Shipper's Hop Aboard Rail

[Anonymous]

Posted this previously, but I want Murphy's response:

http://news.mywebpal.com/partners/865/public/news729187.html

Okay, once you get past the NIMBY angle (which all newsfolks seem to push when reporting on local rail issues), what this item is about is the fact that a regional division of UP (and BNSF as well) was wise enough to hold onto an underutilized rail line, and now it is on the threshhold of becoming a secondary main:

"One of UP’s biggest bottlenecks between St. Louis/Chicago and Texas is between Rockview, located in northern Scott County, and Dexter.
'It causes a lot of congestion, a lot of dispatching maneuvering,' Peterson said. Meanwhile, the rail line extending west from Sikeston to Dexter is underutilized, he said.
To address this bottleneck and better use the underutilized line, UP officials formed a deal with the Burlington Northern Santa Fe Railroad to acquire the rail line which runs from Sikeston north to Rockview. "

You will also note that the *cost* of keeping these underutilized lines is now apparently far less than the cost of trying to double track the existing main. (Comment, Mudchicken?[;)]):

"Peterson said it costs $2.5 million to $3 million per mile to double track. 'Steel is becoming more and more expensive,' he explained. He added that the railroad would also need another 10 miles of right-of-way land to double track that line.
As the cost for UP to take the northern route would be at least $60 million to $70 million, it would be 'a much more expensive alternative to the plan we are pursuing,' Peterson said. 'That’s why we are not pursuing the double track.' "



[^]

[MichaelSol]

Is there something you actually know about this, or are these all just conclusory allegations based on what you think is happening? I mean, are you reading this in the papers, have you analyzed insurance statistics, looked up some cases ... anything at all? You leave the distinct impression that you are self-generating "controversy". I just don't think a branch line to a mine is something you often see in an urban setting, nor for that matter, abandoned mainline between cities. I think railroads in a strictly urban setting is a different matter entirely and probably represents, at best 2% of the total abandoned railroad mileage in the United States over the past 25 years.

[MichaelSol]

QUOTE: Originally posted by MichaelSol
Since 2001 capital gains tax has been quite favorable to sales, but prior to that time, fluctuated between 20 and 40%. During the period of time apparently in question, the 1970s, it was closer to 40%, while the corporate income tax varied between 30 and 40%. The difference then, between the tax saved using a tax shield strategy and the tax incurred on a sale was quite a swing.

If you want to use real hindsight, as opposed to a revenue stream strategy which would ordinarily be done at the time of decision making, hindisight would be this:

Land prices tend to reflect tax policy. Land was at its cheapest during the period of high capital gains tax. Railroads were selling their land at a point when land was historically low priced, and the gains tax they were paying was historically high. This could be clearly seen at the time and was probably, at best, opting for the poorest decision under the circumstances.

Now they are buying when the capital gains tax is historically low, and land prices for acquisition historically high.

Essentially a "sell low, buy high" strategy.

Hindsight indeed says they did it backwards.

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by MichaelSol


The cost premium as actually measured for liability insurance purposes in most instances that I am specifically aware of? Zero. Yup, zero.

Is that because there are none, or is it that you're not specifically aware of any. There is a difference, you know. Do you have any numbers to back up just how many lawsuits weren't filed, or is this just speculation on your part?

I have handled oh, probably, 50 or 60 land transactions involving abandoned railroad right of way, which in some cases has included big iron bridges -- big ones -- and tunnels as well. One particular river bridge had been offered by the salvage company to the local rancher who had bought the adjacent R-O-W from the Trustee. I had seen this bridge "move" six inches in a big flood in 1964, when the railroad brought a train load of ballast and sat it on the bridge for a couple of days, then dumped it as the high water mark passed. Upon asking my advice, I said "no way," if that bridge decides to fall in the river and shoot high water over to the development on the opposite shore, the cost of recovery and damages could be in the hundreds of thousands. Tell the salvage company to get that bridge out of there.

Well, he liked that bridge, I guess. He went to his insurance agent and saw how much it would cost him to insure against that "possibility" which I spoke of in terms of "likelihood." It was already covered under his general policy. I thought that unlikely, but since then, I have seen either that or small premium additions as an additional covered structure -- as though something was going to damage the bridge! Liability, however, was almost always already covered already. He had a million dollars in coverage before he bought the bridge, and a million dollars in coverage after he bought the bridge.

