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Originally posted by Grey Magic
this is absolutely disgusting since it is possibly very true.
has any other president let the govt bail out banks before?
I think this is one of the most corrupted govt actions ever, this is nothing but treason in my opinion.
The RFC began in the fall of 1931 as the National Credit Corporation, through which leading banks were persuaded, at a secret conference with Hoover and his aides, to extend credit to shaky banks, with Federal Reserve assistance. When the banks balked at this scheme, Hoover threatened legislation to compel their cooperation; in return for their agreement to the NCC, the Administration agreed that it would be strictly temporary, to be replaced soon by an RFC.
The RFC bill was passed hurriedly by Congress in January, 1932. The Treasury furnished it with half a billion dollars, and it was empowered to issue debentures up to $1.5 billion. Meyer was chosen to be chairman of the new organization. In the first half of 1932, the RFC extended, in the deepest secrecy, $1 billion of loans, largely to banks and railroads.(48) The railroads received nearly $50 million simply to repay debts to the large banks, notably J. P. Morgan & Co. and Kuhn, Loeb and Co. One of the important enthusiasts for this policy was Eugene Meyer, Jr., on the grounds of "promoting recovery" and frankly, of "putting more money into the banks." Meyer's enthusiasm might well have been bolstered by the fact that his brother-in-law, George Blumenthal, was an officer of J. P. Morgan & Co., and that he himself had served as an officer of the Morgan bank.
But Hoover wasn't satisfied with the massiveness of the RFC program. He insisted that RFC be able to lend more widely to industry and to agriculture, and that it be able to make capital loans. This amendment – the Emergency Relief and Construction Act – passed Congress in July, 1932; the Act nearly doubled total RFC capital from $2 billion to $3.8 billion, and greatly widened the scope of RFC lending.(49) During 1932, the RFC extended loans totalling $2.3 billion.
Herbert Hoover's enthusiasm for government aid to industry and banking was not matched in the area of Depression relief to the poor; here his instincts were much more voluntarist. Hoover steadfastly maintained his voluntary relief position until mid-1932. As early as 1930/31, he had been pressured on behalf of federal relief by Colonel Arthur Woods, the Chairman of Hoover's Emergency Committee for Employment, who had previously been a member of Rockefeller's General Education Board. But in mid-1932 a group of leading Chicago industrialists was instrumental in persuading Hoover to change his mind and establish a federal relief program. In addition to widening the powers of the RFC loans to industry, Hoover's Emergency Relief and Construction Act was the nation's first federal relief legislation. The RFC was authorized to lend $300 million to the states for poor relief.(50)
Throughout the Depression, Herbert Hoover gave vent to his long-standing dislike of speculation and the stock market. In the fall of 1930, Hoover threatened federal regulation of the New York Stock Exchange, hitherto thought to be constitutionally subject only to state regulation. Hoover forced the Exchange to agree "voluntarily" to withhold loans for purposes of short selling. Hoover returned to the attack during 1932, threatening federal action against short selling. He also induced the Senate to investigate "sinister . . . bear raids" on the Exchange. Hoover seemed to find it sinful and vaguely traitorous for the stock market to judge stock values on the basis of current (low) earnings. Hoover went on to propose what later came to pass as the New Deal's SEC, a regulation that Hoover openly applauded.
Originally posted by jam321
I find it Ironic that they wanted to pass this bill so fast to save the economy and are now saying it won't help the economy at this moment. The treasury has to analyze what they will do, in other words they have no plan what to do with the money.
They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.