Milwaukee Road history - Wikipedia version

[Bergie]

Hmm... should I use my power to add the term "Milwaukee Road" to our bad word filter to save the rest of us from future episodes or not. What a dilemma.

Anyone else tired of this brand of bickering? I swear, sometimes it's worse than what I see out of my kids.   You said this. No I didn't, I said this.

Let's move on.

Bergie

[nanaimo73]

The New England, ND line was worth saving, it lasted another two years until 1982 when SD bought the Ortonville-Terry line. Perhaps ND should have stepped up then to save it.

[n012944]

Bert,

Are you still OK with his attitude?

I never was.  Typical know it all.  I love how he says that I "muddle these threads with my contentious arguments," but when I see that I am talking to a wall and try to move on, he keeps arguing.  Sounds to me like someone who just loves to hear himself talk, or in this case read what he writes.

Bert

Well, he got caught by his own game of "gotcha", can't explain the tangle of his own contradictory statements and so the name-calling starts and there goes yet another thread, courtesy of the usual suspects.

I'm outta here.

 

Funny it seems that eveythread that gets blown up has either you or FM in it.  Draw your own conclusions. And as to why Carter didn't listen to the DOT report, I have no idea.  Carter's decisions were not the greatest, one of the reasons he did not have a second term.

 

Bert

 

Bert

[billbtrain]

What were the carloadings on the branchlines from the South Dakota mainline?Would the branch from Andover to Britton been worth saving?What about the lines to Mitchell,Rapid City,New England,Faith,etc? Thanks.

Have a good one.

Bill B

[MichaelSol]

Bert,

Are you still OK with his attitude?

I never was.  Typical know it all.  I love how he says that I "muddle these threads with my contentious arguments," but when I see that I am talking to a wall and try to move on, he keeps arguing.  Sounds to me like someone who just loves to hear himself talk, or in this case read what he writes.

Bert

Well, he got caught by his own game of "gotcha", can't explain the tangle of his own contradictory statements and so the name-calling starts and there goes yet another thread, courtesy of the usual suspects.

I'm outta here.

 

[MP173]

With the shinanigans going on within that corporation, why would there have been a federal bailout?

But quite frankly, I am confused.  I think I will go home now.

ed

[n012944]

Bert,

Are you still OK with his attitude?

 

I never was.  Typical know it all.  I love how he says that I "muddle these threads with my contentious arguments," but when I see that I am talking to a wall and try to move on, he keeps arguing.  Sounds to me like someone who just loves to hear himself talk, or in this case read what he writes.

 

Bert

[greyhounds]

Bert,

Are you still OK with his attitude?

 

[MichaelSol]

Neither, now move on.

Bert

Sorry, not taking  orders from you these days.

It raises a good question as to why the Carter Administration would launch a DOT study, that neither Brock Adams nor Neil Goldschmidt would have anything to do with, using figures contradicted by the FRA within the same department, get Claytor to carry it nothwithstanding his whole 2.5-3 weeks as acting Secretary -- that was surely the fastest "study" ever done in DOT history -- and conclude that after "the US DOT did a study on giving funding to the MILW for the PCE in 1977.  It was decided after that study that not another dime of the goverments money should be spent on the PCE." n012944, 2/23/07.

Yet, after an executive agency under Carter allegedly made this report, and "it was decided ...that not another dime ...."  Jimmy Carter signed a bill doing the exact opposite, and authorizing up to $250 million for the Milwaukee Road. That's quite a few dimes.

Does this mean your statement about the DOT study was false?

There seems to be quite a contradiction between what you specifically said "was decided" and what was "decided." Which is it?

 

[n012944]

In any case, I was not the Carter Administration, and did not make the original statement on its behalf. Your contention that I made the statement is, in fact, false, and that seems to be where the "cracks" on these forums are originating.

You made the statement on this forum in what appears to be an effort to discredit the US DOT study. 

Bert

"The" statement regarding Carter's refusal of funds because of election concerns was made by a representative of the White House to the Governor of Montana. The Governor of Montana, in turn, personally told me of the conversation. I then referred to it on this thread February 20. 

It was only through incredible foresight that I was able on February 20 to make the reference as part of an effort to "discredit" a DOT study that you referred to on February 23.

 

I wasn't talking about the statement made on the 20,  I was talking about this statement said on the 23rd:

"Indeed, the DOT "study" sounds exactly like the Carter Administration's "cover story" on why the "government" was not going to spend any money on railroads that happened to be in Republican states in 1979 and 1980 -- only railroads in Republican states lost money and were, under longstanding government policy -- not entitled to federal funds. "

Now it really doesn't matter when you said it, Carter approved funds to the MILW in 1979 by signing the Congressional bill, making the statement false.  Could we move on?

