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Was there a law that said that American railroads had to be domestcally controlled?

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Was there a law that said that American railroads had to be domestcally controlled?
Posted by ronrunner on Tuesday, July 13, 2021 10:16 AM

Hence Grand Trunk..DWP..D&H had to have US Charters and management on paper..as I also recall GT had a division in Maine

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Posted by CSSHEGEWISCH on Tuesday, July 13, 2021 10:22 AM

They may be incorporated under the laws of one of the states but I would hardly consider them to be domestically owned.  It works in the other direction, too.  The BNSF line to Winnipeg was operated by a wholly-owned subsidiary incorporated under Canadian law.  

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Posted by tree68 on Tuesday, July 13, 2021 10:30 AM

Some states required railroads to be "located" in their state - Texas as a case in point.

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Posted by diningcar on Tuesday, July 13, 2021 11:04 AM

As I remember it Texas required all RR's in Texas to have a Texas identification in their corporate name; but they could be controlled elsewhere like Santa Fe located in Chicago controlled the North Texas and Santa Fe or the Gulf, Colorado and Santa Fe.

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Posted by Juniata Man on Tuesday, July 13, 2021 11:51 AM

Canada at one time had a requirement that companies up there be controlled by a Canadian entity. That's one of the reasons GATX had GATX Rail Canada or UTLX had Procor. 

This requirement was, to my knowledge,  eliminated some time back although many companies retain the seperate corporate structure for internal purposes.

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Posted by OWTX on Tuesday, July 13, 2021 11:59 AM

Article X of the 1876 Texas constitution was railroad specific:

SEC. 3. Every railroad or other corporation, organized or doing business in this State under the laws or authority thereof, shall have and maintain a public office or place in this State for the transaction of business...

SEC. 6. No railroad company organized under the laws of this State shall consolidate by private or judicial sale or otherwise with any railroad company organized under the laws of any other State or of the United States.


The ICC and the US Supreme gutted a good portion of it, and the state repealed everything but Sec 2 (common carriers) in 1969.

 

 

 

 

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Posted by SD70Dude on Tuesday, July 13, 2021 5:25 PM

All of CN's American operations are still legally owned by the Grand Trunk Corporation, which of course is a wholly owned subsidiary of CN.  No separate paint schemes anymore, though the GTW and DWC reporting marks remain in use on a lot of freight equipment, along with those of all the other American railroads CN has acquired over the last 25 years.

I believe CP has a similar arrangement using Soo Line.

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Posted by timz on Tuesday, July 13, 2021 5:44 PM

OWTX
SEC. 3. Every railroad or other corporation, organized or doing business in this State under the laws or authority thereof, shall have and maintain a public office or place in this State for the transaction of business... SEC. 6. No railroad company organized under the laws of this State shall consolidate by private or judicial sale or otherwise with any railroad company organized under the laws of any other State or of the United States.

So the only reason T&NO and GC&SF and so on had to exist was that they started out as Texas RRs and so couldn't merge into SP and SFe? SP could have built into Texas under its own name, if it could do it without using T&NO?

Or was that theoretically possible, but the necessary approval would never be forthcoming?

T&NO merged into SP around 1960 -- how long before that did the constitution change?

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Posted by rdamon on Tuesday, July 13, 2021 8:17 PM

Wasn't the Cotten Belt (SSW) also a Texas company part of the SP?

BNSF seemed to solve the problem by moving their HQ.

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Posted by CMStPnP on Tuesday, July 13, 2021 9:14 PM

ronrunner

Hence Grand Trunk..DWP..D&H had to have US Charters and management on paper..as I also recall GT had a division in Maine

It is the state requiring that NOT the United States.   As mentioned earlier Texas used to require it.

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Posted by CMStPnP on Tuesday, July 13, 2021 9:24 PM

rdamon
Wasn't the Cotten Belt (SSW) also a Texas company part of the SP?

Texas and New Orleans was another one besides the Cotton Belt.   

CB&Q = Colorado and Southern,

MoPac = Texas and Pacific,

AT&SF = Panhandle and Santa Fe, ......Gulf, Colorado and Santa Fe.

The Texas law was changed in 1965.

 

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Posted by Gramp on Tuesday, July 13, 2021 10:32 PM

I prepared 2019 tax returns for several railroaders working for CN or CP. Their W2's were issued with the employer being Wisconsin Central or Illinois Central, Soo Line. Not CN or CP. 

