When rising costs and falling revenues snipped the net operating income of Erie Railroad from $1,200,000 in December 1936 to $45,000 in December 1937, it could no longer meet its debt charges. When RFC refused Erie's request for a $6,006,000 loan because Erie's wealthy parent company, the Chesapeake & Ohio, would not guarantee the loan (TIME, Jan. 17). the jig was up. Last week, therefore, Erie wearily filed a petition to reorganize under section 77 of the Bankruptcy Act, its fourth reorganization in 100 years.
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