Great railroads buy their cars and locomotives in much the same way as an individual buys an automobile—on the instalment plan. Instead of arranging the purchase through a financing company, the carriers usually sell equipment trust certificates to the public. Repossessions are exceedingly rare, for in order to keep its rolling stock a road will generally meet its instalment and interest when it can pay no other fixed charges. Not since 1910, when Buffalo & Susquehanna defaulted, have bondholders actually seized and sold a yard-full of...
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