Murphy Siding Pretend it's spring already. Pretend that I'm transplanting this topic from another thread. The 1880's engineering thread is spreading into several interesting directions, each of which is interesting to me. I thought I'd try to narrow the focus on part of it. with out taking away from the whole- starting with this post: The gist of the post, is about the location of rail lines. As I read it, location is about the decision, and execution of a railroad company to build a line into an area. The alignment, where the actual tracks get laid down, being something entirely different. From that, pops up a few questions: Why did the Milwaukee decide to go to Puget sound? A similar thought surrounds the time when railroads were expanding west. My town was served by 5 railroads at one time. Local railroad boosters put up money and land to lure several of them here. I can understand being the first railroad into what may become a prosperous farm town. And, maybe the 2nd. What about the 3rd, 4th, and 5th? Did they all sit, and reason out the possibilites, before heading for Sioux Falls, Dakota Terrritory. What effect did *booster* type groups have on railroad location? Did the copper mine in Butte, Montana, fall into the same category as the boosters?
Pretend it's spring already. Pretend that I'm transplanting this topic from another thread. The 1880's engineering thread is spreading into several interesting directions, each of which is interesting to me. I thought I'd try to narrow the focus on part of it. with out taking away from the whole- starting with this post:
The gist of the post, is about the location of rail lines. As I read it, location is about the decision, and execution of a railroad company to build a line into an area. The alignment, where the actual tracks get laid down, being something entirely different.
From that, pops up a few questions: Why did the Milwaukee decide to go to Puget sound? A similar thought surrounds the time when railroads were expanding west.
My town was served by 5 railroads at one time. Local railroad boosters put up money and land to lure several of them here. I can understand being the first railroad into what may become a prosperous farm town. And, maybe the 2nd. What about the 3rd, 4th, and 5th? Did they all sit, and reason out the possibilites, before heading for Sioux Falls, Dakota Terrritory. What effect did *booster* type groups have on railroad location? Did the copper mine in Butte, Montana, fall into the same category as the boosters?
Pretend it's spring? What's a spring? Isn't it going to be cold and dark forever? Seems like it already has been.
US railroads were overbuilt as in five rail lines to Sioux Falls, SD. I know of two reasons. First, the railroads organized themselves into cartels. A cartel will use to many resources (five ways to Sioux Falls) to produce a level of output. A railroad could build into Sioux Falls knowing that it would become part of the cartel and that the cartel would set the freight rates high enough so that everyone would make money. There seemed to be little risk and a guaranteed profit. Some railroads were built just to get into the cartels, even when the other lines were adequate to handle the traffic.
Of course, the cartels proved unstable. Some line would always cheat. So, in the 1880's the railroads sought a governent sanctioned cartel known as the Interstate Commerce Commission. This was to have disasterous results decades latter for the railroads when trucking developed outside the government's rail cartel and the ICC blocked the railroads from reducing rates to compete with the truckers.
Second, much of the investment made in constructing a rail line is largely "sunk". You can't get it out. Examples are grading, cuts, fills, tunnels, bridges, etc. A trucking company can just redeploy its vehicles elsewhere. That rail line structure isn't going anywhere. That made it difficult for a railroad to leave a market once it had entered a market. So even if a company became disastisfied with the money it made serving Sioux Falls, there was no way to take up the investment and move it elsewhere. So the number of rail lines serving a location tended to go up, not down.
All this fell apart when truckers broke the rail cartel for good. (They were not being nice, they tried very hard to establish their own cartels.) Given the diminished volumes of rail shipments the cartels could not set rail rates high enough to cover everyones' costs and only the strong survivied. Which is how it should have been in the first place.
As to the Milwaukee Road PCE (chills now run up and down my spine). The Milwaukee (or the St. Paul) had been the major bridge carrier between Chicago and the Twin Cities. When the GN and NP bought the Burlington that status was threatened. The Milwaukee could have seen little risk in building to Puget Sound - after all, they would become part of a cartel and enjoy traffic at rates set so they could make money. They did this just years ahead of paved roads and the initial crumbling of the rail cartel. They also had a real problem in that the railroads of that era depended greatly on short haul local traffic. The territorry the Milwaukee built through never developed enough to produce significant local business. Want one more strike? Seattle/Tacoma wasn't that big of a deal as a port until relatively recently. The pie they were trying to get a piece of wasn't that big.