Of course, insurance companies are data driven, not bias driven. They are indeed, "hindsight" driven since all real world data is "hindsight."

Now, as to the question "Do you have any numbers to back up just how many lawsuits weren't filed ...".

Well, that would be a neat trick, wouldn't it?

How many car accidents didn't happen yesterday? Well, all of them! That's about the only available answer to a question like that.

However, if you do a Westlaw or Lexis Nexis search using keywords, "railroad", "premises liability", "damages", and go through a few jurisdictions, you will readily see that the "HUGE" appelation attached to the problem in the earlier post is just not out there -- not compared to getting hit by a train, for instance.

The bridge, incidentally, is still there, 26 years later.

[Murphy Siding]

QUOTE: Originally posted by MichaelSol


The cost premium as actually measured for liability insurance purposes in most instances that I am specifically aware of? Zero. Yup, zero.

Is that because there are none, or is it that you're not specifically aware of any. There is a difference, you know. Do you have any numbers to back up just how many lawsuits weren't filed, or is this just speculation on your part?

[MichaelSol]

Any numbers, or just speculation?

The reason I ask is because at least 95% of all premises lawsuits against railroads that I am aware of result from moving train interactions. If the liability was that HUGE, I guess we just wouldn't be running trains.

Statistically, the odds of a premises liability suit against a railroad company for an abandoned or railbanked right of way are extremely low and, while most railroads are self insurers, there is a measure of liability risk by reference to the actual insurance costs to landowners who have purchased abandoned railroad right-of-way which includes bridges, tunnels and massive fill, of which there happens to many such landowners in my neck of the woods and many such bridges and tunnels.

The cost premium as actually measured for liability insurance purposes in most instances that I am specifically aware of? Zero. Yup, zero.

[n012944]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

Murphy,

Will you at least acknowledge that it is less expensive to keep an asset in limbo for 20 or 30 years, than it is to try and rebuild that asset from scratch?

There's a reason a wise investor will hold onto assets for the long run, even if they aren't paying 10% or more for several years. Patience = payoff!

Well, yes and no. ( Codeword:Crystal Ball)[;)]

Well, yes.

Ultimately, this is land. It doesn't depreciate. You can't apply standard investment rules of thumb to it. It has its own operative rules, one of which is "you can't go wrong on it."

Northern Pacific was notorious for eaking every last nickel out of right of way. If there was room, they leased the land for businesses or hayland right up to the gravel. If the line was out of use, up went the fences and they leased the land for grazing, got the tax reclassification for ag, and still made money on the deal.

Compared to its cost of acquisition, the proceeds still looked like a pretty good ROI, better than the railroad was typically earning in general. NP, which had a lot of these little branches all over the place, even used them as a tax strategy. If it was going to be a good year for the railroad, scrap out the track on some unused lines, accelerate the deprecation for the write off, and get a substantial tax shield on real earnings. And they still had the land.

Particularly for the mining industry, which often has market cycles of 20 and 30 years duration, the policy protected both the railroad and the mining industry. Ultimately, the property could be sold, at a much appreciated value over its book. Depending on the gains tax in place, and the railroad's earned income, sale could ultimately net less for the railroad than a careful management of the property for steady income plus potential tax shields when the company needed it.

For that property with structures, depreciation certainly offered a tax shield with no downside.

Since 2001 capital gains tax has been quite favorable to sales, but prior to that time, fluctuated between 20 and 40%. During the period of time apparently in question, the 1970s, it was closer to 40%, while the corporate income tax varied between 30 and 40%. The difference then, between the tax saved using a tax shield strategy and the tax incurred on a sale was quite a swing.

Under those specific circumstances, railbanking or redeployment of the asset made sense compared to sale.

It just wasn't an investment policy that required a crystal ball. Because of the type of asset, it was a policy guaranteed to produce income and long term benefits to the company.

You left out the liability. When railroads are railbanked they still have all the bridges and rails that can injure or even kill some tresspasser. And thanks to you ambulance chaseing lawyers, that is something that the railroads also have to consider and could be a HUGE expense. Should I keep a HUGE liability around for something that "might," and in the 70's looked like it wouldn't, happen, and keep this liabilty around for me to get sued. Or should I just be done with it, since at the time it looked like redundant anyway. We get back to the hindsight thing again, something that Mikey and Dave seem to be best at.