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Posted by tree68 on Wednesday, July 14, 2021 7:10 AM

CN would have purchased the CSX St Lawrence Sub as the Bessemer & Lake Erie, which CN owns.

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Posted by jeffhergert on Wednesday, July 14, 2021 7:24 PM

SD70Dude

All of CN's American operations are still legally owned by the Grand Trunk Corporation, which of course is a wholly owned subsidiary of CN.  No separate paint schemes anymore, though the GTW and DWC reporting marks remain in use on a lot of freight equipment, along with those of all the other American railroads CN has acquired over the last 25 years.

I believe CP has a similar arrangement using Soo Line.

 

Soo Line and Dakota Minnesota and Eastern.  A couple of years ago (I mentioned it once in another thread) Soo Line and DM&E granted each other trackage rights between various terminals near where they "interchange."  Where the ownership on paper changes between the two.  

Both are operated under the CPRS banner.  Customers see a seemless railroad, but the old entities still exist on paper for various reasons.

Jeff

 

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Posted by OWTX on Wednesday, July 14, 2021 7:35 PM

A foreign subsidiary for cross border operations is S.O.P. - Payroll, liability, etc, etc. That whole international law thang.

1934 Texas et al v. United States et al put an end to state attempts to regulate the rail merger market, and requirements for in-state railroad facilities.

 

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Posted by MidlandMike on Wednesday, July 14, 2021 8:34 PM

CMStPnP
CB&Q = Colorado and Southern,

The Texas subsidiary was the Fort Worth and Denver.  There was also the Burlington-Rock Island Railroad.

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Posted by OWTX on Wednesday, July 14, 2021 9:06 PM

BNSF lists the Rio Grande, El Paso and Santa Fe Railroad Company (TX) as a wholly owned subsidiary.

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Posted by jeffhergert on Saturday, July 17, 2021 2:44 PM

MidlandMike

 

 
CMStPnP
CB&Q = Colorado and Southern,

 

The Texas subsidiary was the Fort Worth and Denver.  There was also the Burlington-Rock Island Railroad.

 

The Burlington - Rock Island Railroad was the entity used for the joint line from Dallas/Ft.Worth area to Houston/Galveston, plus one or two branch lines of the route.  Over time B-RI was phased out and it became the Joint Texas Division.

The Rock Island's Texas lines were at one time under the Chicago Rock Island & Gulf Railway name.

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Posted by BEAUSABRE on Sunday, July 18, 2021 12:26 AM

Does Mopac's International-Great Northern count?

International–Great Northern Railroad - Wikipedia

Gulf Coast Lines - Wikipedia

 

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Posted by beaulieu on Sunday, July 18, 2021 2:13 AM

BEAUSABRE

And a good few other MoPac subsidiaries.

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Posted by ghCBNS on Sunday, July 18, 2021 1:25 PM

SD70Dude

All of CN's American operations are still legally owned by the Grand Trunk Corporation, which of course is a wholly owned subsidiary of CN...... 

Grand Trunk Western was still operating passengers trains when Amtrak was formed and acquired Amtrak Stocks as part of their buy-in.

Grand Trunk being a subsidiary of CN which in turn was a Canadian Crown Corporation until privatized in 1995......I guess you can say the Canadian Government was one of the an original owners of Amtrak Stock.  

 Interesting read.....

https://tonyseed.wordpress.com/2017/12/18/who-owns-amtrak/

 

 

 

 

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Posted by zugmann on Sunday, July 18, 2021 5:05 PM

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   The opinions expressed here represent my own and not those of my employer or any other railroad, company, or person.

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Posted by wjstix on Wednesday, July 21, 2021 4:32 PM

Short answer to original question is 'yes'. A railroad operating in the US - at least before some of the changes (NAFTA etc.) in the 1990s - had to be majority owned by US citizens, and chartered as a US railroad. For example, the short section of the CN mainline running south of Lake of the Woods in Minnesota was incorporated as a separate US railroad (Minnesota & Manitoba...or was it the Manitoba & Minnesota?).

Now of course CN or CP could own 49.99% of a US railroad's stock and have several percent of stock owned by the US railroad's board of directors and other executives who basically voted the way their Canadian bosses wanted them to vote...but it still had to technically be majority American ownership.

There also were requirements that say a CN boxcar coming into America, or a CN engine pulling a through train on the DW&P to Duluth, could only stay in the US for so many hours (I think 24 or 36) before being sent back to Canada.

