Mr. Justice Reed
delivered the opinion of the Court.
On November 29, 1944, the District Court for the District of Colorado confirmed a plan of reorganization for the debtor, the Denver & Rio Grande Western Railroad Co., 62 F. Supp. 384, notwithstanding the rejection of the plan by holders of the General Mortgage bonds pursuant to § 77 (e). Upon appeal the Circuit Court of Appeals reversed the order of confirmation. This Court granted certiorari, reversed the Circuit Court and affirmed the order of confirmation. 328 U. S. 495. The debtor consistently opposed the plan throughout those proceedings. After the opinion of this Court was filed on June 10, 1946, the debtor petitioned for a rehearing, which was denied October 28,1946. At about the same time as that of filing its petition for rehearing, it moved in the District Court (September 17, 1946) for a re-examination of the plan in the light of circumstances which had changed since the Interstate Commerce Commission’s hearings on the plan in May, 1941. 2541. C. C. 5, 6. The debtor specified three categories of changed conditions: “(a) The decline in money rates to a level far below the rates prevailing at these dates; (b) The recent public offering by the Government and purchase by private capital for private operation of the steel plant at Geneva, near Provo, Utah, which had been constructed by the Government in the exigencies of the War at a cost in excess of $200,000,000; (c) A permanent elevation of the National income through intensified industrial activity involving for the indefinite future a greatly increased demand for railway transportation.”
The debtor prayed that upon re-examination the District Court set aside its order of October 25, 1943, approving the plan, and its order of November 29, 1944, confirming the plan, and refer the proceeding back to the Interstate Commerce Commission for the formulation of a new plan. After a hearing on a motion to dismiss the debtor’s petition but without the introduction of evidence, the District Court dismissed the petition on October 30, 1946, on the grounds that the order of confirmation determined the rights of participation and that the District Court did not now have power to reopen the proceedings. The District Court also held that the petition failed to state a case that justified reconsideration. The debtor filed notice of appeal and requested a stay of execution of the plan on the same day; the latter motion was denied by the District Court at that time. Thereupon the debtor docketed its appeal in the Circuit Court of Appeals and applied for an order staying execution of the plan until the appeal should be considered. This application of the debtor was granted on November 2, 1946, by an order of Judge Phillips staying proceedings in the District Court to consummate the plan. A petition for cer-tiorari to the Circuit Court was filed in this Court under Judicial Code § 240 (a) which asked that we grant a writ of certiorari to the Circuit Court of Appeals, before judgment, and that the order of the District Court be affirmed in this Court. The grounds urged were that the action of the respondent was in violation of the mandate of this Court issued June 10, 1946, and that even if the mandate had not been violated the denial of the petition to reopen proceedings on the plan was not appealable because the petition for re-examination was in reality a petition for rehearing. Further, petitioner urged that this Court take and decide the whole case because the claim of change of circumstances was repetitious of the same claim rejected by this Court in its June, 1946, decision and that no allegations were made sufficient to justify a re-examination of the plan on account of- changes in circumstances since the June decision. Because of the importance of the questions raised to the efficient administration of railroad reorganizations under the Bankruptcy Act, we granted cer-tiorari. 329 U. S.708.
We may assume, arguendo, that both this Court upon appeal from an order of confirmation in bankruptcy, and the bankruptcy court itself, after its order of confirmation has been affirmed on review (11 U. S. C. § 205 (f)), may take cognizance of subsequent changes in conditions and order a plan re-examined by the Interstate Commerce Commission. On that assumption, we are of the opinion that the debtor has failed to allege the existence of changed conditions since our decision of June 10,1946, of a kind not “envisaged and considered by the Commission in its deliberations upon or explanations of the plan.” Reconstruction Finance Corp. v. Denver & R. G. W. R. Co., 328 U. S. 495, 522. We do not therefore think that re-examination would be justified in this case.
The conclusion in the foregoing paragraph removes the necessity of considering the question whether the respondent disregarded the effect of the judgment of this Court of June 10, 1946, which affirmed the orders of approval and confirmation of the plan. Likewise it disposes of any necessity to determine whether this petition in the District Court was in reality a request for a rehearing. Cf. United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 247.
Upon the same assumption employed above, we ruled in our decision of June 10, 1946, 328 U. S. 495, 534, that in this reorganization no changed circumstances, up to that date, presented to us by the debtor or other respondents in that review justified a re-examination of the plan as confirmed. This ruling was binding upon the District Court and the Circuit Court of Appeals as to changed circumstances arising after the order of confirmation and prior to our decision. When matters are decided by an appellate court, its rulings, unless reversed by it or a superior court, bind the lower court. Thus a cause proceeds to final determination. While power rests in a federal court that passes an order or decision to change its position on a subsequent review in the same cause, orderly judicial action, except in unusual circumstances, requires it to refuse to permit the relitigation of matters or issues previously determined on a former review.