Spring? You can have it. Give us winter back and the moisture that comes with it. Most effective fire suppressent around.
Cedar Rapids, Iowa Falls & Northwestern (Burlington, Cedar Rapids & Northern / controlled by CRIP sine 1881) wandered into your fair burg in 1886 in search of interchange, river terminal facilities and industries and later as access to them thar goldfields. They were a totally speculative railroad that wanted to serve ag communities with a desire to be on a main line or with two railroads to break up a monopoly on service by CB&Q and the Omaha Road. As one granger too many, it got broken up between CB&Q and CRIP in the end (1902). Your end of the railroad joined the railroad that went everywhere the hard way and mostly died with it in 1972-1980.(Some more of it died in 2008 - IANW after another of those starving grangers owned it, namely C&NW)
Re: Milwaukee's PCE
One of the reasons that the Milwaukee built the PCE was to give Anaconda Copper another rail line into Butte and Anaconda to compete with the NP. Several members of the Milwaukee board were also members of Anaconda's board and probably had a significant conflict of interest in approving the extension.
The extension from Morbridge to Harlowtown was nicely engineered, with a couple of excpections the grades were 0.5% or lower, very few curves sharper than 3 degrees. This is especially evident comparing the alignment of the Milwaukee with the NP between Forsythe and Terry.
mudchicken Spring? You can have it. Give us winter back and the moisture that comes with it. Most effective fire suppressent around. Cedar Rapids, Iowa Falls & Northwestern (Burlington, Cedar Rapids & Northern / controlled by CRIP sine 1881) wandered into your fair burg in 1886 in search of interchange, river terminal facilities and industries and later as access to them thar goldfields. They were a totally speculative railroad. that wanted to serve ag communities with a desire to be on a main line or with two railroads to break up a monopoly on service by CB&Q and the Omaha Road. As one granger too many, it got broken up between CB&Q and CRIP in the end (1902). Your end of the railroad joined the railroad that went everywhere the hard way and mostly died with it in 1972-1980.(Some more of it died in 2008 - IANW after another of those starving grangers owned it, namely C&NW)
Cedar Rapids, Iowa Falls & Northwestern (Burlington, Cedar Rapids & Northern / controlled by CRIP sine 1881) wandered into your fair burg in 1886 in search of interchange, river terminal facilities and industries and later as access to them thar goldfields. They were a totally speculative railroad. that wanted to serve ag communities with a desire to be on a main line or with two railroads to break up a monopoly on service by CB&Q and the Omaha Road. As one granger too many, it got broken up between CB&Q and CRIP in the end (1902). Your end of the railroad joined the railroad that went everywhere the hard way and mostly died with it in 1972-1980.(Some more of it died in 2008 - IANW after another of those starving grangers owned it, namely C&NW)
* Speculative railroad* kind of runs counter to RWM's idea of a railroad checking everything out before building the right sized railroad into the right area. Were they speculative, in that they wanted to get into a new area to cash in on someone else's lucrative traffic, or tspeculative, in that they wanted to build up the business and sell the railroad at a high price.
Thanks to Chris / CopCarSS for my avatar.
Not as counter to RWM's point of view as you seem to think. At the time CRIF&NW was built, the breadbasket was wide open to competition and Iowa seemed to be in the way of where everybody wanted to go. They got part of what they wanted by having CRIP buy a large part of their investment so they could play keep-away and influence traffic to a degree.
Overlooked in this thread is the reason for the line. Is the reason the line is being built to reach a mine or a manufacturing plant or something else in particular or is it to move trains through an area non stop. Thus lines like W. Va mine spur or a grain country track were laid to reach a specific on line location. And the lines like Lackawanna's Cut Offs and the Milwaukee Road main were to move trains over a segment. So it would follow that one might put up with a little more grade or even go around rather than through when reaching for a short destination. And it would also follow that one would fill in or bore through to get as straight a lin or as level a gradient when bulding a cut off or speedy,high density main line. And in the long run, yes, pre 1900 was more likely built to get a line into a place not fully cognizant of being a part of a "super" mainline. It's easy to pick it all apart this far away in time.
