This is an appeal from an order of the United States District Court for the District of Connecticut, 330 F.Supp. 131, declaring an equitable lien on certain property and imposing a constructive trust on income from certain other property transferred by the debtor New York, New Haven and Hartford Railroad (New Haven) to the Penn Central Transportation Company (Penn Central). We reverse on the ground that the district court lacked subject matter jurisdiction under § 77(a) of the Bankruptcy Act, 11 U.S.C. § 205(a) (1970), to issue the order, since the property affected is within the exclusive jurisdiction of another district court.
This appeal involves one more stage in the lengthy and complicated proceedings involving the reorganization of the New Haven, the merger of the Pennsylvania Railroad and the New York Central Railroad to form the Penn Central, the inclusion of the New Haven’s lines in the merged Penn Central, and Penn Central’s subsequent petition for reorganization. An outline of the various proceedings *685from 1961 to 1969 is set forth in New Haven Inclusion Cases, 399 U.S. 392, 399-418, 90 S.Ct. 2054, 26 L.Ed.2d 691 (1970). See also Penn-Central Merger and N & W Inclusion Cases, 389 U.S. 486, 88 S.Ct. 602, 19 L.Ed.2d 723 (1968) and Baltimore & Ohio R. R. v. United States, 386 U.S. 372, 87 S.Ct. 1100, 18 L.Ed.2d 159 (1967). For purposes of this appeal, a brief outline of the previous proceedings will suffice.
In July, 1961, New Haven filed a petition for reorganization pursuant to § 77 of the Bankruptcy Act, 11 U.S.C. § 205 (1970), in the United States District Court for the District of Connecticut. The court approved the petition and appointed trustees. In March, 1962 the Pennsylvania and New York Central railroads applied to the Interstate Commerce Commission for permission to merge. In June, 1962 the New Haven trustees filed with the Commission a petition for inclusion in the proposed merged railroad. The Commission has never proposed a reorganization plan for the New Haven itself. In 1966 the Commission approved the merger of the Pennsylvania and New York Central but required as a condition of approval of the merger that the New Haven’s lines be included in the merged railway system. The New Haven trustees and representatives of the Pennsylvania and New York Central railroads thereupon entered into a Purchase Agreement, subsequently modified, which provided that all the New Haven assets would be transferred to Penn Central in return for cash, and stock and bonds of Penn Central. The New Haven trustees requested the Connecticut reorganization court to permit them to petition the Commission to require inclusion of the New Haven’s lines in the merged rail system on the terms set forth in the Purchase Agreement. The Connecticut reorganization court granted permission, and in 1967 the Commission approved inclusion on the terms provided in the Purchase Agreement. Subsequent litigation dealt with the proper value to be assigned to the New Haven properties. On December 24, 1968, however, because of the precarious financial condition of the New Haven and the imminent termination of its rail service, the Connecticut reorganization court approved the transfer of New Haven’s assets to Penn Central, leaving the exact amount and form of consideration to be paid by Penn Central to be settled finally at a later date. Since the Commission conditioned approval of the merger on inclusion of the New Haven, Penn Central, as a result of the merger, consented to be bound by “whatever terms the [Connecticut] reorganization court might [later] confirm . . . . ” New Haven Inclusion Cases, supra, 399 U.S. at 428, 90 S.Ct. at 2076. However the transfer of New Haven’s assets was expressly made “free and clear of all liens, charges and encumbrances.”