Bert

I do not know why you wish to muddle these threads with your contentious arguments. Are you saying Carter himself discredited the DOT study by signing the Congressional bill? Or that Carter discredited himself by signing the Congressional bill?

Or both?

Neither, now move on.

 

Bert

[MichaelSol]

In any case, I was not the Carter Administration, and did not make the original statement on its behalf. Your contention that I made the statement is, in fact, false, and that seems to be where the "cracks" on these forums are originating.

You made the statement on this forum in what appears to be an effort to discredit the US DOT study. 

Bert

"The" statement regarding Carter's refusal of funds because of election concerns was made by a representative of the White House to the Governor of Montana. The Governor of Montana, in turn, personally told me of the conversation. I then referred to it on this thread February 20. 

It was only through incredible foresight that I was able on February 20 to make the reference as part of an effort to "discredit" a DOT study that you referred to on February 23.

 

I wasn't talking about the statement made on the 20,  I was talking about this statement said on the 23rd:

"Indeed, the DOT "study" sounds exactly like the Carter Administration's "cover story" on why the "government" was not going to spend any money on railroads that happened to be in Republican states in 1979 and 1980 -- only railroads in Republican states lost money and were, under longstanding government policy -- not entitled to federal funds. "

Now it really doesn't matter when you said it, Carter approved funds to the MILW in 1979 by signing the Congressional bill, making the statement false.  Could we move on?

Bert

I do not know why you wish to muddle these threads with your contentious arguments. Are you saying Carter himself discredited the DOT study by signing the Congressional bill? Or that Carter discredited himself by signing the Congressional bill?

Or both?

In either case, it's fine with me. Carter was perfectly justified in ignoring the DOT study -- it was garbage. And if Congress forced his hand by strongly backing the proposed relief -- his mendacious attitude deserved it.

 

[n012944]

In any case, I was not the Carter Administration, and did not make the original statement on its behalf. Your contention that I made the statement is, in fact, false, and that seems to be where the "cracks" on these forums are originating.

You made the statement on this forum in what appears to be an effort to discredit the US DOT study. 

Bert

"The" statement regarding Carter's refusal of funds because of election concerns was made by a representative of the White House to the Governor of Montana. The Governor of Montana, in turn, personally told me of the conversation. I then referred to it on this thread February 20. 

It was only through incredible foresight that I was able on February 20 to make the reference as part of an effort to "discredit" a DOT study that you referred to on February 23.

 

I wasn't talking about the statement made on the 20,  I was talking about this statement said on the 23rd:

"Indeed, the DOT "study" sounds exactly like the Carter Administration's "cover story" on why the "government" was not going to spend any money on railroads that happened to be in Republican states in 1979 and 1980 -- only railroads in Republican states lost money and were, under longstanding government policy -- not entitled to federal funds. "

 

Now it really doesn't matter when you said it, Carter approved funds to the MILW in 1979 by signing the Congressional bill, making the statement false.  Could we move on?

Bert

[MichaelSol]

In any case, I was not the Carter Administration, and did not make the original statement on its behalf. Your contention that I made the statement is, in fact, false, and that seems to be where the "cracks" on these forums are originating.

You made the statement on this forum in what appears to be an effort to discredit the US DOT study. 

Bert

"The" statement regarding Carter's refusal of funds because of election concerns was made by a representative of the White House to the Governor of Montana. The Governor of Montana, in turn, personally told me of the conversation. I then referred to it on this thread February 20. 

It was only through incredible foresight that I was able on February 20 to make the reference as part of an effort to "discredit" a DOT study that you referred to on February 23.

 

[MichaelSol]

Michael:

Two questions:

1.  What happened with the SEC and Milw in 1975.  Dont know if I can get to the Forbes articles.

The Milwaukee began reporting losses in the early 1970s, even as traffic was increasing. A little odd. Forbes thought so too. Here are my notes:

"For 25 years, the Land Co. has tossed off a million or so dollars of profit yearly, mostly from the sale of stumpage rights on roughly 200,000 acres of splendid Pacific Northwest land. From its fat kitty of retained earnings, the Land Co.'s handsome dividends boosted railroad earnings in lean years."

The magazine pointed out that in the early 1970's, the Land Co. began selling off timberlands -- nearly one-third of them -- and that the stockholders were not informed of this except that each year's annual reports simply listed smaller acreage, without comparative figures or disclosure that land was actually being sold. Perhaps more importantly, in 1971, the Land Co. stopped making dividend payments to the Railroad Corporation, and instead began making "loans" to it.

