ABSTRACT
Nearly all railway reorganizations recognize the justice of this position, and the plans are arranged accordingly. Preferred stocks given in exchange for the sacrifices of the old bondholders are much better than income bonds from the point of view of good corporation financiering. Corporation reorganizations resolve themselves into commercial problems rather than legal. If the present charter be retained, the onerous contract is still in force even though temporarily disowned by the receivers; if it is sought to throw off these contracts by a sale to a company newly organized under present laws, an equally large or even larger loss may be entailed. The legal doctrine and the practice regarding receiverships and receivership problems have, in the United States, been developed thus far largely in the affairs of railways. Already cases of the insolvency of large manufacturing companies have been before the courts.