Bert


Bert

[MichaelSol]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal

Murphy,

Will you at least acknowledge that it is less expensive to keep an asset in limbo for 20 or 30 years, than it is to try and rebuild that asset from scratch?

There's a reason a wise investor will hold onto assets for the long run, even if they aren't paying 10% or more for several years. Patience = payoff!

Well, yes and no. ( Codeword:Crystal Ball)[;)]

Well, yes.

Ultimately, this is land. It doesn't depreciate. You can't apply standard investment rules of thumb to it. It has its own operative rules, one of which is "you can't go wrong on it."

Northern Pacific was notorious for eaking every last nickel out of right of way. If there was room, they leased the land for businesses or hayland right up to the gravel. If the line was out of use, up went the fences and they leased the land for grazing, got the tax reclassification for ag, and still made money on the deal.

Compared to its cost of acquisition, the proceeds still looked like a pretty good ROI, better than the railroad was typically earning in general. NP, which had a lot of these little branches all over the place, even used them as a tax strategy. If it was going to be a good year for the railroad, scrap out the track on some unused lines, accelerate the depreciation for the write off, and get a substantial tax shield on real earnings. And they still had the land.

Particularly for the mining industry, which often has market cycles of 20 and 30 years duration, the policy protected both the railroad and the mining industry. Ultimately, the property could be sold, at a much appreciated value over its book. Depending on the gains tax in place, and the railroad's earned income, sale could ultimately net less for the railroad than a careful management of the property for steady income plus potential tax shields when the company needed it.

For that property with structures, depreciation certainly offered a tax shield with no downside.

Since 2001 capital gains tax has been quite favorable to sales, but prior to that time, fluctuated between 20 and 40%. During the period of time apparently in question, the 1970s, it was closer to 40%, while the corporate income tax varied between 30 and 40%. The difference then, between the tax saved using a tax shield strategy and the tax incurred on a sale was quite a swing.

Under those specific circumstances, railbanking or redeployment of the asset made sense compared to sale.

It just wasn't an investment policy that required a crystal ball. Because of the type of asset, it was a policy guaranteed to produce income and long term benefits to the company.

[MichaelSol]

QUOTE: Originally posted by TomDiehl
2. That their investment would not even buy them a seat on the railroad BOD?

Timing is everything. Milwaukee had a staggered board, and election were, if I recall, held in the Fall. The type of structure is fairly standard, and designed to prevent immediate takeovers. I don't recall now if Levy got his seat in the Fall of 77, just before the petition was filed, or after that. But, you don't just "buy" a board seat.

[MichaelSol]

Read it more carefully. Most businesses petitioning for bankruptcy were not the Milwaukee Road.

Milwaukee was a wealthy company. It's debt to equity ratio was described by the ICC as "very favorable." It had substantial natural resources and industrial properties -- that's what Odyssey looked at -- Milwaukee had enormous resources available to devote to rebuilding the infrastructure.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
What an investor is aware of is important. Not only is buying stock in a railroad that has the potential to serve a major customer like the PRB coal fields important, but buying this stock as an investment (from the viewpoint of Odyssey) would also require some homework on the part of the investor(s) to determine if 1) The company they buy into will make the investment to take advantage of this or 2) the ones that buy in will gain the authority in the company to make that decision. Since they didn't get either, I'd say someone was "asleep at the wheel" on that stock buying spree.

QUOTE: Originally posted by TomDiehl
If that was the case, then the bankruptcy of the Milwaukee was a good thing for them. It makes one suspicious that they may have either had something to do with it, or knew it was coming and knew how they'd make out. Sort of like the corporate rapists of the 70's.

Whew.

Between the extremes of being complete duffouses and Machiavellian geniuses, the truth is no doubt in there somewhere.

First you were saying that Odyssey invested indirectly in the Milwaukee to take advantage of the fact that the railroad was on or near major coal deposits and a DOE report suggested this would provide a major upswing in business, yielding dividends to the stockholders.

On the other hand, when the Milwaukee went into bankruptcy, you said Odyssey made out well with their investment, definately not the norm for stockholders in such proceedings. They're usually lucky to break even.

[TomDiehl]

QUOTE: Originally posted by futuremodal

You're getting quite a bit pedantic to suggest that holding on to an asset is "expensive".

