...The Emergency Loan Guarantee Act of 1971 (click title to entry - thank you) provided up to $250 million in guaranteed loans to Lockheed Aircraft Corporation. As of December 1976, $100 million of these loans were still outstanding. This thesis is an investigation of the Emergency Loan Guarantee Act, the Emergency Loan Guarantee Board, and Lockheed Aircraft Corporation during the 1971-1976 time frame. Both the legislation and Lockheed's subsequent performance under the 1971 Act are evaluated. (Author)...
By 1977, Lockheed had paid off its loans, and its dependency on the federal loan guarantees came to an end. The government earned about $112.22 million in loan fees.
$3.2 billion - Penn Central Railroad
In May 1970, Penn Central Railroad, then on the verge of bankruptcy, appealed to the Federal Reserve for aid on the grounds that it provided crucial national defense transportation services. The Nixon administration and the Federal Reserve supported providing financial assistance to Penn Central, but Congress refused to adopt the measure. Penn Central declared bankruptcy on June 21, 1970, which freed the corporation from its commercial paper obligations. To counteract the devastating ripple effects to the money market, the Federal Reserve Board told commercial banks it would provide the reserves needed to allow them to meet the credit needs of their customers.
In 1976, the federal government consolidated the still struggling Penn Central with five other railroad companies that were also failing to form Consolidated Rail, or Conrail. The government spent $19.7 billion, including roughly $7.7 billion for the initial investment, to keep Conrail operating. By 1981, Conrail began to earn a profit. The government sold Conrail in 1987 for $3.1 billion. In addition to the sale price, the Treasury received a $579 million dividend from Conrail.
$7.8 billion - Franklin National Bank
In the first five months of 1974 the bank lost $63.6 million. The Federal Reserve stepped in with a loan of $1.75 billion.
As the story behind Franklin National's failure unfolded, evidence emerged of corruption and shady business practices among the bank's executives -- several were eventually convicted. With the need for further intervention apparent, the FDIC stepped in as receiver that same year and sold Franklin National's104 branches and other assets to European American Bank. By 1981 the FDIC had sold Franklin assets worth about $5.1 billion. The agency was still owed another $185.3 million in interest.
