Following the quadrupling of yearly bank failures from 600 in 1929 to 2,293 in 1931, the National Credit Corporation was established by the
Hoover administration as an intermediary in the
interbank lending market to provide loans to banks on the brink of failure. Having convinced large surviving banks to loan money to failing banks as a solution to
bank runs, the corporation had access to a $500,000,000 banker's pool to finance loans to failing banks. The president of the Corporation was
Mortimer N. Buckner, the chairman of the
New York Trust Company and president of the
New York Clearing House. Loans were supposed to be ready in October 1931, which lead to an increase in the "tone of confidence." In November 1931, the
New York State Banking Department approved a merger between the
Bank of America Safe Deposit Company into the National City Safe Deposit Company under the latter's name with an authorization certificate from the Corporation for $2,000,000 capital. By December 1931, President Buckner stated that the Corporation was "functioning in every one of the twelve
Federal Reserve Districts" and had granted all loans asked by banks. Later that same month, the Corporation issued another call for payment of the third installment of 10 per cent, or approximately $50,000,000, on subscriptions to its gold notes payable at the Federal Reserve Bank in each district. At the same time as the third call, it was noted that after "the
Reconstruction Finance Corporation begins functioning, it is understood it will take over the activities of the National Credit Corporation. When the latter was formed, it was the consensus that it would be dissolved as soon as possible after legislation had been enacted to permit the Federal Government to render such services." By mid-April 1932, the Corporation announced a third repayment of part of the funds subscribed to it by banks throughout the country, leaving $79,775,000 of its notes outstanding. ==Analysis==