Lost business from treating customers like crap, now that's expensive!

So you're saying that holding on to an unused asset is free? Without the Monday morning quarterbacking knowledge you have now, it would be total speculation back then.

[Anonymous]

You're getting quite a bit pedantic to suggest that holding on to an asset is "expensive".

Lost business from treating customers like crap, now that's expensive!

[MichaelSol]

QUOTE: Originally posted by TomDiehl
What an investor is aware of is important. Not only is buying stock in a railroad that has the potential to serve a major customer like the PRB coal fields important, but buying this stock as an investment (from the viewpoint of Odyssey) would also require some homework on the part of the investor(s) to determine if 1) The company they buy into will make the investment to take advantage of this or 2) the ones that buy in will gain the authority in the company to make that decision. Since they didn't get either, I'd say someone was "asleep at the wheel" on that stock buying spree.

QUOTE: Originally posted by TomDiehl
If that was the case, then the bankruptcy of the Milwaukee was a good thing for them. It makes one suspicious that they may have either had something to do with it, or knew it was coming and knew how they'd make out. Sort of like the corporate rapists of the 70's.

Whew.

Between the extremes of being complete duffouses and Machiavellian geniuses, the truth is no doubt in there somewhere.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Essentially, they had no control of the railroad's decision making process, the stock buy got them nothing ...

The stock buy made them fabulously wealthy. Odyssey was composed of retired founders of the Oppenheimer Fund. Odyssey was their method of investing their own, rather than other people's, money. Milwaukee turned out to be the best investment they ever made.

If that was the case, then the bankruptcy of the Milwaukee was a good thing for them. It makes one suspicious that they may have either had something to do with it, or knew it was coming and knew how they'd make out. Sort of like the corporate rapists of the 70's.

[MichaelSol]

QUOTE: Originally posted by TomDiehl
Essentially, they had no control of the railroad's decision making process, the stock buy got them nothing ...

The stock buy made them fabulously wealthy. Odyssey was composed of retired founders of the Oppenheimer Fund. Odyssey was their method of investing their own, rather than other people's, money. Milwaukee turned out to be the best investment they ever made.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Murphy,

Will you at least acknowledge that it is less expensive to keep an asset in limbo for 20 or 30 years, than it is to try and rebuild that asset from scratch?

There's a reason a wise investor will hold onto assets for the long run, even if they aren't paying 10% or more for several years. Patience = payoff!

Well, yes and no. ( Codeword:Crystal Ball)[;)]

[TomDiehl]

QUOTE: Originally posted by futuremodal

Murphy,

Will you at least acknowledge that it is less expensive to keep an asset in limbo for 20 or 30 years, than it is to try and rebuild that asset from scratch?

There's a reason a wise investor will hold onto assets for the long run, even if they aren't paying 10% or more for several years. Patience = payoff!

"less expensive to keep an asset in limbo" is irrelevent if the company doesn't have the money to cover the expense of such speculation. A wise investor is also one that can AFFORD to hold on to assets (you can't be any kind of investor without money to invest), but then I guess you'll suggest they jack up the rates on captive shippers to cover that expense. Such "patience" requires money to finance the non-productive time.

[Anonymous]

Murphy,

Will you at least acknowledge that it is less expensive to keep an asset in limbo for 20 or 30 years, than it is to try and rebuild that asset from scratch?

There's a reason a wise investor will hold onto assets for the long run, even if they aren't paying 10% or more for several years. Patience = payoff!

[TomDiehl]

QUOTE: Originally posted by MichaelSol

Their "investment" bought othr people's shares of stock. When people buy stock, unless it is a "new issue" the company generally doesn't get any of the money. A remark earlier on this thread about throwing cash at railroads because of the high stock price was oddly naive. The railroads don't get the money, unless they issue new stock; and current stockholders don't like that because that dilutes their holdings.

Don't really know what they were "aware" of but only that they wanted to a key railroad property strategically situated for the upcoming coal boom. They chose Milwaukee Road viewing it as an underpriced property with excellent prospects.

However, Milwaukee was shortly thereafter then put into receivership and so any influence Odyssey might have had over the railroad management was, poof, gone. Management was completely severed from the Board of Directors by the bankruptcy filing. Shareholders lined up after everyone else for the proceeds from liquidation or sale.

I'm aware of the new issue vs. existing stock from other holders difference.

