Ivory marked by the Royal African Company. International Slavery Museum, Liverpool. Wikimedia Commons.
The Reconstruction Finance Corporation, created in 1932, lent public money to banks, railroads, and other firms so they would not fail, and it did not mail checks to unemployed households.
A stretched household could read about a rescue and still have no wage, because the loan went to a balance sheet and not to the rent.
A household with deposits in a bank that got the loan might keep the account, which was real help and easy to miss because it arrived as a failure that did not happen.
A bank or a railroad that could pledge collateral could get the funds, and a small firm that did not look like a systemic risk generally could not.
Hoover’s design treated the collapse as a problem of institutions that needed capital, on the theory that saved banks and railroads would keep paying depositors and wages.
When the borrowers’ names were later published, the publicity could mark a bank as weak and worsen the run the loan was meant to stop.
The household was supposed to be saved indirectly, which is no save in the week the paycheck is missing.
Reconstruction Finance Corporation Act of 1932