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Interesting reading on Milwaukee Road Pacific Coast Extension.

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Posted by MidlandMike on Saturday, August 7, 2021 8:52 PM

CMStPnP
I initially thought it would have been very shortsighted of BNSF Management to turn over one of the largest mineral areas in the United States to MRL and so that is what prompted me to look.    BNSF retained all rights to Butte, MT including the line ownership and some distance outwards from that city. 

BN leased the Butte-Garrison line to the Montana Western about the time the mine closeed in the '80, but then got it back in the early 2000s.  I would imagine they retained trackage rights and first right of refusal.

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Posted by Overmod on Saturday, August 7, 2021 10:59 AM

Erik_Mag
Stan Johnson wrote that Anaconda was pretty much taken over by William Rockefeller and Henry Roger

If that's the Henry Huttleston Rogers I think it's supposed to be, you might look at the nearly-contemporary Virginian electrification for similarities and differences...

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Posted by CMStPnP on Saturday, August 7, 2021 10:29 AM

Erik_Mag
the Milwaukee used several thousand tons.

A tiny drop in the bucket given the nationwide interurban building craze sponsored by Edison's apprentice.......Samuel Insull to use surplus electricity with the various Insull lines and power utilities and construction of Interurban lines across the country.   

Milwaukee went with electrification as part of the tail end of that promotional craze at that time as well as it saw cheap hydro power as a solution to fix the complications of using steam power in extreme cold weather in the mountains.    It had to change out steam power every x amount of miles so changing out electrical power less often was looked at as improvement in operations.

So I view the electrification in the historical context of the promotion of electrification and not the promotion of copper.

Your again mistaken on whom BAP interchanges with.   It interchanges with BNSF at Butte and Silver Bow, MT.....which maybe ex-NP but the line is owned by BNSF not MRL and BNSF is listed at the interchange railroad not MRL.   You can even see it on the BNSF map located here.    I initially thought it would have been very shortsighted of BNSF Management to turn over one of the largest mineral areas in the United States to MRL and so that is what prompted me to look.   

BNSF retained all rights to Butte, MT including the line ownership and some distance outwards from that city.   Also, still not buying into the theory they were unhappy with NP rates.    They were unhappy with one railroad in MT and that is why they built the BAP to begin with.    They had the money to extend the BAP anywhere they wanted.....why would they push Milwaukee to build for them, does not make any sense.    Also they had an interchange with UP which you really only need one competitor NOT two, to lower rates.   Further most of the unrefined ore and tonnage was carried by BAP not the connecting railroads.

Look here at the BNSF map:

https://www.bnsf.com/bnsf-resources/pdf/ship-with-bnsf/maps-and-shipping-locations/bnsf-network-map.pdf

 

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Posted by Erik_Mag on Saturday, August 7, 2021 1:26 AM

CMStPnP

I'm not going to read that, you know why?     You can google the history of the Anaconda mining company and not a single mention of the Milwaukee Road or any Anaconda mining interest driving the company to build the PCE.

My experience is that there is a LOT of history that does not show up in a google search. I'm also a bit skeptical of corporate histories, e.g. McDonalds saying that the first store was in Illinois while in reality the first store was in San Bernardino.

Stan Johnson wrote that Anaconda was pretty much taken over by William Rockefeller and Henry Roger by the time that plans were first being made for the PCE, who also had connections with the directors of the Milwaukee Road. Anaconda was also interested in increasing the market for copper and railroad electrification was thought to be a significant new market for copper - the Milwaukee used several thousand tons.

FWIW, BNSF has not served Butte or Anaconda for several decades as it is MRL territory. The fact that BNSF was giving good service to that area in the 70's does not necessarily mean that the NP was giving good service in the 1900-1905 time frame.

One final comment - Why the PCE was built is a different question than whether or not the PCE should have been built.