What an investor is aware of is important. Not only is buying stock in a railroad that has the potential to serve a major customer like the PRB coal fields important, but buying this stock as an investment (from the viewpoint of Odyssey) would also require some homework on the part of the investor(s) to determine if 1) The company they buy into will make the investment to take advantage of this or 2) the ones that buy in will gain the authority in the company to make that decision. Since they didn't get either, I'd say someone was "asleep at the wheel" on that stock buying spree.

Then the current BOD filing for bankruptcy was the final nail in the coffin for the money the Odyssey group laid out. Essentially, they had no control of the railroad's decision making process, the stock buy got them nothing, and they had no control of the Milwaukee's going belly up.

[MichaelSol]

Their "investment" bought othr people's shares of stock. When people buy stock, unless it is a "new issue" the company generally doesn't get any of the money. A remark earlier on this thread about throwing cash at railroads because of the high stock price was oddly naive. The railroads don't get the money, unless they issue new stock; and current stockholders don't like that because that dilutes their holdings.

Don't really know what they were "aware" of but only that they wanted to a key railroad property strategically situated for the upcoming coal boom. They chose Milwaukee Road viewing it as an underpriced property with excellent prospects.

However, Milwaukee was shortly thereafter then put into receivership and so any influence Odyssey might have had over the railroad management was, poof, gone. Management was completely severed from the Board of Directors by the bankruptcy filing. Shareholders lined up after everyone else for the proceeds from liquidation or sale.

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl

OK, let me try stating this question a different way. Was the partial ownership of the Milwaukee Road, through the CMC purchase enough to have influenced major investment decisions to a point where Odyssey Partners could be considered a major part of what caused the Milwaukee to file for bankruptcy?

Stock ownership and board seats are two different things. Leon Levy was, I believe, the only board member representing Odyssey, and that was on the CMC Board, not the railroad company board -- although there was considerable overlap. Odyssey Partners were investors, not managers.

Levy's view was what might be considered a modern view: sell the unnecessary assets, the timber, the industrial real estate, the unneeded branches, and invest in the core business and make it pay. He saw the coal boom underway, and wanted to be part of it. Secretary of Energy James Schlesinger told him in early 1977 that the coal industry could only go up, that railroads were going to be the biggest benefactors of the coming demand for coal, and Milwaukee Road ran over the top of some of the largest coal reserves on Earth.

Investing in the railroad was contrary to the views of the established board which was 1) no more money into the railroad company, 2) somehow get the money out to put into other investments. Milwaukee Land Company had been steadily liquidating its tree farms, for instance, but the money was getting put into paving companies, food service companies, and odd things that the board knew nothing about.

Levy was probably the only board member who actually bought shares because he wanted to invest in a railroad company.

The only "A" he ever got in college was in Abnormal Psychology.

Now I think I'm starting to follow this:

The Odyssey Partners, through the CMC board, were investors in the Milwaukee Road.

They bought into this based on the DOE projection of the coal market making a major upswing, and the fact that the Milwaukee Road was close to, or right on top of, major coal deposits that were able to be economically mined.

By the "established board" in paragraph 3, I assume you're talking about the railroad BOD.

Before the partners bought into the Milwaukee Road, through CMC, were they aware:
1. That the railroad BOD had no intention of investing in new tracks to serve this traffic?
2. That their investment would not even buy them a seat on the railroad BOD?

And, would their investment be large enough to finance the construction necessary to serve this traffic?

[MichaelSol]

QUOTE: Originally posted by TomDiehl

OK, let me try stating this question a different way. Was the partial ownership of the Milwaukee Road, through the CMC purchase enough to have influenced major investment decisions to a point where Odyssey Partners could be considered a major part of what caused the Milwaukee to file for bankruptcy?

Stock ownership and board seats are two different things. Leon Levy was, I believe, the only board member representing Odyssey, and that was on the CMC Board, not the railroad company board -- although there was considerable overlap. Odyssey Partners were investors, not managers.

Levy's view was what might be considered a modern view: sell the unnecessary assets, the timber, the industrial real estate, the unneeded branches, and invest in the core business and make it pay. He saw the coal boom underway, and wanted to be part of it. Secretary of Energy James Schlesinger told him in early 1977 that the coal industry could only go up, that railroads were going to be the biggest benefactors of the coming demand for coal, and Milwaukee Road ran over the top of some of the largest coal reserves on Earth.

