The morning call., 1893-12-26
TROUBLES OF THE SANTA FE.
. Papers Were Drawn Before the
Death of Magoun.
FAILURE TO SECURE NEW LOANS
The Affairs of the System, the Off
Gals Say, Will Soon Be
Strengthened Out.

TOPEKA. Kans,, Dec. 25.-George F.
Sharitt, Clerk of the United States Circuit
Court, has returned from Little Rock,
Ark, with the papers in the Santa Fe re-
ownership case. The bill of the Union
Trust Company was sworn to before a
New York notary December 81. This VIZ
tually puts aside the impression that the
death of George c. Magoun, chairman of
the Santa Fe executive board, precip-
tated the receivership, for the papers
drawn were sworn to before Magoun died.
1t is stated in the bill that the Santa Fe
had been dangerously near insolvency for
a year, and that for some months re-
ownership had been known to be only a
question of brief time. The company
was SO hard pressed for money, the bill re-
cites, that on August last its president
went to the Office of the Union Trust
Company in New York and borrowed
100000 at per cent to meet the imme-
diate demands of the company. 1t is
stated since that time, owing to the period
of fin ancial depression, that 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 1t paid the interest on it. 1t is set
forth in the bill that in December, 1898,
the company will have to pay 81. 100, 900 ill.,
terest on first mortgage bonds, and that in
January, 1894, it will have TO pay S450, GOO,
and between February and June, 1894,
there will become due floating debts to the
sum OF S9,700,000, the entire floating debt
of the company being now So, $4,000 and
interest On the guaranty fund notes for
100000 will be due in May, 1894, and
this interest will aggregate S270 600. These
fund notes have been twice renewed, and
besides there are other debts of the COM
pany due or soon to fall due aggregatng
some 81 100000.
The petition sets forth the company is
totally insolvent: that, with all this debt
staring il in the face, it has not enough
money to pay the laborers along its line,
and that inasmuch as its creditors are be-
coming impatient it is question of but a
few weeks until suits may be brought that
will disintegrate and ruin the system
therefore, in consideration of all these nu-
merous allegations, receiver or receivers
were asked for the property.
Accompanying this Dill was the answer
of the Santa Fe Company. George A.
Peck. general solicitor of the company, an
swering the charges, confessed all the
statements true; that the company was
wholly insolvent; that creditors were
growing impatient and were liable at az v
time to close in on the company. j. "
RheinhaTt, President of the company, ard
Peck made this confession in New York
and swore to it before a notary on Decem-
Der 20, the day before the bill asking ;or
receivers was sworn TO. This goes to show
tbs receivership was brought about by the
Santa Fe Company itself, because it de-
sired to give up the fight and get under the
protecting wing of the court.
The receivership of the Santa Fe was
not brought about 80 much by the prob
able default in money interest payments
as By the company's utter disability to
meet the floating debt. The Earrings did
not bring about the collapse. Magoun's
death did not cause it or even hasten II.
The company was hopelessly in debt.
and Rheinhart went all the way to London
few days ago to get few million dollars
MOTTO pay interest, as every one supposed.
but to pay the.floating debt. Rheinhart re-
manned in London a week. He could not
get q cent and when he reached New
York on his return his first official act was
to order the preparation of receivership
papers. 1t now develops that certain peo-
pie in Topeka have known since August
the Santa Fe could last but few months.
The officers of the United States Court
were on the outlook for the papers almost
daily. and when it was announced that
Rheinhart had failed to get the money in
London ten days ago the receivership was
a foregone conclusion.