The Penn Central Lockheed Myth

Buckley Jr., Wm.F.
November 1975
National Review;11/7/1975, Vol. 27 Issue 43, p1256
The article focuses on the decision of the U.S. federal government to bail out Lockheed Corp. and Penn Central Corp. It is reported that in 1967, Lockheed was selling for $74 per share. In July 1971, before the loan guarantee, the stock was selling for $10. After the vote to guarantee the loan, the stock went down a point. Now it sells at about $7.50. Penn Central Corp. filed for bankruptcy on June 21, 1970. Since then, it has lost $1.5 billion on operations for the most part required by government. Penn Central has not paid one penny of interest to the more than 100,000 holders of its bonded indebtedness. According to the author, the notion that Congress stepped in for the purpose of helping stockholders is the kind of economic ignorance on which Democratic oratory thrives.


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