Word: icc
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Dates: during 1940-1949
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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...
...Chicago Union Station Co. decided to float a refunding issue of $16,000,000 in 3⅛% first mortgage bonds, called in its banker, Manhattan's Kuhn, Loeb & Co., to handle the financing. As Morgan Stanley and the other noncompetitive firms would have done, Kuhn, Loeb withdrew when ICC suggested that Union Station should open the issue to competitive bidding...
Since last November, when Justice Bill Douglas' famed Los Angeles Lumber decision read the riot act to underwater stockholders, common shares in bankrupt railroads have not been worth much. Mobile & Ohio, Missouri Pacific, Milwaukee preferred and common stockholders have been purged by ICC reorganization plans, bondholders given the properties. Last week Pennroad Corp., which wrote its security holdings down by $87,959,517 in 1938, began to shovel some of its charred chestnuts into the fire, revealed that it had sold 152,119 of its original 402,119 shares of Seaboard Air Line (in receivership). The shares, which...
...tired of waiting for railroad action, ICC ordered the Eastern roads to cut rates to 2?. Passenger revenues (like business in general) rose. In 1938, the Eastern roads got 18 months' relief from the 2? rate, went to 2½? for an experiment. Passenger revenues (like business in general) fell. To complicate the experiment, the roads interrupted it with lower World's Fair rates, sliding scale round-trip fares, etc. Result: at the end of the 18 months their experience with rates and revenues could be used to prove anything, but could prove nothing conclusively...
Last month the roads went before the ICC in Washington and asked for a seven-month extension of the 2½? fare, to complete their research (TIME, Jan. 15). Last week the Commission shouted a 7-to-3 no, ordered them to go back to 2? March...