The dealing of the Libby Committee with this situation was intelligent and comprehensive. It proposed an increase and simplification of securities, a decrease in fixed charges, and a cancellation of the floating debt. In place of the forty-one classes of bonds outstanding it suggested that two grand issues be put forth, one of 4 per cent general mortgage bonds to the amount of $150,000,000, and one of 5 per cent income bonds to a total of $80,000,000. From these issues $13,750,000 should be used to provide for cash requirements,[420] and the remainder should be employed in direct retirement of old obligations. The exchange of some $216,000,000 of new bonds for $163,000,000 of old was to mean an increase in securities outstanding, but since interest on only part of the new bonds was to be obligatory fixed charges were to be less than they had been before. The managers figured on what the property could earn, good times or bad, and capitalized this sum into 4 per cent general mortgage bonds. They then calculated the difference between this and the former return to bondholders, and capitalized the difference into income bonds.[421] Each individual bondholder, therefore, was offered a chance to receive the same return which he had previously enjoyed, although his right to demand an annual payment was limited to an amount which the road could earn. A few points deserve to be specially noticed. The reduction in interest was sufficient to have transformed the deficit for the whole Atchison system for 1888 into a respectable surplus, providing that no dividends had been paid; but this reduction was dependent on the retention of the income bonds as optional obligations. There was no cash assessment. Had the reorganization taken place in a time of general depression, the sale of securities for cash would probably have been impossible, but the days of depression had not yet arrived. The stockholder suffered in the introduction of the principal of some $67,000,000 additional indebtedness between him and his property, although he was not called upon directly; but it should not be forgotten that for a long while the Atchison stockholders had received very liberal dividends, both in stock and in cash, and could not well complain of the moderate loss now necessary. There was no voting trust, although one was proposed, and the bonds were not even temporarily given voting power. The situation seems to have been that the securityholders thought it more to their advantage to reduce voluntarily the rate of interest than to force a foreclosure sale and take their chances; for the directors, in submitting the plan, said that they felt it necessary “to state in the strongest terms that the non-success of this proposal will inevitably result in foreclosure, with all its attendant misfortunes.”[422]