The decision of the Supreme Court in New Haven Inclusion Cases, handed down on June 29, 1970, upheld the determination of the Connecticut reorganization court that the value of the New Haven property transferred to Penn Central was approximately $174.6 million. Under the Purchase Agreement, an object of which was to assure that the New Haven estate would actually receive full compensation, a portion of the consideration was to be paid to the New Haven estate in the form of Penn Central stock and bonds. Because of mounting financial pressures, however, the market value of Penn Central stock declined drastically from the date of the first negotiations between New Haven and Penn Central representatives and the final inclusion of the New Haven in the merger. See In re New York, N. H. & H. R. R., 304 F.Supp. 793, 808-810 (D.Conn.1969) ; New York, N. H. & H. R. R. Co. First Mortgage 4% Bondholders’ Committee v. United States, 305 F.Supp. 1049, 1064-1065 (S.D.N.Y.1969). See also Pennsylvania Rail-Road Co. — Merger—New York Central Railroad Co. (Fifth Supplemental Report), 334 I.C.C. 528, 532 (1969). The Supreme Court, therefore, while agreeing with the Connecticut reorganization court’s valuation, remanded the case for “[f]urther proceedings be*686fore the Commission and the appropriate federal courts ... to determine the form that Penn Central’s consideration to New Haven should properly take . . . .” New Haven Inclusion Cases, supra, 399 U.S. at 489, 90 S.Ct. at 2108.
On June 21, eight days before the Supreme Court’s decision was announced, Penn Central filed a petition for reorganization in the Eastern District of Pennsylvania. The petition was approved the same day and the district court issued an order restraining and enjoining all persons “from interfering with, seizing, converting, appropriating, attaching, garnisheeing, levying upon, or enforcing liens upon, or in any manner whatsoever disturbing any portion of the assets . . . properties or premises belonging to, or in the possession of the Debtor [Penn Central] . . . and from commencing or continuing any proceeding against the Debtor” with certain exceptions not here relevant.
After receiving the mandate of the Supreme Court, the Connecticut reorganization court did not remand to the Commission for further proceedings. Instead, it ordered, on August 10,1970, that a hearing be held on the question of whether the court should modify its pri- or orders with respect to the New Haven assets previously transferred to Penn Central. The Penn Central trustees appointed by the Pennsylvania reorganization court appeared at the hearing, although they were not parties to the New Haven reorganization. After various proceedings extending over approximately ten months, the Connecticut reorganization court issued a decision on June 11, 1971. The court first held, on various grounds, that it had subject matter jurisdiction. Because the decline in the market price of Penn Central stock and Penn Central’s pending reorganization had rendered the court’s plan for compensation for the New Haven property grossly inequitable, the court declared that, in order to implement the Supreme Court’s mandate to compensate fully “the New Haven estate for the balance [of the purchase price] remaining due and to provide reasonable security for the sum owed,”
“(1) . . . the 956,576 shares of common stock of the Penn Central Company, the parent company, should be treated as collateral security, of indeterminate value, for the balance of the purchase price due by the Penn Central Trustees; it is wholly unrealistic to treat the stock otherwise; (2) that an equitable lien must be declared on all of the former assets transferred by the New Haven to Penn Central, exclusive of (a) rolling stock and (b) the New Haven’s one-half interest in the excess income from the Grand Central [Terminal] properties; and (3) that the Penn Central Trustees hold the latter item of property subject to a constructive trust in favor of the New Haven estate.”
The reasoning of the district court was that, as the Supreme Court had determined that the New Haven estate had the constitutional right to receive $174.6 million for the assets transferred to the Penn Central, the New Haven estate could not be relegated to the position of a general creditor in the pending Penn Central reorganization.
On June 21, 1971 the Pennsylvania reorganization court issued an order directing the Penn Central trustees to appear before the Connecticut reorganization court and to object to the entry of any order based on that court’s decision of June 11, on the ground that the Connecticut reorganization court had no jurisdiction to issue an order of the nature indicated by the decision of June 11. The order of the Pennsylvania reorganization court enjoined any person “from taking any action which would enforce, collect or cause to be perfected or paid any claim against the Debtor or its estate arising out of the inclusion of the New Haven into the Debtor, other than in these proceedings, or which would interfere with the primary jurisdiction of this Court to deal with properties in its possession or under its control pending further order of this court.” In contravention of the constructive trust declared, but not yet *687ordered, by the Connecticut reorganization court, the Pennsylvania court directed the Penn Central trustees to use all the income from the Grand Central Terminal properties to pay Penn Central’s current expenses. Despite this action, the Connecticut reorganization court entered its order on June 22 and appointed counsel to perfect the interest of the New Haven estate in the property. An appeal of the order of the Connecticut district court was thereupon taken to this court.
