By examining some early major railroad reorganizations, this study looks at the causes of financial difficulties of railroads and alternative methods of reorganization.
This engrossing study of railroad reorganization looks at the financial history of the seven most important railroads which failed from 1892 – 1896, and one railroad that was reorganized in 1902. Their problems were strikingly alike. However caused, their financial difficulties were expressed in high fixed charges, and usually in excessive floating debts. The remedy sought was the comprehensive exchange of old securities for new. A study of alternative reorganization methods can indicate dangerous policies as well as those that are just and likely to be successful.
This engrossing study of some early major railroad reorganizations reveals the causes of financial difficulties and alternative methods of reorganization in that industry. The problems of these railroads were strikingly similar. However caused, their financial difficulties were experessed in high fixed charges, and usually in excessive floating debts. The remedy sought was the comprehensive exchange of old securities for new ones. A study of alternative reorganization methods can indicate risky policies as well as those that are fair and most likely to be successful. This book makes for good study for those who are interested in historical bankruptcy events as well as bankruptcy principles. Railroad buffs will also find pearls of information here.
Stuart Daggett was a Professor of Transportation on the Flood Foundation, a
scholar in railroad economics and Dean of College of Commerce, Berkeley.
| Chapter I. Baltimore and Ohio |
1 |
|
Early history -- Extension to Chicago --
Trunk-line rate wars -- Effect on the company -- Extension to New York
-- Sale of bonds to pay off floating debt -- Unsatisfactory traffic
conditions -- Receivership -- Mr. Little's report -- Reorganization --
Subsequent history. |
|
| Chapter II. Erie |
34 |
|
Early history -- Reorganization --
Wall Street struggles -- Financial difficulties -- Second reorganization
-- Development of coal business -- Extension to Chicago -- Grant &
Ward -- Financial readjustment -- New York, Pennsylvania & Ohio --
third reorganization -- Later history. |
|
| Chapter III. Philadelphia & Reading |
75 |
|
Early history -- Purchase of coal lands --
Funding of floating debt -- Failure -- Struggles between Gowen and his
opponents -- Reorganization -- Second failure and reorganization |
|
| Chapter IV. Philadelphia & Reading |
118 |
|
Difficulties of the Coal & Iron Company
-- McLeod's policy of extension -- Collapse of this policy -- Failure of
company -- Summary of subsequent history |
|
| Chapter V. The Southern |
146 |
|
Richmond & Danville -- East Tennessee,
Virginia & Georgia -- Formation of the Southern Railway Security
Company -- Growth and combinations -- Failure and reorganization of the
East Tennessee -- Reversal of position between the Richmond &
Danville and the Richmond & West Point Terminal -- Acquisition of
the Central of Georgia -- Failure and reorganization of the whole system
-- Subsequent development |
|
| Chapter VI. Atchison, Topeka & Santa Fe |
192 |
|
Charter -- Strategic extensions --
Competitive extensions -- Effect on finances -- Raise in rate of
dividend -- Reorganization of 1889 -- Acquisition of the St. Louis &
San Francisco and of the Colorado Midland -- Income bond conversion --
Receivership -- English reorganization plan -- Mr. Little's report --
Final reorganization plan -- Sale -- Subsequent history. |
|
| Chapter VII. Union Pacific |
220 |
|
Acts of 1862 and 1864 -- High cost of
construction -- Forced combination with the Kansas Pacific and the
Denver Pacific -- Unprofitable branches -- Adam's administration --
Financial difficulties -- Debt to the Government -- Receivership and
reorganization -- Later history. |
|
| Chapter VIII. Northern Pacific |
263 |
|
Act of 1864 -- Failure and reorganization
-- Extension into the Northwest -- Villard and the Oregon &
Transcontinental Company -- Lack of prosperity -- Refunding mortgage --
Lease of Wisconsin Central -- Financial difficulties -- Receivership --
Legal complications -- Reorganization -- Subsequent history. |
|
| Chapter IX. Rock Island |
311 |
|
Charter -- Early prosperity --
Reorganization of 1880 -- Conservative policy -- Extension -- Pays
dividends throughout the nineties -- Moores obtain control --
Reorganization of 1902 -- Further extensions -- Impaired credit of the
company. |
|
| Chapter X. Conclusion |
334 |
|
Definition of railroad reorganization --
Causes of the financial difficulties of railroads -- Unrestricted
capitalization and unrestricted competitions -- Problem of cash
requirements -- Problem of fixed charges -- Distribution of losses --
Capitalization before and after -- Value of securities before and after
-- Provision for future capital requirements -- Voting trusts --
Summary. |
|