The result of this was that the Milwaukee Road's contingent bonds, which comprised a goodly amount of its debt load, required payment only in those years in which the Railroad actually earned profit. With the Railroad no longer reporting Milwaukee Land Co. earnings as profits, but rather as further indebtedness, the Railroad avoided paying nearly $12 million of contingent bond payments.

In addition, investigation revealed a political slush fund to which employees contributed, but were then recompensated for in their paychecks; the fund had never been audited, nor the uses to which it was put relayed to the employees. Boxcar numbers were alleged to have been switched to "fool lease or mortgage holders or other railroads which pay per diem charges on Milwaukee equipment."

Forbes asked why the Securities and Exchange Commission had not investigated these irregularities, and, answering its own question, pointed out that the chairman of the Securities and Exchange Commission was Ray Garrett Jr., a former director of the Milwaukee Road who had also set up the holding company, Chicago Milwaukee Corporation, in 1972 and served as its general counsel until his appointment to the SEC.

Garrett denied wrongdoing. The SEC began investigations. Garrett had been shown proofs of the Forbes articles prior to publication and told the SEC investigators that he "went home and wept."  Forbes, in closing its second article, "The Mal-waukee Road?," quoted one "long time observer" of the Milwaukee as remarking that "it was a candy store then. It is a candy store now." The phrase was intended to be a reminder of the scathing ICC commentary on the events leading to the Milwaukee Road's 1926 bankruptcy and reorganization, and Max Lowenthal's remarks that the railroad had been, since 1926 and even earlier, in the hands of persons who wanted control not because of the inherent profitability of railroading, but because "that control would determine who should have the profitable posts as its bankers, its lawyers, and its suppliers of equipment and materials."

Chairman Quinn wanted to sue Forbes for defamation and slander. He changed his mind after he was reputedly told that truth was a defense to a slander charge, which he didn't think was a very good law at all.

 

[MichaelSol]

2.  Any reason why GN didnt go heavier with the rail?

Just going out the door, this question's quicker. GN cut way back in everything to do with the track in 1961, just as the heavier rail was coming into vogue. GN just didn't have a budget for that kind of stuff. Traffic was declining on that route. Heavier rail for lighter traffic? The merger was problematic and off in the future. MILW kept plugging away at heavier rail from 1957 forward, and by 1969, the effort simply showed up in much larger numbers.

[MP173]

Michael:

Two questions:

1.  What happened with the SEC and Milw in 1975.  Dont know if I can get to the Forbes articles.

2.  Any reason why GN didnt go heavier with the rail?

ed

[billbtrain]

What size rail was on the PCE and was it welded or jointed rail?

Have a good one.

Bill B

Mostly 112-115 lb installed mid-1950s. Jointed. Some older 100 lb, quite a bit of 131-132 lb on curves installed early 1960s. A few locations had welded. Just getting into that era. MILW had about 1300 miles of 131-132, for instance, GN had 79 miles.

 

WOW!

Have a good one.

Bill B

[MichaelSol]

What size rail was on the PCE and was it welded or jointed rail?

Have a good one.

Bill B

Mostly 112-115 lb installed mid-1950s. Jointed. Some older 100 lb on some tangents out in Eastern Montana, quite a bit of 131-132 lb on curves installed early 1960s. A few locations had welded. Just getting into that era. MILW had about 1300 miles of 131-132, for instance, GN had 79 miles.

 

[billbtrain]

Had quite a night last night.Ice storm,whiteout snow conditions,lost power at work just before I was to get off early,back up generator didn't work,lost power at home for 6 hours.Stayed indoors where it was warm,had something to eat,had battery operated lanterns(non railroad type-sorry ),and battery op radio.Missed reading and posting to this Milwaukee Road thread.All is well now.

Have a good one.

Bill B

[billbtrain]

What size rail was on the PCE and was it welded or jointed rail?

Have a good one.

Bill B

[MichaelSol]

Is it correct to say there was no intention to re-electrify the Milwaukee, if the New MILW were to run trains?

At the time several railroads were looking at electrifying, including BN. It certainly might have looked like it at NewMil. The President of the NewMil organization was a forrmer Assistant Electrical Engineer at the MILW, and the Chairman of the organization was the President of the Montana Power/Western Energy (coal) Company but, with all that was going on, that was one idea too far -- the mix was already complex enough.

[martin.knoepfel]

Is it correct to say there was no intention to re-electrify the Milwaukee, if the New MILW were to run trains?