I. The Issues
The issue presented by this appeal is whether the Connecticut district court had jurisdiction to declare an equitable lien on the property transferred by New Haven to Penn Central and a constructive trust on that portion of the income from the Grand Central Terminal properties that, prior to the transfer, New Haven had the right to receive.
Section 77(a) of the Bankruptcy Act, 11 U.S.C. § 205(a) (1970), provides in relevant part:
“If the petition [stating that the railroad is insolvent and wishes to reorganize its capital structure] is so approved [by a judge of the district court of proper venue], the court in which the order is entered shall, during the pendency of the proceedings under this section and for the purposes thereof, have exclusive jurisdiction of the debtor and its property wherever located. . . .” (Emphasis added).
In the present case we are faced with conflicting claims of subject matter jurisdiction over certain property by two district courts sitting as reorganization courts in proceedings involving two debt- or railroads. The property over which both courts claim jurisdiction is the property formerly comprising the assets of the New Haven that the New Haven was required to transfer to Penn Central before the receipt of compensation for it. The Connecticut reorganization court approved the transfer of all these properties to Penn Central in return for consideration in an amount and form to be determined in further proceedings.
The appellants argue that the Connecticut reorganization court had no jurisdiction to declare an equitable lien and a constructive trust on property and income formerly belonging to the New Haven. They maintain that, since the property was transferred to Penn Central almost three years before the issuance of the order that is the subject of this appeal, the Pennsylvania district court had exclusive jurisdiction under § 77(a) to determine all rights and interests in all of Penn Central’s property, including the former property of the New Haven.
The appellees advance four bases of jurisdiction upon which the Connecticut district court could premise its order of June 22. First, they say, the “exclusive jurisdiction” provision of § 77(a) cannot be read literally, and the district court’s action comports with the policy underlying that section. Second, the Connecticut reorganization court had jurisdiction to implement the Supreme Court’s mandate in the New Haven Inclusion Cases. Third, the Connecticut reorganization court reserved jurisdiction, in its order authorizing the transfer of the New Haven estate’s assets, over the property so transferred. Finally, the Connecticut reorganization court had in personam jurisdiction over the Penn Central trustees and thus had the power to adjudicate the rights of the parties in property not located within the court’s territorial jurisdiction.
II. Section 77(a) Jurisdiction
The problem here presented concerns the conflict of jurisdiction between two federal courts each claiming jurisdiction to affect interests in certain property over which, under a literal reading of § 77(a), one federal court has “exclusive jurisdiction.” Although conflicting claims of jurisdiction under § 77(a) are not uncommon, the usual type of conflict is between a state court and a federal court, in which the state court’s action would in some way interfere with the *688federal court’s administration or actual reorganization of the debtor railroad. See Gardner v. New Jersey, 329 U.S. 565, 67 S.Ct. 467, 91 L.Ed. 504 (1947); Thompson v. Texas Mexican Ry., 328 U.S. 134, 66 S.Ct. 937, 90 L.Ed. 1132 (1946); Board of Dirs. of St. Francis Levee Dist. v. Kurn, 98 F.2d 394 (8th Cir. 1938). Cf. Palmer v. Massachusetts, 308 U.S. 79, 60 S.Ct. 34, 84 L.Ed. 93 (1939). Situations involving that type of conflict involve factors arising from the federal-state relationship that are not present in the instant case. See Callaway v. Benton, 336 U.S. 132, 69 S.Ct. 435, 93 L.Ed. 553 (1949); Meyer v. Fleming, 327 U.S. 161, 66 S.Ct. 382, 90 L.Ed. 595 (1946); Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876 (1940); In re New York, N. H. & H. R. R., 109 F.2d 136 (2d Cir. 1940). Cf. 28 U.S.C. § 1334 (1970).