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Posted by Fred M Cain on Friday, August 6, 2021 12:56 PM

CMStPnP

 Erik_Mag

I suggest you read Stan Johnson's The Milwaukee Road's Western Extension, specifically page 23.

Butte, Anaconda and Pacific is still running today and happily using BNSF and UP.   Haven't seen any online complaints about their rates or operation.

 

 
I think I know how this whole thing got started.  There is a grain of truth in it but, well, lemme explain.
 
According to Thomas Ploss there was a manager who was high mucka-muck at the Milwaukee Road while the PCE was abuilding.  He had a conflict of interest since he also owned a lot of stock in the copper company.  This guy (I don't have his name in front of me) was the one responsible for buying a lot of the wire and hardware for the electrification.
 
Well, guess what?  The copper company charged the Milwaukee Road rates that were far, far above normal so that this guy could pocket some of that money.
 
But did the Milwaukee own the copper company or vice versa?  I dont' believe so.
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Posted by CMStPnP on Friday, August 6, 2021 12:10 PM

Erik_Mag
I suggest you read Stan Johnson's The Milwaukee Road's Western Extension, specifically page 23.

I'm not going to read that, you know why?     You can google the history of the Anaconda mining company and not a single mention of the Milwaukee Road or any Anaconda mining interest driving the company to build the PCE.    If was true and not just one persons opinion, it would be part of the written history of Anaconda Mining or at least of Montana.........nowhere to be found.

Butte, Anaconda and Pacific is still running today and happily using BNSF and UP.   Haven't seen any online complaints about their rates or operation.

https://www.up.com/customers/shortline/profiles_a-c/bap/index.htm

 

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Posted by CMStPnP on Friday, August 6, 2021 11:53 AM

PNWRMNM
I do not understand what you think is wrong with rebuliding cars under an equipment trust. Will you please explain?

There is nothing wrong with it and I made no such statement.    I stated they had a propensity to use it which I should have said use almost exclusively and crowding out new car purchases.

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Posted by Fred M Cain on Friday, August 6, 2021 10:14 AM

This is what I got out of Ploss's book The Nation Pays Again.  I've posted this before but it's really worth reiterating 'cause it's quite interesting.

When the Milwaukee Road emerged from bankruptcy, they did something unusual from an investment perspective.

The Company paid off their debts by issuing a bunch of preferred shares.  What made these shares unusual was that they had voting rights whereas most preferred shares don't.

It was stipulated in the stock sale that if the Company failed to pay the dividends on these shares for more than two consecutive quarters, the preferred shareholders had the right to call a meeting of the board and oust the management.

This was something like a "poison pill" that helped destroy the Company.  Top level management and board members naturally would go to any ends to keep their jobs so when money began to get tight in the late 1950s, they started taking money out of track maintenance to keep paying the dividends.  The New York Central and the Pennsy and later Penn Central made a similar error although those were not preferred shares with those kinds of voting rights in that case.

As business continued to deteriorate, it turned into a vicious cycle.  It became more and more difficult to find money to pay the dividends with and finally they were performing virtually NO maintenance west of the Twin Cities.

Presumably, management erroneously assumed that railroad troubles in the post World War II era would be temporary and fleeting.  Alas, they were not.  America came dangerously close to losing our privately owned rail system.  In the end there was somewhat of a happy ending but not for the Milwaukee or the Rock Island line.

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Posted by PNWRMNM on Saturday, July 31, 2021 7:09 AM

CMStPnP
All the branch lines west of the Mississippi was another issue as well as their propensity to build and rebuild their freight cars under equipment trusts.    The PCE was not the only expensive choice they made that did not pan out very well.   

I do not understand what you think is wrong with rebuliding cars under an equipment trust. Will you please explain?

Mac

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Posted by Erik_Mag on Saturday, July 31, 2021 12:06 AM

CMStPnP

 I don't know where the whole Anaconda Mining involvement comes from but I have my doubts any of it  is true.

