Getting back to Murphy's original question for a moment about the business model and reasons why they build the Pacific extension:
Since I have the book, "The Milwaukee Road," by Jim Scribbins in front of me, I will post what he says were the reasons for building the Puget Sound Extension.
Scribbins says:
"As the 20th century opened, Chairman Roswell Miller and President Albert J. Earling were concerned over the 1901 acquisition of the CB&Q by the GN and the NP. The Burlington had entered St. Paul in 1886, but it did not initially draw off too much GN and NP business from the CM&StP. Loss of that interline business to and from Chicago became much more serious when the pair became full owners of the CB&Q. Then, too, the CM&StP, which had always ranked behind the North Western in handling Union Pacific freight east of Council Bluffs, saw even more interline traffic roll over the C&NW. The CM&StP felt it must have its own line to the pacific. While other routes were considered, the decision was made in 1905 to enter the Pacific Northwest."
In the last sentence of the Scribbins quote above, note he says that, "other routes were considered" to the Pacific Northwest. The August Derleth book on the Milwaukee says that one of those "other" possibilities was building a joint line to the Pacific with the C&NW. Maybe in the long run, making it a joint venture would have saved the Milwaukee Road. Seems wise to reduce risk in a big venture like that by partnering with another company, just like the way the UP and the C&NW partnered up to enter into the Powder River coal basin.
- Rails West
The Woods' book also mentioned an agreement with the C&NW, but then said that the Milwaukee's management felt that an agreement could be broken too easily, if I recall correctly. (I'll try to remember to look again over the wekeend and provide a better quote, if it's worthwhile for more accuracy to do so.)
In other words (mine), the MILW felt it needed to exclusively own and operate its track to control its own destiny - perhaps even if the result of that choice was to then doom its destiny to being financial failure 3 successive times - kind of "sowing the seeds of its own destruction", so to speak. Something kind of "Greek tragic" there, it seems to me. Too bad old Willy Shakespeare wasn't still around back then - he could have written a pretty good play around that scenario, don't you think ?
- Paul North.
Correction of sorts: The concern that "An agreement today might not be an agreement tomorrow" didn't relate to the C&NW, but rather to the possibility of making an traffic-forwarding agreement with either the Hill Lines (NP and GN, which also had the CB&Q to bypass the MILW), or the Harriman Line (UP). The concern wasn't about the C&NW per se, but instead about what was viewed as UP's unusually friendly relationship with the C&NW, and a fear that C&NW would be favored over the MILW for competitive traffic.
Rails West [snipped] Actually, the Milwaukee did originally cross the cascades over a steep route over Snoqualmie Pass for its first 5 years of operation. Photos show that line to have some extensive snow sheds. The 2+ mile tunnel was constructed (if I recall) 1912-1914, some 5 years after the original construction, and, unfortunately, that would have been during WWI-era inflation too.
The Woods also mention the temporary route over the top, and that it was better than the NP's Stampede Pass route - only some 430 ft. higher than the future tunnel. I'm sure the tunnel was expensive, but the 'stranded cost' of the temporary line would not have been over $1 million - the $234 million / 1,400 miles is about $167,000 per mile, and I'm sure it was less than 6 miles. But I doubt if WWI inflation affected the cost of that tunnel much - that War went from 1914 - 1918, starting with the surprise assassination of the Austrian Archduke Franz Ferdinand on 28 June 1914, so there wasn't much time for a build-up and mobilization that causes inflation.
And that exhausts my knowledge and willingness to speculate on this. We really need that detailed accounting to answer this one . . .
Thanks for responding with those corrections, clarifications, and supplemental information.
On page 166 of Frederick Hyde's book, "The Milwaukee Road" there is a caption that reads in part:
"In it's haste to complete a transcontinental mainline and cash in on the anticipated traffic boom, the Milwaukee cut every possible corner en route." It goes on to mention temporary uses of the BA&P in Montana, a temporary line over Snoqualmie Pass and the use of temporary timber trestles where practical.
It goes on to say all five of the big steel trestles on Snoqualmie Pass were originally built with timber and replaced by steel as time and money permitted. I think I've seen a picture (and can't find it) either in a book or on the internet of a passenger train on a timber trestle. They must not have lasted too long since most pictures I see are of steel trestles, one with a date of 1912.
The caption also says that much of the temporary line's original grade over the top later became U.S. 10, now the I-90 frontage road serving the area ski resorts. Another book says the tunnel under Snoqualmie was opened in January of 1915.
IIRC, the coast electrification was also done during the high inflation of the WW 1 era. The result was that the shorter coast electrification cost about has much as the longer Rocky Mountain electrification.