 

Stix
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Posted by Leo_Ames on Wednesday, July 21, 2021 4:56 PM

Any truth to a rail line serving a US military base, having to be US owned?

I always assumed it was a myth, but it was a regular claim some years ago at the Railroad.net forums when mergers or line acquisitions into the US by the two big Canadian roads were discussed (even though nobody could ever cite a statute to back it up).

Certainly have been some examples past and present that would seem to suggest that there's no such mandate. But since these Canadian operations into the US tend to be officially operated by paper subsidiaries registered in the US, I've never been certain if my hunch is correct that there's nothing to that claim.

Some such examples include the D&H that continued to serve Plattsburgh Air Force Base for several years after the CPR purchase before the base closure program shut it down. Or the still in the courts purchase by CNR of the CSX Massena line serving Fort Drum, which if it proceeds will on paper be owned and operated by their Bessemer & Lake Erie subsidiary (It's not looking good, but they're still hoping to get the STB mandate to allow potential interchange in the future with the Susie Q and Finger Lakes Railway lifted).

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Posted by SD70Dude on Wednesday, July 21, 2021 5:24 PM

wjstix

There also were requirements that say a CN boxcar coming into America, or a CN engine pulling a through train on the DW&P to Duluth, could only stay in the US for so many hours (I think 24 or 36) before being sent back to Canada.

Canadian roads owned a lot of equipment that was designated as international service, identified by reporting marks like CNIS, CPAA, or BCIT.  CN also identified international service cabooses by painting the cupolas yellow.

I'm not sure what had to be done to designate equipment for international service, but it probably involved tax or duty payments of some sort.

EDIT:  Here's another discussion on this topic:

http://cs.trains.com/mrr/f/13/p/240031/2677998.aspx

Greetings from Alberta

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Posted by jeffhergert on Wednesday, July 21, 2021 7:26 PM

wjstix

Short answer to original question is 'yes'. A railroad operating in the US - at least before some of the changes (NAFTA etc.) in the 1990s - had to be majority owned by US citizens, and chartered as a US railroad. For example, the short section of the CN mainline running south of Lake of the Woods in Minnesota was incorporated as a separate US railroad (Minnesota & Manitoba...or was it the Manitoba & Minnesota?).

Now of course CN or CP could own 49.99% of a US railroad's stock and have several percent of stock owned by the US railroad's board of directors and other executives who basically voted the way their Canadian bosses wanted them to vote...but it still had to technically be majority American ownership.

There also were requirements that say a CN boxcar coming into America, or a CN engine pulling a through train on the DW&P to Duluth, could only stay in the US for so many hours (I think 24 or 36) before being sent back to Canada.

 

 

Canadian Pacific owned 56% of Soo Line before axquiring full ownership about 1990.

Canadian Pacific merger family tree | Trains Magazine

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Posted by BEAUSABRE on Wednesday, July 21, 2021 10:23 PM

An "Articulated Malcontent"? I've never heard of that wheel arrangement. Is it like an Articulated Mastodon? UP had 25 of those

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Posted by BaltACD on Wednesday, July 21, 2021 11:04 PM

BEAUSABRE
An "Articulated Malcontent"? I've never heard of that wheel arrangement. Is it like an Articulated Mastodon? UP had 25 of those

In any event it is better than 'Articulated Incontent'.

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Posted by SD70Dude on Wednesday, July 21, 2021 11:22 PM

BaltACD
BEAUSABRE
An "Articulated Malcontent"? I've never heard of that wheel arrangement. Is it like an Articulated Mastodon? UP had 25 of those

In any event it is better than 'Articulated Incontent'.

Which in turn is far better than "Articulated Incontinent"..........

Seriously though, you've added a "d".  I got called that in an argument with a retired railroad manager in the comments on one of Fred Frailey's blogs a few years ago, and I liked the sound of it so I started using it. 

The argument had something to do with whether Hunter Harrison and PSR were good or bad. 

Greetings from Alberta

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Posted by wjstix on Thursday, July 22, 2021 1:45 PM

Leo_Ames
Any truth to a rail line serving a US military base, having to be US owned?

Technically / legally speaking, all railroads operating in the U.S. are U.S. railroads. Railroads that are generally thought of as being long gone (like the Soo Line) often still exist at least on paper, as the U.S. subsidiary of a Canadian corporation.

Stix

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