Investing in the railroad was contrary to the views of the established board which was 1) no more money into the railroad company, 2) somehow get the money out to put into other investments. Milwaukee Land Company had been steadily liquidating its tree farms, for instance, but the money was getting put into paving companies, food service companies, and odd things that the board knew nothing about.

Levy was probably the only board member who actually bought shares because he wanted to invest in a railroad company.

The only "A" he ever got in college was in Abnormal Psychology.

[TomDiehl]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by futuremodal

Tom, if you don't like the phrasing "could be", perhaps you'll be more comfortable with the phrase "should be"? Because "will be" is too predicated on pure speculation, while "should be" pertains to the normal projections of business planners.

I see one of the gang has jumped ship. Hmmmm......

Which leads right back to my original statement, spending money preserving assets that "may" be needed in the future is pure speculation, something the railroads could ill afford then.

Dave: You keep spinning around in circles here, leading back to the same place. Perhaps, rather than explain it one more time, we could just give the shorthand version: To do what you wanted the railroads to have done,they would have had to have a crystal ball. They didn't have one,so they did the best with what info they had at the time. To cut down on typing, next time,I'll just use the codeword *crystal ball*. [:p]

Good thing I don't get dizzy very easily, I've learned to spot. [:D]

[TomDiehl]

OK, let me try stating this question a different way. Was the partial ownership of the Milwaukee Road, through the CMC purchase enough to have influenced major investment decisions to a point where Odyssey Partners could be considered a major part of what caused the Milwaukee to file for bankruptcy?

[MichaelSol]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Did they buy enough stock to have a significant say in the direction the railroad was going with expansion in the PRB?

Yes, until December 16, 1977.

Prior to that date, Milwaukee was aggressively building coal traffic. After that date, the demise of that traffic was inevitable.

So by leaving in Dec 1977, Odyssey Partners essentially killed the Milwaukee's building of the coal traffic, and left them to die.

Good grief, would you take a deep breath and stop just making up conclusions?

Odyssey Partners bought a substantial amount of stock in CMC, Milwaukee's holding company. On December 16, 1977, a Petition for Reorganization was filed. The owners of the company lose control of the company to the Trustee, who in turn is usually relying on management for his guidance. Odyssey maintained its ownership interest, but under bankruptcy laws, the owners no longer had any control or right to control.

That's what happens in a Chapter 11 filing.

At the end of the day, the shares that Odyssey purchased at between $3 and $6, generated between $150 and $180. However, Odyssey had nothing to do with the decision to seek abandonment of the PCE or the closing of the Miles City Gateway because, as stockholders, they had no voice in the bankruptcy proceeding except insofar as CMC itself could appear as an interested party.

[Murphy Siding]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by futuremodal

Tom, if you don't like the phrasing "could be", perhaps you'll be more comfortable with the phrase "should be"? Because "will be" is too predicated on pure speculation, while "should be" pertains to the normal projections of business planners.

I see one of the gang has jumped ship. Hmmmm......

Which leads right back to my original statement, spending money preserving assets that "may" be needed in the future is pure speculation, something the railroads could ill afford then.

Dave: You keep spinning around in circles here, leading back to the same place. Perhaps, rather than explain it one more time, we could just give the shorthand version: To do what you wanted the railroads to have done,they would have had to have a crystal ball. They didn't have one,so they did the best with what info they had at the time. To cut down on typing, next time,I'll just use the codeword *crystal ball*. [:p]

[TomDiehl]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by TomDiehl
Did they buy enough stock to have a significant say in the direction the railroad was going with expansion in the PRB?

Yes, until December 16, 1977.

Prior to that date, Milwaukee was aggressively building coal traffic. After that date, the demise of that traffic was inevitable.

So by leaving in Dec 1977, Odyssey Partners essentially killed the Milwaukee's building of the coal traffic, and left them to die.

[TomDiehl]

QUOTE: Originally posted by futuremodal

Tom, if you don't like the phrasing "could be", perhaps you'll be more comfortable with the phrase "should be"? Because "will be" is too predicated on pure speculation, while "should be" pertains to the normal projections of business planners.

I see one of the gang has jumped ship. Hmmmm......

Which leads right back to my original statement, spending money preserving assets that "may" be needed in the future is pure speculation, something the railroads could ill afford then.