Jeff
Paul_D_North_Jr In other words (mine), the MILW felt it needed to exclusively own and operate its track to control its own destiny - perhaps even if the result of that choice was to then doom its destiny to being financial failure ... - Paul North.
In other words (mine), the MILW felt it needed to exclusively own and operate its track to control its own destiny - perhaps even if the result of that choice was to then doom its destiny to being financial failure ...
So how do we know the authors of these books weren't speculating? Did they cite evidence?
RWM
Rails West Getting back to Murphy's original question for a moment about the business model and reasons why they build the Pacific extension: Since I have the book, "The Milwaukee Road," by Jim Scribbins in front of me, I will post what he says were the reasons for building the Puget Sound Extension. Scribbins says: "As the 20th century opened, Chairman Roswell Miller and President Albert J. Earling were concerned over the 1901 acquisition of the CB&Q by the GN and the NP. The Burlington had entered St. Paul in 1886, but it did not initially draw off too much GN and NP business from the CM&StP. Loss of that interline business to and from Chicago became much more serious when the pair became full owners of the CB&Q. Then, too, the CM&StP, which had always ranked behind the North Western in handling Union Pacific freight east of Council Bluffs, saw even more interline traffic roll over the C&NW. The CM&StP felt it must have its own line to the pacific. While other routes were considered, the decision was made in 1905 to enter the Pacific Northwest." In the last sentence of the Scribbins quote above, note he says that, "other routes were considered" to the Pacific Northwest. The August Derleth book on the Milwaukee says that one of those "other" possibilities was building a joint line to the Pacific with the C&NW. Maybe in the long run, making it a joint venture would have saved the Milwaukee Road. Seems wise to reduce risk in a big venture like that by partnering with another company, just like the way the UP and the C&NW partnered up to enter into the Powder River coal basin.
I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. It seems a logical reason but we can't judge from this passage if the cars being interchanged all came from western Minnesota or Puget Sound, or whether there was 100 cars diverted to CB&Q per year or 100,000. If the cars all hied from the Red River Valley of North Dakota, it would seem a branch line or two would do the trick -- no need to back it up with an expensive and potentially empty track through Montana, Idaho, and Washington. I get uncomfortable with statements like this, that don't qualify the statement with facts, because it's very easy to provide the facts if you have them, and very powerful to do so as well. But without facts, it starts to seem like excuses.
As for Omaha, the statement seems to imply that the Milwaukee Road was hoping with its Pacific Extension to short-haul the UP on cars originating in Seattle or Tacoma. But how the UP would receive that competitive development when it came to routing decisions on all their cars originating in Oregon, Eastern Washington, Idaho, California (via CP), etc., which presumably dwarfed the cars that the Milwaukee Road wanted to market directly, is not discussed. It would seem if this was really a decision point, then the Milwaukee Road was inserting a dollar into a machine that spit out a dime.
Railway Man Rails West: Scribbins says: ... I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. ... I get uncomfortable with statements like this, that don't qualify the statement with facts, because it's very easy to provide the facts if you have them, and very powerful to do so as well. But without facts, it starts to seem like excuses. ...
Rails West: Scribbins says: ...
Scribbins says: ...
I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. ... I get uncomfortable with statements like this, that don't qualify the statement with facts, because it's very easy to provide the facts if you have them, and very powerful to do so as well. But without facts, it starts to seem like excuses. ...
Agree completely.Searching the web, I ran across a similar chronology published by the Milwaukee Road in the 1960's that also is not very good, and also not rigorous. Here is a quote:
...
However, [the CM&StP] couldn’t keep to itself through the whole period. In the late 1890’s, a fight developed. On one side were J. P. Morgan, the famous financier, and his ally, James Hill, who built the Great Northern and later also controlled the Northern Pacific. On the other side were E. H. Harriman, who controlled the Union Pacific, and his allies from the Rockefeller—Standard Oil interests. The Milwaukee was in the middle for a time, since the fight was by the Harriman group to keep Morgan/Hill out of Chicago—in fact, at one point Morgan offered to buy the Milwaukee. The battle ended when Morgan/Hill got control of the Burlington, and thereby entered Chicago.One thing this in-fighting showed the Milwaukee’s management was that its railroad needed to do some more growing, if it were to stay competitive with railroads that reached the Pacific Coast, either in California or Washington and Oregon. The Milwaukee couldn’t prosper by turning over the more profitable long-haul business to other lines.More and more, it seemed that the Milwaukee should be extended to the Pacific, although the company was divided for a time on whether it should go straight west or northwest.Director William Rockefeller, as late as 1905, still thought the line should be built to California. For a while he was seriously thinking that it should be built in cooperation with the North Western, which— like the Milwaukee — ended in Omaha.One thing that did seem clear was that the company had ample resources for extending itself, since it was soundly financed and highly respected by financial men, who considered it one of the best-run railroads in the country.By 1901, the Milwaukee had 6,596 miles of track, its farthest northwest point being Evarts, N. D., on the Missouri River.In that year, A. J. Earling, the Milwaukee’s president, sent an engineer to estimate how much it would cost to duplicate the Northern Pacific’s line to the Pacific Northwest. The engineer thought $45 million would do it.After much deliberation, the company’s decision was made: go northwest. On November 28, 1905, the board of directors voted to build the line to Seattle and Tacoma.Construction began less than a year later, jumping off from both ends and some in-between points in April, 1906. The route chosen, then estimated to cost $60 million, was to be 150 miles shorter than the combined NP/Burlington route and 80 miles shorter than the GN/ Burlington route.
