Thanks to Moakley," Pioneer Institute, April 24,
characteristic of similar increases in capital invest-
2000, http://www.pioneerinstitute.org/research/
ment that have followed other technological
opeds/moakley.cfm.
advances both prior and subsequent to the 19th-
century rail boom. Promoters of rail expansion
17. Bay State Transit Services, LLC, v. National
"continually stressed the need to act quickly in
Railroad Passenger Corporation, et al., U.S. District
order to outstrip various dangers they feared
Court for the District of Columbia, CA: 01-
could overtake the nation. . . . If there was one
CV01926, September 13, 2001, p. 4.
theme that pervaded all the literature, it was that
the nation had to change--and quickly. To stand
18. Steve Bailey, "Blood on the Tracks," Boston
still, promoters claimed, would be fatal." J. A.
Globe, November 12, 1999.
Ward, Railroads and the Character of America,
18201887 (Knoxville: University of Tennessee
19. Bombardier Corporation v. National Railroad
Press, 1986), p. 7.
Passenger Corporation, U.S. District Court for the
District of Columbia, CA: 01-2335(RCL),
32. Douglas G. Baird, "The Hidden Virtues of
November 8, 2001, p. 5.
Chapter 11: An Overview of the Law and Economics
of Financially Distressed Firms," Chicago Working
20. Laurence Arnold, "Lawmakers Mull Future of
Paper in Law and Economics, March 1997, pp.
Amtrak," Associated Press, July 25, 2001.
2021. T. G. McCulloh, president of the
Cumberland Valley Railroad, lamented the fact that
21. "Trop Peu, Trop Tard, Trop Amtrak," The
the urgent drive to expand rail service during this
Economist, August 11, 2001.
period had caused his company's line to be built in a
substandard fashion. Pennsylvania, House, "Annual
22. Anthony Haswell v. National Railroad Passenger
Report of the Cumberland Valley Rail Road
Corporation, U.S. District Court for the District of
Company to the Legislature," Journal 2 (183839):
Columbia, Civil Action No. 1:01CB01643, filed
153, cited in Baird, p. 22.
July 30, 2001.
33. S. Daggett, Railroad Reorganization (Chevy
23. Anthony Haswell, "Amtrak Sued to Disclose
Chase, Md.: Beard Books, 1999), p. v.
Train Finances," Press release, PRNewswire, July
30, 2001, www.prnewswire.com.
34. Among the railroads that were reorganized in this
fashion were the Richmond & West Point Terminal,
24. Amtrak Reform and Accountability Act of
the Reading, the Erie, the Northern Pacific, the
1997 (P.L. 105-134), Title II, Fiscal Accountability,
Atchison, the Baltimore & Ohio, the Norfolk &
sec. 204(c)(2).
Western, the Louisville, New Albany & Chicago, the
Ann Arbor, the Seattle, Lake Shore & Eastern, the
25. John Fund, "Railing against Reform," Wall
Pecos Valley and many smaller lines. Ibid.
Street Journal, Online Opinion Journal, January 3,
2002, http://interactive.wsj.com.
35. According to the GAO, only 5 of Amtrak's 40
routes account for half of its revenues. Fund.
26. Senate Committee on Commerce, Science,
and Transportation, "Amtrak Reform and
36. U.S. General Accounting Office, "Issues
Accountability Act of 1997," Report 105-85 on S.
Associated with a Possible Amtrak Liquidation,"
738, September 24, 1997, p. 16.
p. 14.
27. U.S. General Accounting Office, "Issues Associated
37. Baird, p. 21. See also Fosdick v. Schall, 99 U.S.
with a Possible Amtrak Liquidation," p. 2.
235 (1878).
28. Robert P. Murphy, general counsel, U.S.
38. Typical modifications to 19th-century railroad
General Accounting Office, Letter to Rep. Bud
bonds included a reduction in the rate of interest
Shuster, chairman, House Committee on Trans-
payable, a reduction in principal or deferral of principal
portation and Infrastructure, October 20, 1997, p.
payments, and conversion of interest obligations from
6.
an absolute right of bondholders to one contingent
upon the railroad's ability to generate revenues at an
29. 11 U.S.C. § 1101 et seq.
agreed-upon level. Creditors also agreed to a reduction
in the priority of their claims from debt to preferred
30. Bankruptcy Reform Act of 1978, as amended,
stock. Baird, p. 25.
codified at 11 U.S.C. § 101 et seq. Cited here-
inafter as Bankruptcy Code.
39. See R. W. Gordon, "Legal Thought and Legal
Practice in the Age of American Enterprise,
31. The haste with which new track was laid and
18701920," in G. Geison, Professions and Professional
railroad lines expanded during this period was
15