_Per cent Decrease_ _Per cent Increase_ _A_ _I_ _M_ _A_ _I_ _M_ Atchison 31.1 26.7 29.2 B. & O. 11.7 12.1 9.6 Erie 5.9 16.4 7.0 N. Pac. 51.0 53.0 43.0 Reading 20.8 26.2 32.9 Southern 44.0 22.4 37.7 U. Pac. 43.6 61.5 57.5 ---- ---- ---- 30.9 31.2 31.2 _Seven Reorganizations before 1893_ Atchison, ’89 34.9 33.6 Atchison, ’92 31.0 28.5 31.1 E. Tenn. ’86 33.0 40.8 31.3 Erie, ’75 2.9 11.0 12.7 Reading, ’80 15.3 20.2 49.1 Reading, ’83 7.9 2.2 17.9 Rk. I. ’80 16.3 22.7 20.6 ---- ---- ---- ----- ---- ---- 10.3 13.1 .53 _One Reorganization, 1902_ Rk. I. ’02 119.3 48.2 17.6[713] These tables show plainly that substantial reduction in fixed charges was the rule in the reorganizations of 1893–8, though less universal and less important in the reorganizations before that date. Even before 1893, however, the fact that reductions must be made was apparent. Three reorganizations increased absolute charges instead of decreasing them. Of these the Atchison reorganization of 1892 was not due to lack of prosperity, and the Erie reorganization was a failure. The Reading reorganization of 1880 increased absolute charges, increased mileage more than correspondingly, but was also a failure. And it is significant that only those roads which generously reduced charges regained even a temporary prosperity. The distribution of losses which a reduction in fixed charges requires can best be made by a comprehensive redistribution of securities. All the bonds and stocks which are to suffer must be called in; and varying amounts of new securities must be given in their place. Among the important considerations to those who fix the rates for exchanges are these: (1) Maximum charges under the new régime should approximate minimum net earnings under the old. (2) As large a proportion of the charges as possible should consist of the one item of interest on bonds. (3) Losses should fall most heavily on the junior securityholders. (4) The nominal value of outstanding securities should be reduced as little as possible. (5) Bondholders whose claims have been cut down should be afforded some chance to participate in future increased earnings of the property.