I suggest you read Stan Johnson's The Milwaukee Road's Western Extension, specifically page 23.

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Posted by CMStPnP on Friday, July 30, 2021 11:00 PM

PNWRMNM
they would have remained a prosperous midwestern railroad for some decades.

Not so sure on that with the competition they faced in the Midwest and the other mistakes they made.    For one upgrading of the Southwestern line to Sturtevant from KC thinking the St. Lawerence Seaway would be a boon to traffic to Lake Michigan ports.     All the branch lines west of the Mississippi was another issue as well as their propensity to build and rebuild their freight cars under equipment trusts.    The PCE was not the only expensive choice they made that did not pan out very well.    Extension to Louisville wasn't exactly a booming success either.

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Posted by BaltACD on Friday, July 30, 2021 10:11 PM

jeffhergert
...

While I think the PCE could've been viable, by 1980 abandonment was all but certain.  The cash it would've taken to rebuild it wasn't going to be available.  Even if sources could be found, would you lend it to a company who's management had let it, and most of the rest of the company, deteriorate so badly?  At the very least, someone else would need to own the line and nobody else needed it.  Nevermind wanting it.

Jeff    

Truthfully all carriers properties were on the decline prior to Staggers in 1980.  MILW may have been worse than most, but none were in great condidion.

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Posted by jeffhergert on Friday, July 30, 2021 7:41 PM

From some of the readings I've seen, the St Paul Road's board of directors didn't see them remaining prosperous for long.  They saw a future where they would eventually have to be consolidated into another railroad system.  Part of this reasoning may have been Jim Hill buying the CB&Q for an outlet to Chicago in the early 1900s.  Traffic that once was available to the CM&StP may have started going via CB&Q,  (Years later, the threat of the BN merger weighed heavily on lines like CGW and M&StL.  They feared the loss of traffic, where cars would stay on one line-BN bypassing them.)

When the MILW started planning to head for the pacific, the Northwest was booming.  By the time they got there the boom was subsiding and the opening of the Panama Canal a few years later didn't help.  The Washington state electrification was done during an inflationary period.  Less miles for more money than the Montana/Idaho segment.  They were also in that era rebuilding the lines across Illinois and Iowa.  Straightening out, reducing grades, double tracking the main line (except for the last leg from Manila IA to Council Bluffs) all in anticipation of more traffic from the UP.  Which never happened.

While I think the PCE could've been viable, by 1980 abandonment was all but certain.  The cash it would've taken to rebuild it wasn't going to be available.  Even if sources could be found, would you lend it to a company who's management had let it, and most of the rest of the company, deteriorate so badly?  At the very least, someone else would need to own the line and nobody else needed it.  Nevermind wanting it.

Jeff    

 

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Posted by PNWRMNM on Friday, July 30, 2021 6:54 AM

CMStPnP
The decision to build PCE was made by management because they felt they needed the long haul frieght rates in order to compete against the Hill Lines.    They were correct on that point.    Also, one rate Chicago to Seattle was another advantage, whereas the Hill Lines had to split rates between CB&Q and NP/GN over the same route.    Primary and favored vehicle for funding railroads at the time was issuance of bonds and still is today.    I think the decision to build the PCE was sound, it was just the means and methods that should have been thought about more.   In my view Milwaukee could have done better with a better constructed PCE that was engineered, estimated and financed better.

The MILW did not 'need to' compete with the Hill lines (and the Union Pacific) for traffic between Puget Sound and Chicago. They choose to enter that market. Had they not done so, they would have remained a prosperous midwestern railroad for some decades.

The decision to build the PCE was unsound. It cost four times the preconstruction estimate. Yes, construction was largely funded by bond sales. MILW had to pay interest on bonds issued to build a line that generated little traffic AND had high operating costs, which means the PCE generated far too little cash flow to service the debt incurred to build it. The electric powered segments were a sign of weakness, not strength. The PCE bankrupted the MILW twice. That is not the result of a wise investment.

