jeffhergertAt least you can't say they weren't optimistic about the future of their company.
They rebuilt the Southwestern Line West of Sturtevant and went to heavy rail and steel bridges because they thought opening of the St Larence Seaway was going to be a boom to Great Lakes traffic at the Eastern ports in Wisconsin, especially the port of Milwaukee..........that turned out to be a waste as well.
Much is made that the MILW's first bankruptcy in the 1920s was because of the PCE construction and the electrification, especially the later Coast Division project. I think people overlook the MILW was spending money on other parts of the system in the 1910 era. They straightened out and double tracked most of the Iowa Division in anticipation of getting more traffic from the UP at Council Bluffs. This never materialized and by the 1930s they started single tracking the line. A process that continued into the 1970s.
At least you can't say they weren't optimistic about the future of their company.
Jeff
I heard they planned the Pacific Coast Extension thinking the Panama Canal was not happening, but then by the time they completed the line, the Canal was actuall going to be built.
C&NW + Milw almost happened a couple of times and fell apart at the last minute. Personally I'm not in favour of consoldation type mergers rather preferring end to end mergers.
Speculation of course but Milw + Rock Island + NYC. Now you have one heck of a railroad, investors might like the long haul and money pours in to fix and rationalize. SP connections NW and SW...excellent.
Possibilty electrify the CASO. Wow. Maybe the whole route eventually Chicago- Buffalo via Canada Southern. Then the whole thing itself.
Dream on. It's fun to think about things like that but from an investors view and todays operations it would have been ahead of it's time.
MiningmanWonder at which point it started to go to pieces
In my view the cast was set with the cost overruns of the Pacific Coast Extension. The Milwaukee took the cheap way out in a lot of cases to get the line built but the biggest thing that hurt them was the cost and the overall debt this placed on the books. Because the PCE was built so late in the game most of the land was not land grant but was purchased private land driving up costs but the overall cost of construction that went to debt on the books (going off the top of my head here so probably not an exact figure): $250-300 million which was an astronomical sum back in the early 1900's. I believe the original cost estimate of the PCE was 10-20% of that amount.
Right here we get to the crux of the matter. What is the Bankruptcy Trustees role.....is it to attempt to ensure survivability of the business, in which case most if not all the PCE debt should have been marked down to zero OR is it an attempt to get the most for the creditors of the railroad, protecting them as much as possible. My guess is the role is somewhere in between. So the PCE debt I don't think was marked down all that much until the final 1977 bankruptcy. Was management to blame for that or the bankruptcy trustee? Not sure but management should have at lease pushed hard to get as much of that debt discharged as they could making the arguement about cost overruns. However, for whatever reason they never made that case to the first bankrupcy trustee after the PCE was built.
Now had they signed a lot of traffic to carry over the new route that expense would have faded to the background but there wasn't any real large source of traffic to carry from Washington State to the Midwest and back and there were two other railroads it was competing against for the minimal traffic. Four if you include CP and CN. Traffice on the PCE really did not start to build to any serious level until well after WWII and then only very slowly. They probably had a short blip with WWII traffic. I think after the BN Consolidation they could have made a comeback had they not screwed themselves so badly with deferred maintainence in the 60's and had they streamlined more to a core system from their extensive branch lines in the Midwest. I think 1965 to 1975 is when the decline really became apparent with the latter years being more apparent. It seemed to me the railroad tried it's best to recover from 1975 to the 1977 bankruptcy filing but they ran out of cash and credit lines.
Personal Observation living next to the mainline in Brookfield, WI.
1974 onwards you could see a definite capital spending program. 4R loan to rehab the Twin Cities mainline evident in 1975-76 raised speeds significantly and removed a lot of slow orders. Large order of new Locomotives MP15AC's started to show up in 1975 replacing rebuilt generation 1 power. New Yellow 70-80 ton boxcars along with new yellow Covered Hoppers both with the "America's Resourceful Railroad" logo........interestingly neither built at Milwaukee shops but instead purchased from RR Car manufacturers. It was clear post 1973 the railroad management had a come to Jesus moment and was attempting to catch up with deferred investment as fast as possible. So they had a capital spending bounceback right before they declared bankruptcy but it wasn't enough.
A big issue post 1973 is they were not shedding enough loss-leading lines but looking back at the market conditions then........none of the other railroads were really in a balance sheet position to buy up ex-Milwaukee lines and back then shortlines were unheard of as well as state investment in rail lines. Most Midwestern states had it written into their constitutions they could not spend money on railroads (holdover from the robber barron days). I know Wisconsin had to amend it's Constitution and I think South Dakota did too after 1977.
Little mentioned in the bankruptcy filing or story was they probably could have made it through 1977 except for the really bad winter took a heavy toll in snow removal costs (especially prairie line network they had not abandoned/sold). Their band aided locomotive management system collapsed completely during the severe winter and they had to lease lots of units from the Southern Railway, Chessie System, Southern Pacific, those three were heavily predominant then. Then began to see BN Pool Power on the line. The lease payments on the locos and the snow removal costs sucked up what little cash they still had in reserve.
I am not sure how much the Milwaukee would have lasted after 1977 had it not been for the winter, they were financially weak before the winter. They might have lasted another year, maybe two but would it have mattered?
Also, in my view they should have forcibly merged C&NW and Milwaukee together, it made the most sense via consolidation of duplicative routes and consolidation of branch lines. Soo Line was doing fine financially where it was.
Interesting scenes. The Milwaukee sure looked prosperous in the steam days...plenty of blocks of cars and whole trains on numerous tracks.
Wonder at which point it started to go to pieces...'57? mid 60's?..by the mid 70's it was in obvious serious decline yet new markets arrive but zero cash. Dumb move cutting the electrification, great timing too...just as copper prices plunge and the oil crisis starts. Too many shenanigans going on at head office. Maybe took their cues from the crooks at Penn Central. CMSt.P&P should still be with us today.
Nice memories in the film though...turn the sound off.
Milwaukee gets this Canucks vote for All American Railroad winner.
They had it all...big city, prairie grainger, intercity high speed, commuter, northern resources, west coast, mountains, transcontinental, fierce indedependence, loyal employees, their own very special look.
Saw plenty of whats been left behind this summer of the Milwaukee as I traveled the US West..imagined and envisioned. The essence still lingers and can be felt, but it is, unbelievably, gone.
Ha! found another video. Some decent shots every now and then but not a lot.
https://www.youtube.com/watch?v=202Gheoau90
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