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Some thoughts on the rationale for the CMSt.P&P "Pacific Extension" question:
1) [Gulp ] Search this forum for "PCE" and/ or posts by "MichaelSol". Up until a few months ago, he was a pretty prolific poster here, and was always quick to defend the PCE, at least in its later/ pre-abandonment stage. He may have said something about its genesis as well;
2) What do Charles & Dorothy Wood say in their 1960's (?) mostly picture & captions book, The Milwaukee Road ? (Superior Press, I think) I know that's not prime source history material, but they- and their sources - were about 40 years closer to it than we are now;
3) Someplace I read recently that "There are 2 reasons why a man does something - a good reason, and the real reason." I suspect that's the case here. That long ago, we may never be able to discern or know the "real" reasons;
4) Nevertheless, going at least as far as the Montana copper mines maybe makes sense. But why continue on through the worst of the Rockies ? It was pretty much virgin territory back then - maybe there was some thought that it would be developed and traffic sources would appear in the future ? What did the articles in Railway Gazette ( the Railway Age of the time) say about it ? Did any of the Milwaukee Road board members have ranches, minable lands, timber land, other land holdings, water rights, or hydro-power rights, etc. which would have benefitted from the PCE as well ? Corruption or conspiracy theorists, unite ! (never mind the inherent contradiction or hypocrisy in that last thought)
5) George W. Hilton wrote several articles in Trains in the 1960s about the cartels, the ICC, why railroads didn't compete, and why they overbuilt. I think the cartel explanation offered above is essentially complete, but reviewing what Hilton wrote might provide some additional insights and nuances;
6) Wouldn't the R&LHS or the NRHS have published articles on this ? And while those may be based on "sanitized" sources, there must have been a few college papers or professor-level business or history articles from the Pacific Northwest schools and universities that took a look at this as well - it's too good an opportunity to pass up, even if only in the vein of "Paradise Lost" or "Enterprise Denied" or the like.
- Paul North.
henry6 . And in the long run, yes, pre 1900 was more likely built to get a line into a place not fully cognizant of being a part of a "super" mainline. It's easy to pick it all apart this far away in time.
. And in the long run, yes, pre 1900 was more likely built to get a line into a place not fully cognizant of being a part of a "super" mainline. It's easy to pick it all apart this far away in time.
Murphy Siding The gist of the post, is about the location of rail lines. As I read it, location is about the decision, and execution of a railroad company to build a line into an area. The alignment, where the actual tracks get laid down, being something entirely different. From that, pops up a few questions: Why did the Milwaukee decide to go to Puget sound? A similar thought surrounds the time when railroads were expanding west. My town was served by 5 railroads at one time. Local railroad boosters put up money and land to lure several of them here. I can understand being the first railroad into what may become a prosperous farm town. And, maybe the 2nd. What about the 3rd, 4th, and 5th? Did they all sit, and reason out the possibilites, before heading for Sioux Falls, Dakota Terrritory. What effect did *booster* type groups have on railroad location? Did the copper mine in Butte, Montana, fall into the same category as the boosters?
Murphy: A clarification that is crucial to this discussion. What Wellington said is this: "Alignment is a detail of location." To elaborate, alignment isn't something you work out after you decide on location, it's something you use to inform your location, i.e., alignment appears iteratively during the process of choosing the location. What Wellington argued is that too often the cart was before the horse: alignment was worked out but the goal of the alignment often remained unexamined or misunderstood. This is a classic error that is also common today (especially in resource-based economies such as the oil states), where projects are conceived, designed, funded, and built, and only afterward is their purpose and need considered!
That said, onto your example. The example you discussed is examined in depth in three books, all by the same author, Julius Grodinsky, in "Transcontinental Railway Strategy, 1869-1893," "The Iowa Pool, a Study in Railroad Competition, 1870-84" and "Jay Gould -- His Business Career, 1867-1892". You would be vastly better off reading his books than reading this forum as all I can at best do is offer up a poor gruel of his logic and economic analysis. Wellington's and Vance's works are in harmony with Grodinsky, so read as a package you gain a Ph.D. comprehension of how railways got built, financed, operated, and the effects they had on the nation and the nation on them. (There are alternative points of view but they do not enjoy a large number of adherents except on what appears to me the lunatic fringe both right and left.)