The Congressional purpose behind the enactment of § 77 in general and the “exclusive jurisdiction” provision of § 77(a) in particular was to eliminate the need for ancillary receivership proceedings in federal courts in every state in which the railroad operated its lines. See Rodgers & Groom, Reorganization of Railroad Corporations Under Section 77 of the Bankruptcy Act, 33 Colum.L.Rev. 571 (1933); Craven & Fuller, The 1935 Amendments of the Railroad Bankruptcy Law, 49 Harv.L.Rev. 1254 (1936). The overlapping jurisdiction of numerous courts was not conducive to the speedy and efficient reorganization of a financially unsound railroad. See Fuller, The Background and Techniques of Equity and Bankruptcy Railroad Reorganizations — A Survey, 7 Law & Contemp. Probs. 377 (1940); Laughlin, The Extraterritorial Powers of Receivers, 45 Harv. L.Rev. 429 (1932); Morehouse, Receiverships, 7 Yale L.J. 299 (1898). By eliminating the need for ancillary receivership proceedings and providing for “exclusive jurisdiction” in one federal court with nationwide service of process, see § 77 (a); Continental Ill. Nat’l Bank & Trust Co. of Chicago v. Chicago, R. I. & Pac. Ry., 294 U.S. 648, 55 S.Ct. 595, 79 L.Ed. 1110 (1935), Congress intended to vest subject matter jurisdiction over the debtor railroad and its property in one federal court which would have absolute power over that property and over the administration of the railroad pending the submission of a reorganization plan by the Interstate Commerce Commission and approval of such a plan by the court. See Ecker v. Western Pac. RR., 318 U.S. 448, 466-474, 63 S.Ct. 692, 87 L.Ed. 892 (1943). Cf. Palmer v. Massachusetts, supra, 308 U.S. at 88-89 and n. 15, 60 S.Ct. 34.
The Supreme Court’s decision in Warren v. Palmer, 310 U.S. 132, 60 S.Ct. 865, 84 L.Ed. 1118 (1940) is determinative of this case. The Palmer case involved the conflict between two federal district courts sitting as reorganization courts pursuant to § 77(a), with each claiming subject matter jurisdiction over the same property. The Boston & Providence Railroad leased one of its lines to the Old Colony Railroad, and Old Colony then leased the line to the New York, New Haven and Hartford Railroad. The New Haven, experiencing financial difficulties, filed a petition for reorganization which was approved by the district court for the District of Connecticut. After various proceedings, the court ordered the New Haven trustees to reject the B & P lease pursuant to § 77(c) (6) and to operate the line for the account of B & P. Shortly thereafter the B & P filed a petition for reorganization which was approved by the district court for the District of Massachusetts. As the line operated by the New Haven trustees for the account of B & P was incurring losses, the New Haven trustees requested and the Connecticut district court granted a lien on the B & P property in the amount of the loss. The Supreme Court upheld the jurisdiction of the Connecticut court to declare a lien which would be binding on the Massachusetts district court. The Supreme Court said:
“The property of the Boston and Providence came into the possession of the trustees of the New Haven and the Old Colony and remained there *689during the entire time covered by the claim. These roads were lessees of the property and debtors under § 77 in the Connecticut court. It is immaterial what title the debtors had, whether a lease or a fee. The physical property covered by the lease was in the custody of the Connecticut court by virtue of the provisions of § 77(a) ....
. . . In view of the public importance of rail service, we think this subsection [§ 77(c) (6)] represents an intention to give the court charged with operation the fullest ability to secure the necessities of operation — • an intention to give the operating court power to promise those having the materials, men and equipment needed for operation a first lien on the road to secure payment for the operation.”
310 U.S. at 138-140, 60 S.Ct. at 867 (footnotes omitted; emphasis added). See also Thompson v. Magnolia Petroleum Co., supra, 309 U.S. at 481-482, 60 S.Ct. 628. The Supreme Court had earlier stated in Ex parte Baldwin, 291 U.S. 610, 615-616, 54 S.Ct. 551, 553, 78 L.Ed. 1020 (1934) :
“All property in the possession of a bankrupt of which he claims the ownership passes, upon the filing of a petition in bankruptcy, into the custody of the court in bankruptcy.... The jurisdiction in such cases is exclusive of the jurisdiction of other courts, although otherwise the controversy would be cognizable in them.