The debtor’s brief and the opinion of the Circuit Court of Appeals on the hearing of the review of the orders of approval and confirmation of the plan make clear that changed circumstances in the period between the Interstate Commerce Commission hearings in May, 1941, and our decision of June 10, 1946, of a like character with those now alleged, were relied upon by the debtor in its former effort to set aside the District Court’s orders of approval and confirmation. The debtor argued on the former review, as it again argues, that the plan should not be confirmed because of the “radical lowering for the indefinite future of money rates.” And it was emphasized at that time that capitalizing on these lower rates would permit the issuance of a greater volume of securities against earnings of the debtor, and consequently a larger allotment to presently dissatisfied creditors. Every example of railroad refinancing, listed in respondent’s present brief to support by illustration the argument of falling interest rates, was listed in the brief on the last review for the same purpose. The purpose was to set forth instances of the issue of railroad securities at interest rates definitely lower than those borne by the debtor’s issues. The debtor in its brief of that time also argued the beneficial effects of the “permanent elevation of National income” upon the anticipated earnings of the debtor. Lastly, the debtor there pointed out that the establishment and construction of the great Geneva steel plant was “certain to be revolutionary in its contribution to the new earning power of the Debtor . . .” Although it did not then rely, as it does now, upon the purchase of that corporation by private capital, the argument, then as now, was that the prospective business from a great steel plant was a factor indicating higher earnings. The plant may or may not turn out to be strategically located for private low cost operation and distribution. The shift of ownership has only moderate significance.
In sum, the very kinds of changed circumstances which were argued here formerly as reasons for not approving and confirming the plan of reorganization were presented by the petition now under review to the District Court as reasons why that court should vacate its orders of approval and confirmation, and remand the plan to the Commission for reconsideration. The debtor argues that it only urged this Court to take judicial notice of the existence of these changed circumstances, and that our refusal to do so should not bar it from proving these changes in the District Court. Our holding was not based upon a conclusion that this Court could not take judicial notice of changes in economic conditions subsequent to approval by the Interstate Commerce Commission. We concluded that, even if weighed, the alleged changes were not of a kind which justified re-examination of the plan. 328 U. S.495, 534.
The questions of interest rates and increased earnings from the Geneva steel plant were considered by the Commission and the District Court before the order of confirmation. The approval of the plan by the Commission on June 14, 1943, appraised economic changes subsequent to the hearings. 254 I. C. C. 349, 356, 358, 359.
The Commission gave consideration to the interest rates the proposed securities should bear. 328 U. S. 495, 515, 516. There was a forecast of available income of $6,215,423 for annual charges in a future normal year. It was thought that this would support a capitalization of $155,000,000 plus, even though more than $35,000,000 of that represented by common stock participated only in earnings above the estimated normal except as to long-range advantages from capital investments and bond sinking-fund payments that had the effect of increasing the value of the common stock equities. 254 I. C. C. 15, 356. As appears from the tables of capitalization, annual charges and distribution of securities, 328 U. S. 495, 502-503, the interest rates chosen varied with the type of security. As none of the authorized securities are alleged by the debtor to have shown values much above par, the chosen rates of return have not proven to be excessive. See note 6, infra. From the various recommendations as to the proper interest for the new first mortgage bonds, the Commission selected finally a fixed rate of three per cent and a contingent rate of an additional one per cent. 233 I. C. C. 537, 542, 554-5; 254 I. C. C. 15, 387. To guard against a drain upon the reorganized railroad if interest rates should fall, a provision appears in the plan for refunding the authorized first mortgage bonds at a maximum premium of 5 per cent. This gives protection to the reorganized road if not to the unpaid creditors and excluded stockholders.
Much the same situation exists as to the Geneva Steel Plant. A discussion occurred before the District Court on October 23, 1942, in which it was recognized that the plant would make a substantial contribution to the traffic of the road. This was the basis for further consideration before approval by the Commission on its reconsideration of the plan, 254 I. C. C. 349, 356. The effect of the existence of this plant received further consideration in the Circuit Court of Appeals, 150 F. 2d 28,34,38,43.
