by 1928, Hoover had begun to overshadow President Coolidge himself. Though Hoover received wide acclaim for his role in the crisis, he ordered the suppression of reports of mistreatment of African Americans in refugee camps. He did so with the cooperation of African-American leader Robert Russa Moton, who was promised unprecedented influence once Hoover became president. World War I came to an end in November 1918, but Europe continued to face a critical food situation; Hoover estimated that as many as 400 million people faced the possibility of starvation. The United States Food Administration became the American Relief Administration , and Hoover was charged with providing food to Central and Eastern Europe.
Instead, Hoover strongly believed that local governments and private giving should address the needs of individuals. Yet, fundamentally Hoover believed that the federal government’s proper role was to coordinate voluntary action. As a result, the scope and effectiveness of his anti-depression policies were limited. Hoover, it seems, had a very different view of the American system, emphasizing voluntary organizations and state and local government, than the federal behemoth that later emerged. The question that later perplexed many students of the modern United States political and economic system was whether this development was inevitable. Undoubtedly Hoover contributed to government policies for dealing with economic downturns but his program seemed modest in comparison to the New Deal.
As Hoover was advancing in age, he worked excessively hard to become involved in the political world. As an American politician, Hoover contributed to the negative impact in the background of America. Herbert Hoover was primarily recognized for serving one term during 1929 until 1933 of the thirty-first president for the jeenyus snowboarding United States. This president is considered significant in American history, as citizens of the U.S concluded that Hoover triggered the commencement of The Great Depression. During its first two years alone, the FCA refinanced one-fifth of all farm mortgages and saved tens of thousands of farmers from foreclosure.
For almost every New Deal program, there was some RFC funding behind it. The RFC had completely failed to bring about economic recovery in 1932 but the new administration would attempt to breathe new life into the moribund agency. At first Roosevelt wanted a fresh start on the board membership but decided to appoint Jesse Jones, the dominant Democrat on the existing board, to be chairman. Unlike Hoover and Meyer, Jones did not envision the RFC as only a temporary agency.
In addition the growth of large chain stores and mail order houses like Sears Roebuck closed many smaller businesses that had been the clientele of rural banks. Between 1921 and 1929 one quarter of all rural and small town banks failed. With the boom in the stock market, banks tended to put their assets into securities instead of government bonds. There were simply higher returns on stocks, corporate bonds, and mortgages.
He was also reluctant to underwrite completely the bank debts that railroads had accumulated with Wall Street banks and often sided with his Democratic colleagues on the board. In fact he tended to remain politically independent and often mediated between factions in the RFC. Nevertheless when the Central Republic Bank of Chicago looked as if it were on the brink of collapse, Dawes devised a plan to save it though it involved underwriting much of the bank’s debts. The “Dawes Loan,” as it came to be called, generated a great deal of controversy. The Hoover administration was seen as only assisting large financial institutions, while Dawes felt that if Central Republic collapsed, it would cause a chain reaction.