Hi Bobbie,
Trees often take a long time to show signs of stress or disease that are serious enough for us to notice. It sounds like your tree has been ill for quite a while, and may have been in that state when you purchased it. Many plants, especially trees, usually come with a one year guarantee. I'm sorry to say that no amount of compost or manure is going to make your tree well, as once decline has gone this far you are probably fighting a loosing battle. Take a look here and click on 'Shade Trees' on the left and then on 'Whole Tree'.
http://www.agnr.umd.edu/users/hgic/diagn/
Another possiblility is magnolia borer.
The magnolia borer infests container and field grown magnolia. The larvae mine the roots and destroy the phloem tissue. The eggs are laid on the tree and the larvae move into the media to find a root. As they feed they move toward the root collar. At maturity they can be found feeding in the zone of the trunk about 2 inches from the media. The bark will appear spongy to the touch and frass may be observed in the area. Two to three generations occur per year.
http://woodypest.ifas.ufl.edu/boring.htm
Newt
When weeding, the best way to make sure you are removing a weed and not a valuable plant is to pull on it. If it comes out of the ground easily, it is a valuable plant.