That month, the president advanced a wide-ranging economic program that included a federal capital injection into the Federal Land Banks and the creation of a Reconstruction Finance Corporation (RFC), modeled after the War Finance Corporation, which would provide direct loans to agricultural credit agencies, financial intermediaries, and railroads.
Hoover described his hopes for the new GSE in his official signing statement: "[The RFC Act] brings into being a powerful organization with adequate resources, able to strengthen weaknesses that may develop in our credit, banking, and railway structure, in order to permit business and industry to carry on normal activities free from the fear of unexpected shocks and retarding influences." (131) In its final form, the act gave the RFC the authority to lend to a broad set of financial intermediaries, including government-sponsored enterprises like the Federal Land Banks and Federal Intermediate Credit Banks, as well as to railroads, on a wide range of collateral.
In opposition to the liberal rule applied in Godwin, the intervening lender argued that the matter was factually identical to Boley (which it was) and that the same rule applied therein should bar Federal Land Bank from recovering (which, had it been strictly applied, it should have).
In those cases, the court confirmed that it had altered its definition of volunteerism, so that lenders situated in the position of Daniel and Federal Land Bank were no longer encompassed by the disqualifying definition.
Although that was not the first protest the Federal Land Bank
had faced over a foreclosure, the Plattsburg rally may have been the largest and most determined one.
APPENDIX Variable Definitions and Data Source Information Variable name Definition Moratorium Dummy variable equal to 1 for states with mortgage moratorium in 1933-34 Farm foreclosure rate Farm foreclosures per 1,000 mortgages in 1932 Mortgaged farms Percentage of farms mortgaged (percent) in 1930, calculated as (mortgaged farms/all owned farms) Federally held Percent of mortgage debt held farm debt by federal land banks
, calculated as (sum of amount of loans closed 1917 to 1932/ total farm mortgage debt in 1932) Owner-occupied nonfarm Percentage of owned nonfarm homes (percent) homes in 1930, calculated as (sum of owned nonfarm homes/total nonfarm homes) Farm population Percentage of population on farms in 1930 Variable name Source Moratorium Skilton, Robert H.
The act established 12 federal land banks
to enhance liquidity in the market for agricultural mortgages through advances from the banks to local farm credit associations.