Editing Reconstruction Finance Corporation (section)

==Under President Franklin D. Roosevelt==
The [[Presidency of Franklin D. Roosevelt, first and second terms|Presidency of Franklin D. Roosevelt]] increased the RFC's funding, streamlined the bureaucracy, and used it to help restore business prosperity, especially in banking and railroads. Roosevelt appointed Texas banker [[Jesse H. Jones]] to lead the agency, and Jones turned the RFC into an empire with loans made in every state.<ref>Arthus Herman, ''Freedom's Forge: How American Business Produced Victory in World War II,'' pp. 73–4, 100, 210, 255, 258, Random House, New York, NY, 2012. {{ISBN|978-1-4000-6964-4}}.</ref>

Under the New Deal, the powers of the RFC were greatly expanded. The agency now purchased bank stock and extended loans for agriculture, housing, exports, businesses, governments, and disaster relief. Roosevelt soon directed the RFC to buy gold to change its market price. The original legislation did not call for identities of the banks receiving loans nor of any reports to Congress. This, however, was changed in July 1932 to make the RFC transparent. Bankers soon were hesitant to ask the RFC for a loan since depositers would become aware and begin to consider the possibility of their bank failing causing them to withdraw their deposits, a practice called [[bank run]]ning.

The RFC also had a division that gave the states loans for emergency relief needs. In a case study of [[Mississippi]], Vogt (1985) examined two areas of RFC funding: aid to banking, which helped many Mississippi banks survive the economic crisis, and work relief, which Roosevelt used to pump money into the state's relief program by extending loans to businesses and local government projects. Although charges of political influence and racial discrimination were levied against RFC activities, the agency made positive contributions and established a federal agency in local communities which provided a reservoir of experienced personnel to implement expanding New Deal programs.

Roosevelt saw this corporation as an advantage to the national government. The RFC could finance projects without Congress approving them and the loans would not be included in budget expenditures. Soon the RFC was able to buy bank preferred stock with the [[Emergency Banking Act]] of 1933. Buying stock would serve as collateral when banks needed loans. This, however, was somewhat controversial because if the RFC was a shareholder than it could interfere with salaries and bank management. The [[Federal Deposit Insurance Corporation]] (FDIC) was later created to help decrease bank failures and insure bank deposits. The second main assistance was to farmers and their crop lands. The [[Commodity Credit Corporation]] was established to provide assistance. The agriculture was hit hard with a drought and machinery like the tractor. One benefit it provided to these rural cities was the Electric Home and Farm Authority, which provided electricity and gas and assistance in buying appliances to use these services.

The mortgage company was affected as well since families were not able to make their payments. This led the RFC to create its own mortgage company to sell and insure mortgages. The [[Federal National Mortgage Association]] (also known as Fannie Mae) was established and funded by the RFC. It later became a private corporation. An [[Export–Import Bank of the United States|Export–Import Bank]] was also created to encourage trade with the [[Soviet Union]]. Another bank was established to fund trade with all other foreign nations a month later. They eventually merged and make loans available to exports. Roosevelt wanted to reduce the gold value of the US dollar. In order to accomplish this, the RFC purchased large amounts of gold until a price floor was set.