The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-12-26
Death of Chairman Magoun Had Nothing
to Do with the Hurried Appoint
ment of Receivers.
INSOLVENT NEARLY A YEAR
Not Enough Money to Even Pay
the COmpany's Day LabOrers.
Reinhart's Hopes Blasted by Visit to
LondOn-TwO Special Masters Ap-
pOinted-Mr. RObinsOH's Duties.

TOPEKA. Kan. Dec. 25.-George F.
Sharritt. clerk of the United States Cir
cult Court, returned at IL O'clock last
night from Little Rock, Ark, with the
papers in the Santa Fe receivership case.
The bill of the Union Trust Company was
sworn to before New York notary Dec.
q. This fact effectually puts aside the
impression that the death of George G.
Magoun, chairman of the Santa Fe board,
precipitated the receivership, for the pa
peTS were drawn and sworn to before Mr..
Magoun died. 1t Is stated in the bill that
the Santa Fe has been dangerously
Insolvency for nearly year. and that for
some months n receivership has been
known to be only a question of a brief
time. The company was so hard pressed
for money. the bill recited, that on Aug.
last its president went to the Office of the
Union Trust Company, in New York, and
Borrowed $4,000 at z per cent. to meet the
immediate demands of the company. 1t is
stated that since that time, owing to the
period Of financial depression, the Santa
Fe has been continually embarrassed for
money. The company has not repaid to
the Union Trust Company the short-time
loan negotiated in August, nor has it paid
the interest on 1t. 1t is set forth in the
will have to pay 100000 as interest on
Its first mortgage. and that in January,
1884. it will have to pay $4,000. and be-
tween February and June, 1894, there will
become due and payable floating debts of
the company to the sum of $4,000, the
entire floating debt of the company being
now S,92O.00O The interest on the guar
anty fund notes for 100000 will be due
In May, 1884. and this interest will aggre-
gate $4,000. These notes have been twice
renewed, and, besides, there are other
debts due or soon to fall due aggregating
some two million dollars. The petition
sets forth that the company is totally and
absolutely insolvent; that with all this
debt staring it in the face it has not enough
money to pay the day laborers along its
line and that, inasmuch as it's creditors
are becoming impatient, II is a question of
but few weeks until suits may be brought
that will disintegrate and ruin the system
and therefore, in consideration of all these
numerous allegations. a receiver or re-
companying this bill was the answer Of the
santa Fe company George Il. Peck, the
general solicitor of the company, in an
swer1ng the charges, confessed that all
the statements were true; that the Santa
Fe was wholly insOlvent and unable to
pay It's debts; that the creditors were
growing impatient and were liable at any
time to close upon the company. j. W.
Reinhart, president of the company. and
York, and swore to il before a notary
Dec. 20. the day before the bill asking re-
that the receivership was brought about
by the Santa Fe company itself, because ii
desired to give up the fight and get under
the protecting wing of the court
NOT CAUSED BY MAGOUN'S DEATH.
The receivership of the santa Fe
hrC, al 1 10 l0
default in money interest payments as it
was by the company's utter inability to
meet its floating debt The l rings did not
bring about the collapse. Mr.. Magoun's
death did not cause il or even hasten it.
The company was hopeleSsly in debt and
Mr. Reinhart went all the way to London
a few days ago to get few million dollars,
not to pay the interest, as every one sup
posed, but to pay the floating debt. Mr..
Reinhart remained in LONDON a week He
could not get cent, and when he reached
New York city on his return his first Of
fetal act to order the preparation OF
the recelvership papers. 1t now develops
that certain people In Topeka have known
since August that the Santa Fe could last
but few months. The officers of the
United States Court were the lookout
for the papers almost daily, and when il
was announced that MIR. Reinhart had
failed to get money in London, ten days
ago. the receivership was a foregone con-
clusion.
Treasurer Edward Wilder said to-day:
while Ii Is sometimes considered I'M
fortunate for a road to go into the hands
of a receiver. 1t is not infrequently and
cause 1t will enable the management to
handle the property and financial burden
without the natural embarraSsments that
preston. shrinkage of values and
dullness in business. The earn
lngs of the Santa Fe system have been
very satisfactory and. under ordinary cir
c1mStanceS, the floating debt could have
been cared for without any trouble or in
difficulty there has been during the last
summer and fall in raising money on any
collateral or security.
1.-The receiverShip in this case does not
seem To me to Indicate anything but a
reasonable period of protection until the
can be counted on during the coming year,
shall permit Il return of the company'S
affairs to be managed by officers elected
by the stockholders. We certainly need Z.
feel no uneasiness. except that the bona
holders will have To wait q little while for
their interest, but 1 do not believe that
IL will be unreasonably DELAYED because
our securities are ample If the condition
of the business and OF the financial world
was normal"
General Manager Frey. of the Santa Fe.
when seen yesterday. said he did not feel
at all alan med at the fact of the receiver
ship, but talked hopefully of the future of
.he road. He said: The appointment of
the rec ivers was Il surprise To me, and
while ] do not want To anticipate the gem
eral policy that will be pursued By the re-
ceivers. yet l viii say that at the end of
the receivership the Santa Fe road will be
in the best condition OF any road i'm the
world. The road at present is i'm a better
physical condition than il has been for ten
years, and its condition, in my opinion
will improve The business of the Santa
Re has Increased much faster than it's facl-
titles. and in my Judgment the receivers
will add 10 these facilities. AS far as the
effect OF the receiVershp goes, IL will not
be felt by the public; in fact. the people
will not know that the road is MANAGED
any differently than il has been in the past
1t will give to the patrons all the facilities
that have heretofore been given them, and
IN my opinion better service. The business
OF the road, while IL has not been as good
as last year is gradually getting back to