[MichaelSol]

I also have a question regarding that car leasing arrangement.  To recap, the Milwaukee sold much of their car fleet to financial institutions, then leased back the cars.  The purpose of this move was to raise some short term cash to ostensibly further entice the prospect of a CNW merger, but it ended up costing the Milwaukee more in the long run.

What I am wondering is this:  Did Milwaukee ever consider (or was there much opportunity to consider) having the shippers lease the car fleet?  After all, that's what the railroads today are doing, and it would have saved the Milwaukee the responsibility for the lease costs.  If need be, could they have reduced rates for shippers who provided their own cars (even if the cars in question were former Milwaukee owned cars)?  Was the pre-Staggers regulatory picture still at odds with this option?

There was a goodly amount of shipper owned cars then; they got a better rate. Evans, LP, Evergreen, Bennett Lumber, I am sure I would recall others that owned their own boxes that were frequent shippers on MILW. Of course, that was an era seeing the start of a big shift in ownership -- wth names like K-Line starting to appear on the outside of "rail" equipment, replacing the names on earlier efforts, NYC, MILW, IC.

Specialty cars tended to be shipper owned, although MILW had some specialty 160 ton depressed flat cars available for big stuff. The "general" car pool, though, was just that -- the railroad was in the best position to maximize use of a standard boxcar, whereas most shippers weren't in the business of also running a car leasing firm or trying to fill backhaul. Certainly much of what is passed off today as "efficiency" gains has simply been the cost shifting of car ownership to shippers. Whether there is an ultimate advantage to that for the railroad/shipper community in the long run depends on the railroad's attitude toward car utilization as a result. From my perspective, that separates cost from incentive and that's never an advantage in the long run.

MILW's strategy of rebuilding, selling the cars, then leasing them back was a fairly common railroad practice at the time, and took advantage of MILW's big shop facility at Milwaukee. While intuitively it seems like a poor practice, I can't offer that it was. I suppose there are arguments both ways and there certainly was a vicious cycle aspect to it that raised operating costs over the long run -- to the point that MILW was spending as much on car leasing in 1975 as the BN, a railroad three times its size.

It certainly did offer some mischief when some cars were renumbered at about the same time as some timberlands disappeared off the corporate books and everybody got into trouble. Forbes Magazine did some good investigative work, resultng in two cleverly titled articles: "No Visible Means of Support," June 15, 1975, and "The Mal-waukee Road?," July 1, 1975. They were so devastatingly accurate that CMC's corporate counsel, Ray Garrett, Jr., went home and, in his own words, "wept."

The SEC filed a formal complaint. The SEC attorneys who conducted the deposition of W.L. Smith were Sam Butler and Bill Hegan. Smith answered forthrightly and honestly, but it was clear -- to me anyway -- that the SEC lawyers didn't fully understand the significance of some of the answers. If they had, I think the investigation might have had a different outcome than the consent decree that was ultimately entered in the matter.

 

[Anonymous]

I also have a question regarding that car leasing arrangement.  To recap, the Milwaukee sold much of their car fleet to financial institutions, then leased back the cars.  The purpose of this move was to raise some short term cash to ostensibly further entice the prospect of a CNW merger, but it ended up costing the Milwaukee more in the long run.

What I am wondering is this:  Did Milwaukee ever consider (or was there much opportunity to consider) having the shippers lease the car fleet?  After all, that's what the railroads today are doing, and it would have saved the Milwaukee the responsibility for the lease costs.  If need be, could they have reduced rates for shippers who provided their own cars (even if the cars in question were former Milwaukee owned cars)?  Was the pre-Staggers regulatory picture still at odds with this option?

[Anonymous]

The PCE had a minimum 19'6" clearance throughout, with standard catenary in place. Catenary in the tunnels used up between 18" and 30" of additional clearance.

The line handled 93' autoracks on a daily basis without incident on the existing curvature.

Two 9' 6" containers stacked in a well stand 20' 2" above the rail.  So the Milwaukee's PCE, with the wire in place, would have been shut out of the container traffic without some major work.

The wire was removed in 1974.

Yes, but you've always said it should have been kept, upgraded and expanded to bridge the "gap" between the two electrfied sections.  You've also maintained that the PCE should have been rehabed and retained.

If those two things would have happened we would have had quite a useless railroad, rebuilt at taxpayer expense, when double stack came along.

The original comment was this:

billbtrain wrote:

I just happened to be thinking about double stacks this morning.Thinking about what would have to be done on the PCE to allow sufficient clearance amounting to say 18'.I'm refering to the PCE as it was in 1979,without the electrification.