As we indicated above, the alleged increases in the national income were briefed and decided contrary to the debtor’s contention on the former review. Nothing was called to our attention in the former review to indicate that an increased level of economic activity above that in actual existence when the order of confirmation was issued had occurred beyond that anticipated by the Commission. Earnings available for interest depend upon costs as well as upon revenue. It might be added to this Court's comments on railroad rate increases, 328 U. S. 495, 522, n. 29, that in handing down its order of December 5, 1946, granting certain increases, the Interstate Commerce Commission considered the necessity of meeting the increased costs.
The Commission made no finding that the cash value of the securities allocated to the senior creditors paid them in full. To justify the change of position of creditors from fully secured to partially secured, creditors were given opportunities to participate in profits through common stock ownership with a chance at larger earnings than the Commission's forecast anticipated. We held the priority rule was satisfied by this type of allocation. This was explained by our decision on the last review. 328 U. S. 495, 517-518. The debtor has made no allegation, either in this effort for re-examination or before, that the existing cash value of the securities allotted any creditor has ever aggregated the amount of the creditor’s claim against the debtor. We think the absence of such an allegation, of itself, demonstrates that the plan is not, because of excessive interest, unfair to the debtor or those for whom it is allowed to appear.
Until it can be contended with some show of reasonableness that the creditors senior to the creditors and stockholders whom the debtor represents here have received more in value than the face of their claims, the debtor’s insistence on a re-examination of the plan is without substantial support. See Northern Pacific Ry. Co. v. Boyd, 228 U. S. 482; Group of Investors v. Milwaukee R. Co., 318 U. S. 523, 541.
Not only does the debtor fail to allege any actual sales or values of the securities which would show that the creditors have received through the allotted securities payments on their claims in excess of their face, but there is no allegation of a radically improved situation as to this railroad’s earnings available for interest. Although distortions of income available for interest from varying causes do appear in the reports of the Trustees, available interest is an important figure as a basis for the consideration of capitalization. Trafile comparisons are not specifically set out. While the allegations of a petition for re-examination into a confirmed railroad reorganization plan need not contain allegations of the primary facts, the allegations should allege ultimate facts, such as those just referred to, sufficient to indicate the factual basis for a reexamination. The allegations of changed conditions in this petition to the District Court do not have the specificity of those which caused this Court in 1932 to direct an injunction against a Commission order of 1930 that was based on hearings that antedated the depression, beginning in 1929. The ruling in that case has not been extended to authorize the reopening of hearings before the Commission because of alleged changes in conditions. For cases of that type, this Court has pointed out, there must be a showing of substantial injury. We have approved a statement that the Atchison case rested upon exceptional facts.
To open a confirmed plan of railroad reorganization, assuming the power to do so, accepted after years of consideration, requires a showing by allegation of injustice to the complaining debtor or junior creditors far stronger than any here made. Compare Pewabic Mining Co. v. Mason, 145 U. S. 349, 356, 367; Group of Investors v. Milwaukee R. Co., 318 U. S. 523, 543.
Much of what we have written is directed at the suggestion that there should be a plenary re-examination, of reorganization proposals for the Denver & Rio Grande. As to that suggestion, we are of the opinion that the record affirmatively shows a proper basis for the valuation and allocation of securities by the Commission, 328 U. S. 495, 502-503, and that the record fails to show any sound basis for a re-examination on account of changed circumstances between May, 1941, and June 10,1946.
So far as the period since June 10, 1946, is concerned, there is no basis in this record or in anything judicially known to us for a conclusion that there has been a significant change in interest rates, earnings available for interest or traffic. Nor do we see that the action of Congress in passing S. 1253, on July 31, 1946, should persuade us to require a stay to await further enactments that might affect this reorganization. It was vetoed. President’s Memorandum of Disapproval, August 13, 1946. Our understanding of our duties under the Railroad Reorganization Act, in the face of strong criticism of its provisions, was expressed in the former review of this plan, 328 U. S. 495, 509,510. It need not be repeated. We must continue to act under the now existing law. Whether or not changes may be made that will effect this reorganization, we do not know. It is quite understandable to us that stockholders strive to preserve the equities of their investments and that creditors should feel, in this case, that they have not recovered the value of their investment. Such convictions are to be respected.
The suggestion is made that there is a public interest in what persons or corporations hold in the future a controlling voice in the management of this railroad. This matter had the consideration of the Commission, 254 I. C. C. at 367 et seq. The plan adopted contains a ten-year voting trust for the new stock with Commission-regulated provisions for its sale. 254 I. C. C. at 400. The record does not present any ground for concluding that the new owners will be any the less solicitous for the public welfare than those who, at present, hold the stock certificates.