Mac

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Posted by CMStPnP on Friday, July 30, 2021 12:49 AM

Erik_Mag
The fact that some high power investors were involved with the Puget Sound Extension of the Milw doesn't mean it made great financial sense, witness how many people were pushing Webvan in the late 1990's...

What high powered investors?    The decision to build PCE was made by management because they felt they needed the long haul frieght rates in order to compete against the Hill Lines.    They were correct on that point.    Also, one rate Chicago to Seattle was another advantage, whereas the Hill Lines had to split rates between CB&Q and NP/GN over the same route.    Primary and favored vehicle for funding railroads at the time was issuance of bonds and still is today.    I think the decision to build the PCE was sound, it was just the means and methods that should have been thought about more.   In my view Milwaukee could have done better with a better constructed PCE that was engineered, estimated and financed better.

They also built PCE very rapidly, 2300 new route miles in just three years time which of course ballooned the cost.    Was there another railroad out West that built an extension that long, that fast to the Pacific?....Nope.

Great Northern was built differently in that Hill waited for each extension to become profitable first before extending more which avoided a huge debt accumulation.   He used profits from past extensions to pay into the pool of money for future extensions.   I would argue this method saved GN from the Milwaukees repeated future bankruptcies as GN did not have the debt on the books Milwaukee did at completion to the West Coast.    Both GN and Milwaukee bought up as many existing lines as they could to form mainline or branch lines along their routes.  Also GN was built by private money and like the Milwaukee bought most of it's ROW vs using land grants.   Compared to Milwaukee, GN was managed far better during construction and after construction.

NP was chartered by Congress as a land grant railroad and was the first railroad built.   As the first railroad built as a public initiative, NP had serious issues finding funding for construction.   Additionally, since it was the first it could not rely on any existing railroad to ship in it's construction materials which inflated the cost of construction more (GN and MILW did not have that issue).    NP also made the mistake of quickly selling off it's land grants at cheap wholesale prices to raise quick cash for construction instead of taking the strategy of waiting for the land price to appreciate or at least first improving the land and then selling the parcels.  Most of NP's land grants were gone by the early 1900's.    Also, NP's bonds were consistently oversold.     So NP went through several bankruptcies but was never liquidated or forced to abandon because it fell into the orbit of the other Hill Lines.    NP was always the weaker line when compared with GN.    During construction of the GN, NP built branch lines to basically nowhere in several cases to slow down or hamper the construction of the GN a very expensive practice which did not produce any profits.   In the 1880's  in another costly mistake for the NP, an attempt was made to reach Chicago via lease of the Wisconsin Central railway.    Funds were spent towards Everet Street Station in Milwaukee (which was intended to be joint WC, Milwaukee Road and Milwaukee Northern station).   Also funds were paid for construction of Grand Central Terminal in Chicago but NP entered bankruptcy a third time and all those plans went to crap.    Anyway, NP had a very tumultous financial history during its construction and extension attempts.

I don't know where the whole Anaconda Mining involvement comes from but I have my doubts any of it  is true.

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Posted by Erik_Mag on Thursday, July 29, 2021 11:32 PM

CMStPnP

 

Erik_Mag
for an example of how far a copper company will go to get competitive freight rates - there was a lot of overlap in the board's of directors of the Milwaukee and Anaconda Mining Company.

 

Entirely new conspiracy theory for me I guess.    Though I would throw the BS flag on that conspiracy since  GN and NP served that mine a lot better than MILW.

 

The point is not so much whether the Milw could do a better job of serving the mine and smelter, but that the competition would limit the rates charged by the Hill lines. BTW, my impression is that the UP line into Silver Bow carried more traffic to the Butte and Anaconda area than the GN line from Helena.

The fact that some high power investors were involved with the Puget Sound Extension of the Milw doesn't mean it made great financial sense, witness how many people were pushing Webvan in the late 1990's...

