, 1874-12-27
History Of the Causes Which lied
to the Smash-Up.
It Was Mainly Due to the Troubles
of 0. A. Gage.
How Mr. Tracy Evaded Allen, Mackey
& Co.'s Injunction.


-
John 3. D.ake is now in CHARGE as asserted, il
tho Interest OF John T. Tracy. The sale too:
p1ace in the Office Of tho Rock Island Railroad
Company IN tho afternoon. and the price ia sai<
to hare been sr20,000. Who the purchaser wa:
is not definitely known, but, in view OF tho fac
that III. Drake offered Messrs. Gage Eros. /
Dico S25 COO for their equities (Which was &C
ceptedl, it is supposed that the furniture wae
bought for him. At all events, he is probably tc
DO the future proprietor OF the hotel, and vii
retain Nr. Rice as his assistant. For the pur-
pcse Of an inteliicib1e understanding of the en-
barraesmept Of Gage Bros. and l.ice,
BRIEF HISTORY OF THE HOTEL
is herewith given, based on information fur
uished by Henry IT. Smith, Secretary OF the
Company.
The Grand Pacific, in the drst instance, was
built with 57Uo,000 of subscribed stock. and
SEX, 600 Of f7at-mortEago bonds, $125 900 Of
the former being held by the Michigan Southern
railroad Company, 21o5.000 by tho Rock Island
i, Pacific, @10O, coo ny John T. Tracy, $4,000
BIZ William B. Osleu- and the rost by local bus-
ness men and capitalists. Tho bonds were di-
vidcd equally between the railroad companies.
Tie hotel was destroyed in tho fire OF 1871, the
ruins and debris being valued at 100000. As
coon as it was decided to rebuild, 100000
Of second-mortgaee bonds we're sold ut 60
cents yielding 5360.009; thus increasing the
bonded debt to $3.50, 600; all of which, with the
exception of small amount, WEB held By the
two corporations. Gage Bros l. Rice, at that
time prop1ietors Of tho Sherman House, were to
have signed the lease in Ney York Oct. II, 1871,
two days after tho fire. but did not on account Of
it. They. however, took IN active part in the
resurrection, Mr.. Rice devotinS his whole time
to looking after the construction. I: the time
they signed tho lease in sho spring Of 1872
ME-. GEORGE W GAGE
remarked to Mr.. II. II. Smith: 81 do not know
why have s;gued that lease. beleva ! nm
making q fool OF myself. I .am worth
moro than I ever expected to be in my
LIE. have 3 large family. and have
reached that time in life when ought to
Ec out Of active business, and. besides, my
health is poor, and no earthly reason would IN
duce me to enter into the Pacific Hotel except
for my brother David. He wants me to go in;
/ have always stood by him, and always will
A.. that time David 4. Gage enjoyed the conf
ccnce OF every ono to degree shared by no
lis renuted wealth was between SG00,0 00O and
600, coo, and Mr.. Rice, the active manager of
tac Sherman House, w.s thought to be in a. COM
turtable u circumstances. It WAS at first
STIPULATED II THE LESsEEs
that they should furnish at least one-third Of
the outfit of the house the estimated value OF
Il nbrh was S3o0.CG0; the hotel company WAS to
su:plv tho c.rpcts. This. however, IVES aubse-
quently changed, aud, under the lease as finally
ti,nad, Gage Brothers d. Rice wero to furnish
the house throughout Tho rent for the first year
was to hea ,u!ning for the second. S25000 the
third, sAa000 !; tho fourth, S35,000: and the
fifth, $4,000. Tho hotel was orened for the
reception OF guests III June. 1876, and as is
claimed.
WAS SUCCESSFUL FROM THE START;
not dollar las been lost on any days business.
Tho receipts last year were large, aud among
the most prominent bankers and NOR
chants OF the city The business done
il indicated by recent announcement Ct the
proprie.ors that they could not assign twenty
moro boarders to rooms without interfering with
transient guests.
THE FAILURE OF THE ENTERPRISE
is due solely to tho trouble Of David 4. Gage.
That developed the hollowncss Of his financial
condition, and showed him to be bankrupt,
PUT into the hotel was returned to him, lest
George ". Gage and Mr Rice in an en-
bar1assed condition; their capital was. shat
tered b. the loss Of the 100000 they |
expected from David 4. Gage. and their credit |
was impaired On account of their being among |
Lis boutslmcn. One Of them vent to Now York |
Immediately after the discovery Of the deficit,
aud
Mr. TRACY
advanced a50.o00 to be paid On demand, taking |
ns security chattel mortgage on tho furnirure. |
Subsequently second mortgage, for nearly the |
same amount, vas executed to parties in Chica-
70. This Inst one, not yet due, is secured by |
stock loaned By the Michigan Southern |
Rallroad Company 1t is lie foreclosure |
Of thesa fvo rnortcarca which boa
brought about the present condition of affairs.
md, as stated above. the furniture was sold yes.
terday morning, despite tho injunction issued st
the instiration of Allen. Mackev r r. fha c,-H
pet-dealers. 1t is said that
THE 1S5USc.rox WAS AVOIDED
by transferring the mortgages to some one elsa
M1, Tracy being tho ono prohibited by tl,n in.
junction from selling.
The impression prevails that it is the intention
Of the parties controlling tho bonds to ret ros-
session OF the hotel ana the furnitnrno w},,cb
are Worth 81 500 oao at their nw1, nr;cs "uL, l,,i
this is MT raneraiIy helieved oxTine r. the 49,
sence Of deGnito in5ormation son.Ea;n, ta ~ ~
side % workings Of tie scheme. e' <'S'@SD's |D' Ill
Of t,,e Hote, comnanT sSiofn he't y Ineet;no roz.o
- - tno Ao'e. Se.I3,Ans oelo u neetlne Yesterday
~ n~st "nu, tnn, ~ clock,
,,aro1;, t;o.a ooa so1-.s5;. -" eastoua. lne