Hopefully I answered that specific question, there was plenty of clearance. I guess you want to argue something different. No surprises.

The cost of raising the catenary 12" inside the tunnels was negligible, if that is the condition you wish to impose. There was plenty of room to do so, and plenty of room for double stacks.

And I am sure it could have been done at private expense. I'd guess the seven line crews could have done it in about four week's time, at a total cost of just under $100,000. Probably wouldn't sink the ship.

And it should be pointed out that if BNSF opted to re-electrify the Stevens Pass line, the same conditions would apply.  Only difference is that BNSF would get the State of Washington's taxpayers to fund it!

[MichaelSol]

The PCE had a minimum 19'6" clearance throughout, with standard catenary in place. Catenary in the tunnels used up between 18" and 30" of additional clearance.

The line handled 93' autoracks on a daily basis without incident on the existing curvature.

Two 9' 6" containers stacked in a well stand 20' 2" above the rail.  So the Milwaukee's PCE, with the wire in place, would have been shut out of the container traffic without some major work.

The wire was removed in 1974.

Yes, but you've always said it should have been kept, upgraded and expanded to bridge the "gap" between the two electrfied sections.  You've also maintained that the PCE should have been rehabed and retained.

If those two things would have happened we would have had quite a useless railroad, rebuilt at taxpayer expense, when double stack came along.

The original comment was this:

billbtrain wrote:

I just happened to be thinking about double stacks this morning.Thinking about what would have to be done on the PCE to allow sufficient clearance amounting to say 18'.I'm refering to the PCE as it was in 1979,without the electrification.

Hopefully I answered that specific question, there was plenty of clearance. I guess you want to argue something different. No surprises.

The cost of raising the catenary 12" inside the tunnels was negligible, if that is the condition you wish to impose. There was plenty of room to do so, and plenty of room for double stacks.

And I am sure it could have been done at private expense. I'd guess the seven line crews could have done it in about four week's time, at a total cost of just under $100,000. Probably wouldn't sink the ship.

Far more cheaply in any case than the nearly $200 million in taxpayer funds that were necessary to save and rehab the Illinois Central Gulf "at taxpayer expense".

And there is plenty of railroad line in the East for you to worry about that got federal assistance and can't handle double stacks. Perhaps your time would be best spent worrying about those, if double stack capacity is indeed really your current worry. Perhaps even to turn your attentions to BN's huge expenditure on the Stampede Pass, without obtaining double stack capacity.

But you can rest easy that there was nothing in that regard for you to worry about on the Milwaukee Road out West, and I am sure that will be a great relief to you, given the strength of your recent concerns about it.

 

[greyhounds]

The PCE had a minimum 19'6" clearance throughout, with standard catenary in place. Catenary in the tunnels used up between 18" and 30" of additional clearance.

The line handled 93' autoracks on a daily basis without incident on the existing curvature.

Two 9' 6" containers stacked in a well stand 20' 2" above the rail.  So the Milwaukee's PCE, with the wire in place, would have been shut out of the container traffic without some major work.

The wire was removed in 1974.

 

Yes, but you've always said it should have been kept, upgraded and expanded to bridge the "gap" between the two electrfied sections.  You've also maintained that the PCE should have been rehabed and retained.

If those two things would have happened we would have had quite a useless railroad, rebuilt at taxpayer expense, when double stack came along.

[arbfbe]

Just to answer a couple of questions.

BNSF access to the Bull Mountain coal deposits would be via a branchline east from Broadview, MT on the former GN line between Laurel and Great Falls.  Apparently there has been some grade work done in the area over the years for such a connection though no rail has been laid.

The coal is high grade metalurgical coal but it is mined underground.  Current output is trucked to the MRL at Lockwood, MT and moves west in less than trainload volumes.

The MILW was hauling automobiles in tri level autoracks under wire.  The days of the double stack container cars were a few years away yet.  If the electrification had been rebuilt I would imagine higher clearances for the double stack cars.  If the electrification had remained scrapped in the 80's (most likely scenario) then there was clearance for double stack containers or tunnel clearances could be increased where needed. 

[MichaelSol]

The PCE had a minimum 19'6" clearance throughout, with standard catenary in place. Catenary in the tunnels used up between 18" and 30" of additional clearance.

The line handled 93' autoracks on a daily basis without incident on the existing curvature.

Two 9' 6" containers stacked in a well stand 20' 2" above the rail.  So the Milwaukee's PCE, with the wire in place, would have been shut out of the container traffic without some major work.

The wire was removed in 1974.