As for the El Paso & Southwestern, there was some talk of it joining up with the Rock Island and the San Diego & Arizona to form yet another transcontinental - though I think the San Diego, Cuyamaca and Eastern would have been a more interesting western portion of the line. It certainly would have avoided the issues of the Tijuana & Tecate portion of the SD&A.

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Posted by Bruce Kelly on Thursday, July 29, 2021 8:38 AM

Precisely my point, Mark. And I stand by my assessment of your MILW writing as a "treasure trove of info." Full, as it may be, of "what ifs," which is what you yourself called them in your piece.

 

 

 

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Posted by Vermontanan2 on Thursday, July 29, 2021 2:47 AM

Bruce Kelly

The link provided by the OP leads to material that is brimming with "what ifs." Which can be intriguing, enlightening, and (at the very least) entertaining in the railway realm and just about anywhere else.

But ironic in this case, coming from an author who recently declared the "what if" scenario of CP establishing a direct route to Puget Sound to be (and I quote) "meaningless since it didn't happen."

An interesting statement by Bruce, who, on February 6, 2017 called webpage in question, "a treasure trove of info. Would make a wonderful story, complete with maps and photos, in a certain rail publication that used to provide the space necessary for subjects of this magnitude."

 

http://cs.trains.com/trn/f/111/t/261081.aspx?page=1

And, for proper context about the "what if" statement, it's referencing this thread:

http://cs.trains.com/trn/f/111/p/287199/3326177.aspx#3326177

As information.

--Mark Meyer

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Posted by daveklepper on Wednesday, July 28, 2021 7:48 AM

There is no question in my mind that Anaconda Board Members who were also CMStP&P Board Members had some influence both in going ahead with the Pacific extension and, later, with electrification.  Not that their influence was decisive, and certainly not the only consideration, but just understanding human nature, they had influence and used it.

This was not a conspiracy but normal business practice.

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Posted by CMStPnP on Wednesday, July 28, 2021 4:29 AM

Erik_Mag
for an example of how far a copper company will go to get competitive freight rates - there was a lot of overlap in the board's of directors of the Milwaukee and Anaconda Mining Company.

Entirely new conspiracy theory for me I guess.    Though I would throw the BS flag on that conspiracy since  GN and NP served that mine a lot better than MILW.

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Posted by Erik_Mag on Tuesday, July 27, 2021 11:12 PM

Fred M Cain
Ah, yes, David Myrick.  I have deep regrets that I didn't buy all of his books years ago.  In my own personal, honest & humble opinion they are masterpieces for anyone interested in railroad history in the West.
 

No argument from me on the quality of Myrick's books - my biggest beef is that he never did cover the Arizona Mining Belt after his tease in Vol 1 of RR's in Arizona, though a brief mention was made in one of the latter volumes.

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Posted by Bruce Kelly on Tuesday, July 27, 2021 10:49 AM

The link provided by the OP leads to material that is brimming with "what ifs." Which can be intriguing, enlightening, and (at the very least) entertaining in the railway realm and just about anywhere else.

But ironic in this case, coming from an author who recently declared the "what if" scenario of CP establishing a direct route to Puget Sound to be (and I quote) "meaningless since it didn't happen."

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Posted by Fred M Cain on Tuesday, July 27, 2021 10:14 AM

Erik_Mag

<SNIP> ...but I would recommend first reading the chapter on the El Paso and Southwestern in Myrick's Railroads of Arizona Vol I for an example of how far a copper company will go to get competitive freight rates - there was a lot of overlap in the board's of directors of the Milwaukee and Anaconda Mining Company.

 
Ah, yes, David Myrick.  I have deep regrets that I didn't buy all of his books years ago.  In my own personal, honest & humble opinion they are masterpieces for anyone interested in railroad history in the West.
 
