RAILROADS: Financial Housecleanings

Immediate reason why one-third (by mileage) of all U. S. railroads are in receivership or reorganization is their mountain of fixed charges (annual bill: $600,000,000), their recurrent burden of maturities. ICC, which must approve all reorganization plans, has lately shown determination to slash bonded debt before letting railroads out of courts, has insisted that stockholders must have real equities or be wiped out in reorganization. Last week two old offenders against the rules of sound financing got typically drastic sentences when ICC proposed its own plans for their recapitalization.

New York,...

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