Prelude to Scandal?

The ink was barely dry on the 1934 Corporate Bankruptcy Act when depression-sunk U.S. railroads rushed into Federal Court to be bailed out. Most of them, representing investments of $4 billion and more than 40,000 miles of track, are still in court. Why?

Montana's Burton Kendall Wheeler, rambunctious chairman of the Senate Interstate Commerce Committee, recently proposed a Senate investigation to find out. Last week, the Wheeler committee put a burr under the Senate in the form of a 94-page report on railroad reorganizations. The report painted an ugly picture.

Quick, Cheap, Painless. Section 77 of the Bankruptcy Act was designed...

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