They are still available today but you can expect to pay a very SHINY penny for a used copy in decent condition.
 
When I was in my early 20s I worked the school library during the summer.  (ASU).  One task I had was to man the guard station to make sure no one was stealing books.  There was very little student traffic in the summer and the library had Myrick's books The Railroads of Eastern California & Nevada (volumes 1 & 2).  So, I'd sit there and read between check outs.
 
I enjoyed reading them immensely.  Wish I'd bought 'em though.  But I had little money in those days.  
 
Regards,
Fred M. Cain
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Posted by Fred M Cain on Tuesday, July 27, 2021 10:07 AM

For those who know me, this is a subject I've long been interested in and have posted on this before.

I think a great place to start is to read Mark Meyer's information carefully and then also carefully read The Nation Pays Again by Thomas Ploss.  That will give you a good perspective on the two sides.

There's really little point in arguing back and forth on the subject.  I've tried to do that and have largely failed.  My best advice is to study the subject well and arrive at your own conclusions.

Regards,

Fred M. Cain

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Posted by Erik_Mag on Tuesday, July 20, 2021 12:25 AM

In my humble opinion, the truth is a lot messier than either Mark or Michael make it out to be. Hank Johnstons book on the Milwaukee's Western Extension is a good starting point, but I would recommend first reading the chapter on the El Paso and Southwestern in Myrick's Railroads of Arizona Vol I for an example of how far a copper company will go to get competitive freight rates - there was a lot of overlap in the board's of directors of the Milwaukee and Anaconda Mining Company.

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Posted by Overmod on Monday, July 19, 2021 1:09 PM

CMStPnP
I could care less in regards to any of that.   I was posting as a general interest item. 

But always dangerous to post commonly-known one-sided material without at least a disclaimer that there's another side of the story... one with at least as much documentation behind it than you'd dredge up at the library in months.

As I expect some of the response almost momentarily, I'll leave it at that, although I almost can't conceive of a poster as regular and long-standing as you who would claim to be unaware of the Great Meyer-Sol Milwaukee PCE feud, or participated in reading some of the threads and posts there.

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Posted by CMStPnP on Monday, July 19, 2021 11:08 AM

Overmod
But you are coming very late to this particular dance, and you should be advised that this is only one side of a very particular, long-running, and contentious discussion that has been ongoing for over 20 years now, most recently over on the Classic Trains thread (to Steve Otte's near despair). If you are going to quote Mark Meyer in detail, in the interests of fair disclosure you should quote Michael Sol (and his equally extensive and erudite pages and pages of Milwaukee Road Pacific Coast Extension documentation).   And even if you don't, I expect he will be here shortly to manage the matter himself.  Have the Jiffy Pop and the aspirin ready.

I could care less in regards to any of that.   I was posting as a general interest item.    In regards to the rather wild and ridiculous arguments in the railfan community on history, I generally steer clear of them as a waste of my time.    Milwaukee Public Library has all the Milwaukee Road Corporate Papers and documents in a collection.    If I was on the edge of my seat regarding a Milwaukee Road issue, I would go there first vs someone on the internet I never met before.

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Posted by Murphy Siding on Monday, July 19, 2021 9:19 AM

Lots of aspirin.

Thanks to Chris / CopCarSS for my avatar.

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Posted by Overmod on Monday, July 19, 2021 6:37 AM

CMStPnP
Fascinating reading...

But you are coming very late to this particular dance, and you should be advised that this is only one side of a very particular, long-running, and contentious discussion that has been ongoing for over 20 years now, most recently over on the Classic Trains thread (to Steve Otte's near despair).

If you are going to quote Mark Meyer in detail, in the interests of fair disclosure you should quote Michael Sol (and his equally extensive and erudite pages and pages of Milwaukee Road Pacific Coast Extension documentation).  

And even if you don't, I expect he will be here shortly to manage the matter himself.  Have the Jiffy Pop and the aspirin ready.

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