Grodinsky's central argument is that railways west of Chicago had one burden that overwhelmed all others and one goal that trumped all others: an extreme lack of capital, and the need to command the territory. Brilliant financiers such as Gould, Huntington, Forbes and Joy grasped the capability of a railway system to create enormous wealth, that the means of that capability was market dominance in a territory, but only if the system could control the territory. But the extreme lack of capital meant that even if one saw the opportunity, it was almost always beyond one's reach because there was no ability to beg or borrow the money required to sieze the opportunity. As a result, construction was not systematic nor was it apparent who would win the territorial competitions, because even the best-financed systems went through terrible financing crises. This encouraged the amateurs, the theives, and the overconfident to try their hand at the game. And the outcome was that during times when money was cheap, a spasm of furious building occurred as everyone tried to grab as much territory as possible, including vast overlaps of the competitors in an effort to chop into pieces their territorial control, slashing rates, and starving them out.
The end-game of the overlap strategy was the premise that territorial competition would quickly result in strong and weak systems, the expectation that the inferior competitor would eventually recognize his gambit had failed, would sell out to the superior competitor, and quit the field. No railway system ever, for one second, envisioned the future that actually transpired, where everyone, strong and weak alike, would all remain on the field of battle for the long term! Nor did they envision that all of track they built in order to command territory would be permanent -- they assumed that once the strategy was complete, at a tactical level a great deal of the duplicate plant would be removed. Gould, Huntington, Forbes, Joy, et al., calculated that the strategic battle would quickly sort out a few or even just one big winner and everyone else would be forgotten even to historians.
The railway builders did not forsee that the body politic would not leave them be, and did not forsee the body politic would force onto them a negotiated compromise that would stop the battle and freeze every railway in position like a bug in amber. This sudden interest of the public in the affairs of railways was catalyzed by the overreach of Gould, et al., who did not fully appreciate their role in creating the populist trend in politics that appeared in their era, but the real agent of action was the owners of inferior railways who faced with financial ruin at the hands of the superior railways chose to invite the public into their boardrooms and dictate terms of compromise onto all. It was a fantastically cynical and selfish decision to manipulate the public into protecting the few at the expense of the many. The true intent of the designers of railway regulation (the ones pulling the levers behind the scenes) was to protect the assets of stockholders in inferior railways. They succeeded at their goal spectacularly, and it cost the nation dearly by forcing the nation to subsidize a vast excess of railroad plant and a vast dispersion of industry, commerce, and production to places made feasible only by the artificially low railway rates subsidized by their more geographically advantaged competitors.
One could argue that a benefit of railway regulation is that it improved quality of life by enabling people to make a living in places like Sioux Falls instead of, oh, just to pick an example, Chicago, and in a democracy the majority has the right to determine what constitutes quality of life. But if that was the goal and not a consequence, we should have articulated it and paid for it on its own merits and not back-doored it through an expensive railway regulatory scheme. Greyhounds and I are sometimes polar opposites on matters of politics but I think we are in agreement that railway regulation had as its primary beneficiary not the public but the stockholder of certain companies, it turned fair economic competition on its head, it prematurely exhausted resources and the environment, and it destroyed trillions of dollars of wealth.
Sioux Falls is a classic minor articulation point where each railway company built to and through in an effort to sap the strength of its competitors. The thought process had little to do with Sioux Falls as some sort of unique destination; to the railways Sioux Falls looked the same as other minor midwestern articulations such as Mason City, Iowa, or Mankato, Minnesota.
Booster groups had only small influence on railroad decision-making at the level of a Sioux Falls. The railways were grateful for any free cash or land, and the lack of a booster group would imply that the commercial prospects of the city were uninteresting, but these groups did not command enough cash to bend a railway to their will.
RWM
Murphy Siding Not meant to pick it all apart, meant to get a better understanding of what happened and why. If you took me the wrong way on that, I appologize.
