"Railroad Bailouts in the Great Depression"

The Reconstruction Finance Corporation loaned 45 U.S. railroads over $802 million between 1932 and 1939. Railroads that received government loans did not improve their profitability, employment, or capital expenditure, but instead reduced their leverage. Bailing out a railroad resulted in an immediate increase in its bond prices and reduced ratings downgrades but did not aid railroads to avoid defaulting on their debt. The net result of government aid appears to have been a transfer from taxpayers to bondholders.