. But the exclusive jurisdiction acquired by the bankruptcy court through taking possession of the interurban railway under claim of title, was not limited to the prevention of interference with the use of the land .... The jurisdiction extends also to the adjudication of questions respecting the title.”
To accept appellees’ argument that the “exclusive jurisdiction” provision of § 77(a) in this context does not in fact mean “exclusive”
“would tend greatly to foment conflicts between coordinate courts and compel creditors, in the protection of their interests, to ride the circuit, demonstrating the basis of their positions in successive courts. Surely such a state of affairs would not constitute the intended improvement over the practice in equity receiverships, wherein the task of ascertaining charges and assessing liens had been consolidated . . . in the court of primary jurisdiction.”
In re New York, N. H. & H. R.R., 26 F. Supp. 18, 23 (D.Conn.), aff’d sub nom. Palmer v. Warren, 108 F.2d 164 (2d Cir. 1939), aff’d, 310 U.S. 132, 60 S.Ct. 865, 84 L.Ed. 1118 (1940), quoted with approval in New Haven Inclusion Cases, supra, 399 U.S. at 427, 90 S.Ct. 2054, 26 L.Ed.2d 69. See also New England Coal & Coke Co. v. Rutland R.R., 143 F.2d 179, 184 (2d Cir. 1944), quoted with approval in New Haven Inclusion Cases, supra, 399 U.S. at 426, 90 S.Ct. 2054. The position of the commentators is that, in a situation such as this, “exclusive jurisdiction” is given and should be given its literal meaning. See Mussman and Riesenfeld, Jurisdiction in Bankruptcy, 13 Law & Contemp. Probs. 88, 97-99 (1948); Rodgers & Groom, supra at 607-608 and n. 207; Weiner, Reorganization Under Section 77: A Comment, 33 Colum.L.Rev. 834, 846-848 (1933); 5 Collier, Bankruptcy § 77.11 (14th Ed. 1970).
We hold, therefore, that because Penn Central had legal title to and actual possession of the former assets of New Haven when its petition was approved; because Penn Central was, and the trustees are, using those assets and the income therefrom to operate its lines and the former lines of the New Haven; because the order of the Connecticut district court could, at this stage of the Penn Central reorganization proceedings, seriously impair the formulation of a workable plan for the financial resuscitation *690of Penn Central by the Commission and the ability of the Pennsylvania reorganization court to administer the entire Penn Central system, of which the New Haven line is but a division, see, e. g., § 77(o), 11 U.S.C. § 205(o) (1970), only the Pennsylvania reorganization court had subject matter jurisdiction under § 77(a) over the property here in question.
III. The Supreme Court’s Mandate in the New Haven Inclusion Cases
Appellees maintain that the Connecticut reorganization court had jurisdiction to declare the equitable lien and constructive trust, in order to provide that the New Haven would receive “reasonable assurance” of full payment for the assets transferred to Penn Central, under the terms of the mandate of the Supreme Court in the New Haven Inclusion Cases.
Penn Central’s petition for reorganization was approved eight days before the Supreme Court’s decision in New Haven Inclusion Cases. The Supreme Court said at the beginning of its' opinion:
“On June 21, 1970, the Penn Central Transportation Company filed a petition for reorganization ... in the United States District Court for the Eastern District of Pennsylvania. Whether the financial obligations dealt with in the present opinion may become subject to modification in or because of those proceedings is a question with which the present opinion in no way deals.”
New Haven Inclusion Cases, supra, at 399 n.+, 90 S.Ct. at 2061. The Court set aside the order of the Connecticut district court and remanded for “[f]urther proceedings before the Commission and the appropriate federal courts ... to determine the form that Penn Central’s consideration to New Haven should properly take and the status of the New Haven estate as a shareholder or creditor of Penn Central.” Id. at 489, 90 S.Ct. at 2108 (emphasis added).
