Louis Brandeis

“ At the time of the passage of Transportation Act 1920, most of the railroads of the United States lacked funds for necessary improvements, equipment, and expansion of facilities. Some of the carriers needed funds, also, to meet maturing obligations. The credit of many carriers was seriously impaired. There was a general reluctance among investors to purchase new railroad securities even of the strongest railroads. Congress deemed it important to preserve for the nation substantially the whole existing transportation system. ”

“ The provision for loans under section 210 would have been frustrated. For, carriers could ill afford voluntarily to contract new debts thereunder which would displace, pro tanto, their existing bonded indebtedness. The entire spirit of the act makes clear the purpose that the rule leading to such consequences should not be applied.
Moreover, Congress evidenced unmistakably its purpose to rely, for obtaining payment of the Government's advances, upon means other than the priority provided for by section 3466 (31 USCA § 191) . ”

“ The interest rate required is much greater than that which ordinarily accompanies even a business loan carrying such assurance of repayment as would have resulted from an application of the priority rule. Thus, both the general purposes of title 2 and its specific provisions make it clear that Congress intended to exclude the indebtedness so arising from the scope of section 3466 of the Revised Statutes (31 USCA § 191) just as under the Federal Control Act it had excluded therefrom claims incident to current operation of the railroads. ”