World War II

The RFC's powers, which had grown even before World War II began, further expanded during the war. President Roosevelt merged the RFC and the Federal Deposit Insurance Corporation (FDIC), which was one of the landmarks of the New Deal. Oscar Cox, a primary author of the Lend-Lease Act and general counsel of the Foreign Economic Administration, joined as well. Lauchlin Currie, formerly of the Federal Reserve Board staff, was the deputy administrator to Leo Crowley.

The RFC established eight new corporations and purchased an existing corporation. Its eight wartime subsidiaries were the Metals Reserve Company, Rubber Reserve Company, Defense Plant Corporation, Defense Supplies Corporation, War Damage Corporation, US Commercial Company, Rubber Development Corporation, and Petroleum Reserve Corporation. These corporations helped fund the development of synthetic rubber, the construction and operation of a tin smelter, and the establishment of abaca (Manila hemp) plantations in Central America. Both natural rubber and abaca (used to produce rope products) had been produced primarily in South Asia, which came under Japanese control during the war. The RFC's programs encouraged the development of alternative sources of these materials. Synthetic rubber, which was not produced in the United States prior to the war, quickly became the primary source of rubber in the postwar years.

The War Insurance Corporation was established December 13, 1941 by Act of June 10, 1941 (55 Stat. 249), was renamed the War Damage Corporation by Act of March 27, 1942 (56 Stat. 175), and its charter filed March 31, 1942. It had been created by the Federal Loan Administrator with the approval of the President of the United States pursuant to §5(d) of the Reconstruction Finance Corporation Act or 1932, 15 USCA §606(b) for the purpose of providing insurance covering damage to property of American nationals not otherwise available from private insurers arising from "enemy attack including by the military, naval of air forces of the United States in resisting enemy attack". Prior to July 1, 1942, the War Damage Corporation provided for such insurance without compensation, but by express Congressional enactment Congress added §5(g) to the Reconstruction Finance Corporation Act, 15 USCA §606(b)(2) requiring that on and after July 1, 1942, the War Damage Corporation should issue insurance policies upon the payment of annual premiums. Under the terms of War Damage Corporation's charter an authorized capital stock of US$100,000,000 was provided, all of which was subscribed for by the Reconstruction Finance Corporation.

The Corporation was transferred from the Federal Loan Agency to the Department of Commerce by Executive Order #9071 of February 24, 1942, returned to the Federal Loan Agency by Act of February 24, 1945 (59 Stat. 5), and abolished by Act of June 30, 1947 (61 Stat. 202) with its functions assumed by Reconstruction Finance Corporation. The powers of War Damage Corporation, except for purposes of liquidation, terminated as of January 22, 1947.

From 1941 through 1945, the RFC authorized over US$2 billion of loans and investments each year, with a peak of over US$6 billion authorized in 1943. The magnitude of RFC lending had increased substantially during the war.

The Petroleum Reserves Corporation was transferred to the Office of Economic Warfare, which was consolidated into the Foreign Economic Administration, which was transferred to the Reconstruction Finance Corporation and changed to the War Assets Corporation. The War Assets Corporation was dissolved after March 25, 1946. Most lending to wartime subsidiaries ended in 1945, and all such lending ended in 1948.

World War II aircraft disposaledit

After the war, the Reconstruction Finance Corporation established five large storage, sales, and scrapping centers for Army Air Forces aircraft. These were located at Kirtland Air Force Base in Albuquerque, New Mexico; Altus Air Force Base in Oklahoma; Kingman Air Force Base in Arizona; Ontario Air Force Base in California; and Walnut Ridge Air Force Base in Arkansas. A sixth facility for storing, selling, and scrapping Navy and Marine aircraft was located in Clinton, Oklahoma.

Estimates of the number of excess surplus airplanes ran as high as 150,000. By the summer of 1945, at least 30 sales-storage depots and 23 sales centers were in operation. In November 1945, it was estimated that a total of 117,210 aircraft would be transferred as surplus.

Between 1945 and June 1947, the RFC, the War Assets Corporation, and the War Assets Administration (the disposal function of the RFC was transferred to WAC on January 15, 1946, and to the WAA in March 1946) processed approximately 61,600 World War II aircraft, of which 34,700 were sold for flyable purposes and 26,900, primarily combat types, were sold for scrapping.

Most of the transports and trainers could be used in the civil fleet, and trainers were sold for US$875 to US$2,400. The fighters and bombers were of little peacetime use (outside of warbird preservation and aviation museums, and some early use for aerial firefighting in later decades) although some were sold. Typical prices for surplus aircraft were:

• Vultee BT-13 Valiant US$450
• Lockheed P-38 Lightning US$1,250
• North American AT-6 US$1,500
• Douglas A-26 Invader US$2,000
• North American P-51 Mustang US$3,500
• North American B-25 Mitchell US$8,250
• Boeing B-17 Flying Fortress US$13,750
• Consolidated B-24 Liberator US$13,750
• Consolidated B-32 Dominator US$32,500

Many aircraft were transferred to communities or schools for memorial use for a minimal fee or even for free. A Boy Scout troop bought a B-17 Flying Fortress for US$350.

General sales were conducted from these centers; however, the idea for long term storage, considering the approximate cost of US$20 per month per aircraft, was soon discarded, and in June 1946, the remaining aircraft, except those at Altus, were put up for scrap bid.