18. Hoover took more forceful action in the run-up to the 1932 elections
In early 1932 the first hopeful signs the depression was easing appeared. They were short-lived, as another series of shocks to the banking industry, triggered in large part by bank failures in Europe, again induced national panic. In January Hoover created the Reconstruction Finance Corporation (RFC), a federally owned entity intended to lend money to corporations in danger of default. During the first six months, the RFC lent money primarily to railroads and agricultural businesses. In July, Hoover expanded the RFC to allow loans to states and communities for public works projects.
The RFC loans stabilized some industries and state governments with injections of cash, but it failed to accomplish its most important goal, reducing unemployment. Jobs remained scarce, cash among consumers remained scarce, and consumer spending continued to drop. The blame fell most squarely on the shoulders of the President. Hoover ran for re-election touting his record in supporting businesses, especially big businesses, and promising jobs and prosperity would quickly return. His opponents in his own party cited his wasteful federal spending and protective tariffs as causes for the increasing severity of the depression.