Railway Man So how do we know the authors of these books weren't speculating? Did they cite evidence? RWM
So your point is well-taken. The maxim of John H. White, Jr. - former Curator of Transportation at the Smithsonian Institution, among other notable credits - bears repeating here: "The proof of good history is in its sources."*
Is it just me? I can't get any of Paul's links to work.
No, it's not just you. What I do is just "copy and paste" the entire citation "as-is" from the entry in the "Magazine Index" here, and that's exactly how it appears - but the links no longer work. Even there at the Index, those links will take you only to the cover and Table of Contents of each issue, or other entries for the same author, subject, keywords, etc. - none of them leads to the entire article. For that, you have to buy the DVD that's the subject of the thread that's 'pinned' at the top of the Forum's list of thread subjects . . .
Railway Man I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. It seems a logical reason but we can't judge from this passage if the cars being interchanged all came from western Minnesota or Puget Sound, or whether there was 100 cars diverted to CB&Q per year or 100,000. If the cars all hied from the Red River Valley of North Dakota, it would seem a branch line or two would do the trick . . . [snipped]
Then, analyzing and making sense of it feels like master's thesis-level work. All that for maybe 2 pages of text in a much larger volume ? And how much of the railfan community is going to be willing to sit still and buy the book for the recitation and exposition of those facts - and how many are going to go for the book with the many pretty pictures instead ?
Not saying it's not worthwhile - then we'd really know, and another brick would be added to the slowly-assembled structure of real human knowledge. But the time commitment, details, techniques, and costs involved, and likely limited audience for the results to be obtained, would seem to make that kind of publication more appropriate as an academic venture than a railfan-oriented one.
Paul_D_North_Jr Railway Man: I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. It seems a logical reason but we can't judge from this passage if the cars being interchanged all came from western Minnesota or Puget Sound, or whether there was 100 cars diverted to CB&Q per year or 100,000. If the cars all hied from the Red River Valley of North Dakota, it would seem a branch line or two would do the trick . . . [snipped] Yes, that would be great - but: Does that data even exist ? Would it have been collected and reported back then ? Are we 'setting the bar' or standard of proof so high here that it's practically impossible to meet ? Then, analyzing and making sense of it feels like master's thesis-level work. All that for maybe 2 pages of text in a much larger volume ? And how much of the railfan community is going to be willing to sit still and buy the book for the recitation and exposition of those facts - and how many are going to go for the book with the many pretty pictures instead ? Not saying it's not worthwhile - then we'd really know, and another brick would be added to the slowly-assembled structure of real human knowledge. But the time commitment, details, techniques, and costs involved, and likely limited audience for the results to be obtained, would seem to make that kind of publication more appropriate as an academic venture than a railfan-oriented one. - Paul North.
Railway Man: I'd feel some comfort according value to this quote if it was accompanied by some numbers showing interline carloads through the gateways by carrier pair for the years in question, and origin stations for the cars. It seems a logical reason but we can't judge from this passage if the cars being interchanged all came from western Minnesota or Puget Sound, or whether there was 100 cars diverted to CB&Q per year or 100,000. If the cars all hied from the Red River Valley of North Dakota, it would seem a branch line or two would do the trick . . . [snipped]
Yes, that would be great - but: Does that data even exist ? Would it have been collected and reported back then ? Are we 'setting the bar' or standard of proof so high here that it's practically impossible to meet ?
Often this data does exist. Some railroads scrupulously saved records and turned it over to libraries -- the CB&Q, for example. Interline data was collected by the ICC. While much of this was destroyed when the ICC sunseted, that relating to rate cases typically is around somewhere. I'd start with the ICC Finance dockets and the Newberry Library.
