Democratic Sentinel, Volume 18, Number 5, Rensselaer, Jasper County, 16 February 1894 — The Santa Fe Failure. [ARTICLE]

The Santa Fe Failure.

Such an event as the failure of the Atchison, Topeka, and Santa Fe Railway Company, occurring in former times would have precipitated a panic in the midst of prosperity, or would have increased vastly the terrors of an existing panic. The failure of Jay Cooke and the half-flnish-ed Northern Pacific Pailway in 1873 created the panic of that year. The interests involved in that catastro phe were not one-tenth as extensive or important as those of the Santa Fe. Yet this occurrence did not affect the money or stock market to the extent of one-half of one per cent, on the total volume of business. The loss on securities fell so lightly and were so widely distributed that the result amounted to but little more than a ripple along the shores of the business world. The disaster to the Santa Fe is the result of nothing but misdirected enterprise and errors in management. In 1881 the stock of the Santa Fe sold at 1541. From 1886 to 1888 the stock was but a point or two below par. The plan or extension then began. The line to Chicago was built and the immense terminal property on State street was acquired. The Chicago extension never paid, but caused loss of business to the main line. The business of the main line, which had been divided at the Missouri River among several roads, kept them all in a friendly spirit and the Santa Fe received their combined transcontinental traffic. When it built a rival line to Chicago it lost all the Chicago and eastern traffic of other lines. Practically the same result followed the acquisition of all its extensions and subsidiary lines. Each step of enterprise excited the hostility of rival lines whose territory was invaded. The main line lost traffic and the branches did not do a self-supporting business. Every attempt to conquer other worlds impaired the value of its own world as a source of profit. In the bankruptcy of such great roads as the Northern Pacific, the Union Pacific, the Erie, the Santa Fe and other systems profound, lessons are to be learned in the science of railroad management, and especially in the morals of railroad financiering. With good business principles and honesty as a basis of management every one of these railroads should be solvent and paying good dividends on its stock.