In view of the language accompanying the remand, we do not interpret the mandate as conferring jurisdiction on the Connecticut reorganization court, particularly when as we have demonstrated, the interpretations of and policy underlying § 77(a) clearly require the opposite result.
IY. Retention of Jurisdiction and In Personam Jurisdiction
Appellees would have us hold that the Connecticut district court, in its order transferring the New Haven’s assets to Penn Central and ordering inclusion, retained “jurisdiction to act on any question respecting claims between the two railroads.” However the order cannot be properly interpreted as either encompassing this type of equitable action or, indeed, any action based on events occurring subsequent to the transfer order. See Towers Hotel Corp. v. Lafayette Nat’l Bank, 148 F.2d 145 (2d Cir. 1945).
Even assuming that the reservation of jurisdiction could be construed as encompassing the type of action involved here, once the property came within the “exclusive jurisdiction” of the Pennsylvania reorganization court by virtue of that court’s approval of Penn Central’s petition for reorganization, the policy of § 77(a) would prevent acceptance of appellees’ contention. Due consideration of the congressional purpose in granting “exclusive jurisdiction” over the debtor’s property to the reorganization court, would preclude permitting another district court to exercise jurisdiction on the ground that such jurisdiction was reserved in a related proceeding when the effect of the exercise of retained jurisdiction would be to hinder the ability of the reorganization court to administer the property of the railroad pending reorganization. Thus, even if the Connecticut reorganization court’s order were construed to include the reservation of jurisdiction to declare an equitable lien and a constructive trust, the subsequent approval of Penn Central’s petition by the Pennsylvania reorganization court served to oust the Connecticut court’s jurisdiction and to vest “exclusive jurisdiction” in the Pennsylvania court.
*691Appellees’ final contention, that the Connecticut reorganization court had jurisdiction to declare the lien and constructive because it had in personam jurisdiction over the Penn Central trustees, is without merit. Even if the Connecticut court had in personam jurisdiction, it lacked subject matter jurisdiction; the Pennsylvania reorganization court had “exclusive jurisdiction” over the subject matter — the former property of New Haven — and only that court was competent to take action with respect to that property.
Y. Remand
This case must be remanded to the Commission so that a reorganization plan, fair and equitable to all parties, can be formulated. One of the main reasons for the enactment of § 77 was to establish a reorganization procedure in which an expert agency would examine the technical and financial problems of the railroad and propose a reorganization plan to the reorganization court for approval. As both the Penn Central and the New Haven are in reorganization, at least nominally, before courts in different circuits, the Commission is the common denominator between those courts so far as the formulation of a single plan, or two interrelated plans, is concerned. Whatever protection the New Haven estate must receive in terms of some senior position in the Penn Central proceeding must first be proposed by the Commission in the context of a reorganization plan for the Penn Central which, it is to be hoped, will advance the public interest by successfully establishing a financially viable Penn Central. The Commission has stated that, if the proceeding is remanded to it, it will consolidate the Penn Central reorganization and New Haven inclusion proceedings so as to consider the terms of the New Haven inclusion as “a portion of the reorganization of Penn Central . ” This procedure is, we believe, the proper method by which the interests of all parties — the New Haven estate, Penn Central and its creditors, and the public — can best be advanced.
We do not imply by this remand that we disagree either with the fairness of Judge Anderson's order or with his conclusion that the Supreme Court’s opinion in New Haven Inclusion Cases requires that the New Haven estate receive $174.6 million as compensation for the taking of its property. We hold only that the Connecticut reorganization court is not the proper body to grant whatever protection is required because it has no jurisdiction, and we remand the case to the Interstate Commerce Commission with directions to consider, in light of the Penn Central reorganization, the form of consideration the New Haven estate should receive.
Reversed and remanded to the Interstate Commerce Commission.