Among the most important amendments to Section 77 of the Bankruptcy Act1 proposed at the last two sessions of Congress, are those which involve what court shall be charged with the performance of the judicial functions in the administration of the Act, and what shall be the relative functions of this judicial tribunal and the Interstate Commerce Commission. These amendments, and the considerations underlying them, are the subject of this discussion. Such legislation must, of course, be framed with a recognition of the inherent peculiarities of the work at hand. One of the most important of these peculiarities is that the reorganization of a railroad affects the public interest. The public is interested in the unimpaired capacity of the railroad to render efficient and economical service. An unreasonable capital structure, which burdens the property with excessive charges and threatens it with financial disruption, is clearly inconsistent with that public interest. As a corollary, the public interest requires the provision of a capital structure which will contribute to the good credit of the railroad and thus permit securing the necessary new capital from time to time through appropriate mediums for future financing. It has been generally conceded that the equity reorganizations effected before the passage of Section 77 did not adequately meet these necessities, and this was one of the reasons offered for the enactment of the section. Actually, the public interest also requires such a reorganization of the physical operations of the property as will tend to improve and protect its economic integrity by releasing it from the deadweight of unproductive facilities through abandonments and from excessive competition through consolidations. If the process were rightly arranged, this kind of physical reorganization would precede or accompany the corporate reorganization. But the domination of legislation for the railroads by labor, and the politicians' willingness that the economic efficiency of the property be sacrificed for the protection and providing of employment, apparently makes such action impossible. Attention is thus being given only to corporate reorganizations, whereas atten-