Certainly, it takes work to do research. What doesn't! I suppose it comes down to how the author wants to be received. For a key point such as why the railroad that is one's beloved was even built, you'd think someone seriously enamored with the Milwaukee Road would want to drive a wood stake through the heart of skeptics like me who ask if the decision might have had nothing behind it but ego and incompetence.
All the Trans-con lines had a bigger helping of personal egos than they had for a actual business plan. With only a business plan....none of them would have been built.....especially if the decision making process that is in place today were in place then.
Never too old to have a happy childhood!
greyhounds I believe the Milwaukee Road Pacific Coast Extension was built to gain entrance to a government sanctioned and enforced railroad cartel. The original "St. Paul", later the "Milwaukee", had made a good return to investors by linking the northern transcons, which terminated at St. Paul, with Chicago and eastern connections. In this situation, the St. Paul was a profitable part of the cartel. When those two northern transcons bought the CB&Q and their own route to ChiTown, the St. Paul had a problem. They would get cut out. What to do? They decided to build on out to Seattle and get cut back in to the cartel. The government had a really bad idea that the right thing to do was to enforce rail rate levels that allowed the weakest, least efficient, railroad serving an origin-destination pair to be financially successful. So there was little percieved risk. The government would enforce prices that would make the PCE finacially successful. Heck fire, why not build it! The government would see to it that the general population would suffer and bear the cost of excess rail capacity. It wasn't the first rail line to be built to gain entrance to a cartel, and it probably wasn't the last. (A cartel uses too many economic resources, such as railroad capacity, to produce a given economic output. A monopoly uses too few. Niether one is desireable.) But the government lost control of the cartel soon after the PCE was built as motor freight developed. A knowledgeable, enlightened government (I know, dream on) would never have enforced the cartel. Just let the market forces work and the public would have been generally better off. But then, the likes of one Joseph B. Eastman wouldn't have enjoyed his exhaulted government job in that case. More on him later. I've just ordered his 1952 biography from an Amazon dealer.
I believe the Milwaukee Road Pacific Coast Extension was built to gain entrance to a government sanctioned and enforced railroad cartel.
The original "St. Paul", later the "Milwaukee", had made a good return to investors by linking the northern transcons, which terminated at St. Paul, with Chicago and eastern connections. In this situation, the St. Paul was a profitable part of the cartel.
When those two northern transcons bought the CB&Q and their own route to ChiTown, the St. Paul had a problem. They would get cut out. What to do?
They decided to build on out to Seattle and get cut back in to the cartel. The government had a really bad idea that the right thing to do was to enforce rail rate levels that allowed the weakest, least efficient, railroad serving an origin-destination pair to be financially successful. So there was little percieved risk. The government would enforce prices that would make the PCE finacially successful. Heck fire, why not build it! The government would see to it that the general population would suffer and bear the cost of excess rail capacity.
It wasn't the first rail line to be built to gain entrance to a cartel, and it probably wasn't the last. (A cartel uses too many economic resources, such as railroad capacity, to produce a given economic output. A monopoly uses too few. Niether one is desireable.)
But the government lost control of the cartel soon after the PCE was built as motor freight developed. A knowledgeable, enlightened government (I know, dream on) would never have enforced the cartel. Just let the market forces work and the public would have been generally better off. But then, the likes of one Joseph B. Eastman wouldn't have enjoyed his exhaulted government job in that case.
More on him later. I've just ordered his 1952 biography from an Amazon dealer.
This is a very interesting explanation, and could well be what the MILW was thinking when they decided to build the line. After all, this strategy was responsible for much of the overbuilding of the granger railroads, including MILW, so MILW was no stranger to it.
But it doesn't explain why the enterprise failed as early as 1925. The effect of the Transportation Act of 1920 was initially to strengthen the cartel-like structure of railroading at the time - the philosophy behind it was to turn the RR's into a govenrment regulated cartel. It's certainly true that this was eventually eroded by the growth of motor carriage (something the ICC didn't recognize for decades). But, motor carriage in the PCE's service territory wouldn't have been a big factor by 1925 or even by the mid 30's, so I don't think this can expain the first two MILW bankruptcies
Interesting discussion, for some of you that are unaware, Micheal Sol has created quite an online archive of the Milwaukee Road, and one can spend years years reading actual Milwaukee Road transcripts. I would suggest starting with this rather large valuation study on the PCE, mile per mile. Somewhere on this site you should be able to find some factual numbers, but the question may still go unanswered.
"The true sign of intelligence is not knowledge but imagination."-Albert Einstein
http://gearedsteam.blogspot.com/
Our community is FREE to join. To participate you must either login or register for an account.