both companies, including the stock and bonds of the Railway Company. Meanwhile the Philadelphia & Reading Railway Company had been organized to succeed to the property and franchises of the old Philadelphia & Reading Railroad Company,[279] with a capital stock of $20,000,000 in $50 shares. The charter of the Coal & Iron Company was preserved in spite of the foreclosure sale.[280] The next step was for the Reading Company to exchange its bonds and stock for the general mortgage bonds and stock of the two minor companies in the proportions already agreed upon, and to deposit the securities so obtained in its treasury; leaving the prior liens the only direct obligations of either company in the hands of the public. This meant, of course, absolute control of both companies by the Reading Company; and in the future, when the prior liens should mature, it was to mean the replacement of all outstanding obligations by the obligations of the holding company. Both the Railway and the Coal & Iron Companies retained their separate organizations; the belief was that there was no merger which might be attacked before the courts; that it only happened that one corporate individual had invested in both Railroad and Coal Company shares and proposed to vote this stock, as was lawful, to further the policies of which it approved.[281] Representatives of the reorganization managers laid an elaborate defence of the legality of these operations before Attorney-General McCormick of Pennsylvania, and on January 2 secured an opinion confirming the validity of the charter of the Reading Company. “After due consideration,” said Mr. McCormick, “I reach the conclusion, most reluctantly, that the Commonwealth of Pennsylvania cannot now successfully attack the chartered rights of the Reading Company.... My view of the whole matter is that the charter of the company authorized it to do the kind of business in which it engaged prior to January 1, 1874, which business was of the same general character as that in which it proposes to engage for the purpose of controlling the stocks of the Railway Company and the Coal & Iron Company.”[282]