Shattered Rails, Ruined Credit: Financial Fragility and Railroad Operations in the Great Depression

  title={Shattered Rails, Ruined Credit: Financial Fragility and Railroad Operations in the Great Depression},
  author={Daniel Schiffman},
  journal={The Journal of Economic History},
  pages={802 - 825}
  • Daniel Schiffman
  • Published 1 September 2003
  • Economics
  • The Journal of Economic History
This article uses a new panel dataset to investigate the relationship between financial fragility and real activity on U.S. railroads during 1929–1940. Leverage had a negative effect on maintenance, within small firms only. Bankruptcy had a positive effect on maintenance and employment, within large firms only. Both leverage and bankruptcy effects were significantly larger during the worst depression years. Had all railroads been bankrupt during 1930–1933, GDP would have increased by 0.2… 

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