However, nothing before or since the confirmation of this plan indicates any disregard by the Commission or the courts of the interest of operators, stockholders, the creditors or the public. When the Interstate Commerce Commission finds the value of a railroad system by any means, the correctness of the result cannot be mathematically proved or disproved. The difficulties of appraisal are multiplied by the necessity of looking into the future to estimate earnings. Earnings estimates are made with allowance for changing economic conditions. So are interest rates. All this is recognized by everyone; but the Commission has found no better way to determine the allocation of new securities among the various classes of stockholders or of creditors of a railroad with their different rights. Cf. Reconstruction Finance Corp. v. Denver & R. G. W. R. Co., 328 U. S. 495, 505-509.
The reorganization should be carried out. The order of the Circuit Judge in directing a stay of the consummation of the plan is vacated and the order of the District Judge of October 30, 1946, denying the petition is affirmed.
Great Western Telegraph Co. v. Burnham, 162 U. S. 339, 344; King v. West Virginia, 216 U. S. 92, 101; Messenger v. Anderson, 225 U. S. 436, 444; Wichita Co. v. City Bank, 306 U. S. 103, 106. Cf. Chaffin v. Taylor, 116 U. S. 567, 572.
The earnings contingency which authorized the payment of the prior contingent interest, as expressed in technical detail at 2541. C. C. 393-94, was the net income less certain fixed charges.
2541. C. C. 387.
The national income as reported in the annual publication of the Department of Commerce, The Survey of Current Business, for the following years was, in billions:
1940. 77.6
1941. 96.9
1942. 122.2
1943. 149.4
1944. 160.7
1945. 161.0
The national income as computed by the Department of Commerce is tentatively estimated at 164.0 billions for 1946; for 1947, no statement of an expected increase. See The Economic Report of the President to the Congress, of January 8, 1947, H. Doc. No. 49, 80th Cong., 1st Sess., as required under the Employment Act of 1946, 60 Stat. 23.
The Dow-Jones average of the ten first-grade rails was 117.25 on June 10, 1946, but had fallen to 110.73 on December 30, 1946. The market bid for the first bonds of the reorganized debtor, when, as, and if issued, was 101 on June 10, 1946, but had fallen to 89 on December 30, 1946. These latter figures are from the Commercial and Financial Chronicle, issues of June 10 and December 30, 1946.
National income is the total net income earned in production by individuals or businesses.
While the reports of the Commission deal with the national railroad situation rather than with individual roads, an examination of them does not indicate that the Commission intended to supply by means of the increase in rates a net railway operating income sufficient to give a rate of return on invested capital substantially higher than for normal pre-war years. 264 I. C. C. 695, 722, 728; I. C. C., Ex parte No. 162, December 5, 1946, mimeographed report, p. 7.
See the discussion of increased revenue and costs, mimeographed report, supra, pp. 3, 4, 5.
As far as they are readily available to us, the ranges of the reorganized road’s securities traded on a when, as and if issued basis have been as follows:
1945 1946
High Low High Low
First Bonds. 103 82 102 89
Income Bonds. 89% 44% 89 50
Preferred Stock. 75% 37
Common Stock. 35% 16
Bond ranges are from Year’s End Edition of Moody’s Bond Record, Yol. 14, No. 1, January 10, 1947; stock ranges are from Standard & Poor’s Earnings and Ratings Stock Guide, Year’s End Edition, January, 1947.
The highest market bids on the securities so far this year are, so far as the figures are available to us:
First Bonds. 89
Income Bonds. 62
Preferred Stock. 50
Common Stock. 16%
From Commercial & Financial Chronicle, Editions of January 6, January 13, and January 20,1947.
The annual reports of the Trustees to stockholders show the income available for interest as follows:
1942. $17,044,420.39
1943. 11,573,667.94
1944. 8,157,880.25
1945. 1, 503,289.07 Dr
In 1946 the income available for all fixed charges at the end of eleven months was $3,405,118.00.
This deficit is shown after deducting from gross earnings a tax accrual for prior years of $3,648,589.63 (in addition to the tax accrual for the year 1945) and $12,790,657.50 in amortization of war facilities.
Revenue freight carloading weekly report of American Association of Railroads shows car loadings for the month of December for the years 1941 to 1946 as follows:
1941. 14,045
1942. 16,915
1943. 14,571
1944. 15,308
1945. 12,007
1946. 13,517
Atchison, Topeka & Santa Fe Railway Co. v. United States, 284 U. S. 248, 256.
United States v. Northern Pacific Railway Co., 288 U. S. 490, 494.
Interstate Commerce Commission v. City of Jersey City, 322 U. S. 503, 515.
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