If at any time dividends of 4 per cent should have been paid on the first preferred stock for two successive years the company might convert the second preferred stock at par, one-half into first preferred and one-half into common stock. These new issues were ultimately to retire all outstanding securities, to provide for expenses of reorganization, and to go for new construction, additions, betterments, etc., in the succeeding years. Since, however, it was obviously impossible to cancel prior liens before maturity, sufficient general mortgage bonds ($44,550,000) were reserved from immediate issue to retire these when they should fall due. This left new general mortgage bonds with four classes of stock against old general mortgage bonds with three classes of preferred bonds, common stock, and deferred incomes; and, as might be expected, new general mortgage 4s were given for the old general mortgage, second preferred and common stock went for preference bonds, and new common stock for old common stock and deferred income bonds. Certain cash payments were made on the general mortgage, and $4,000,000 of the new issue were sold to a syndicate; but on the whole we may say that the prior liens and general mortgage bondholders occupied the same position in the new company which they had occupied in the old; that the income bondholders exchanged a bond with a lien on income for a stock with a right to dividends; and that the floating debt, syndicate, and other expenses were given equal rights with the general mortgage. No additional mortgage was to be put upon the property, nor was the amount of the first preferred stock to be increased, except with the consent, in each instance, of the holders of a majority of the whole amount of each class of preferred stock, given at a meeting of the stockholders called for that purpose, and with the consent of the holders of a majority of such part of the common stock as should be represented at such meeting, the holders of each class of stock voting separately; neither was the amount of the second preferred stock to be increased, except in a similar way. These careful clauses made some provision for future capital requirements necessary which should be independent of the consent of the stockholders at any time; and $20,000,000 general mortgage bonds were accordingly set aside, to be issued in amounts not greater than $1,500,000 in any one year for future construction, equipment, and the like. Additional general mortgage bonds were provided to retire Philadelphia & Reading Terminal and Coal & Iron Company bonds up to the sum of $21,000,000.