Not meant to pick it all apart, meant to get a better understanding of what happened and why. If you took me the wrong way on that, I appologize.
No apology necessary...I was just keying topic thoughts off the top my head.
Paul_D_North_JrSome thoughts on the rationale for the CMSt.P&P "Pacific Extension" question: 1) [Gulp ] Search this forum for "PCE" and/ or posts by "MichaelSol". Up until a few months ago, he was a pretty prolific poster here, and was always quick to defend the PCE, at least in its later/ pre-abandonment stage. He may have said something about its genesis as well; 2) What do Charles & Dorothy Wood say in their 1960's (?) mostly picture & captions book, The Milwaukee Road ? (Superior Press, I think) I know that's not prime source history material, but they- and their sources - were about 40 years closer to it than we are now; 3) Someplace I read recently that "There are 2 reasons why a man does something - a good reason, and the real reason." I suspect that's the case here. That long ago, we may never be able to discern or know the "real" reasons; 4) Nevertheless, going at least as far as the Montana copper mines maybe makes sense. But why continue on through the worst of the Rockies ? It was pretty much virgin territory back then - maybe there was some thought that it would be developed and traffic sources would appear in the future ? What did the articles in Railway Gazette ( the Railway Age of the time) say about it ? Did any of the Milwaukee Road board members have ranches, minable lands, timber land, other land holdings, water rights, or hydro-power rights, etc. which would have benefitted from the PCE as well ? Corruption or conspiracy theorists, unite ! (never mind the inherent contradiction or hypocrisy in that last thought) 5) George W. Hilton wrote several articles in Trains in the 1960s about the cartels, the ICC, why railroads didn't compete, and why they overbuilt. I think the cartel explanation offered above is essentially complete, but reviewing what Hilton wrote might provide some additional insights and nuances; 6) Wouldn't the R&LHS or the NRHS have published articles on this ? And while those may be based on "sanitized" sources, there must have been a few college papers or professor-level business or history articles from the Pacific Northwest schools and universities that took a look at this as well - it's too good an opportunity to pass up, even if only in the vein of "Paradise Lost" or "Enterprise Denied" or the like. - Paul North.
Paul, you really, really, need to read Vance. All your questions will be answered in about 4 minutes. For the love of God don't expect to find truth about the Milwaukee Road Puget Sound Extension in this forum, because the discussion is religious in character.
Railway Man Paul, you really, really, need to read Vance. All your questions will be answered in about 4 minutes. For the love of God don't expect to find truth about the Milwaukee Road Puget Sound Extension in this forum, because the discussion is religious in character. RWM
RWM -
My questions above were more rhetorical than personal - I was mainly trying to get back to and focus some possible avenues of inquiry to address the question(s) first presented by Murphy Siding re: the PCE in his original post to this thread (above) - plus I'm a little curious myself. That said -
Your strong recommendation on Vance is noted - messages received and acknowledged ! "WILCO" (didn't mean to trouble you to have to write it again, I knew the good advice when I saw it the first time) In the meantime, I've found out that there are no less than 55 libraries here in Pennsylvania that are reported to have it -
http://205.247.101.11/search~S1?/aVance/avance/101%2C307%2C3355%2CE/frameset&FF=avance+james+e&11%2C%2C13
- the closest of which is Allentown's Public Library, which is not too far off my way home tonight.
LOL on the second part - that sums it up pretty well, I think.
Thanks again !
Railway Man Murphy: A clarification that is crucial to this discussion. What Wellington said is this: "Alignment is a detail of location." To elaborate, alignment isn't something you work out after you decide on location, it's something you use to inform your location, i.e., alignment appears iteratively during the process of choosing the location. What Wellington argued is that too often the cart was before the horse: alignment was worked out but the goal of the alignment often remained unexamined or misunderstood. This is a classic error that is also common today (especially in resource-based economies such as the oil states), where projects are conceived, designed, funded, and built, and only afterward is their purpose and need considered! [snips & emphasis added - PDN.] RWM
[snips & emphasis added - PDN.]
Not to get too caught up in the semantics here, but for the non-professionals - particularly in this technological age - I'd also use the synonym "interactive" to provide a better sense of the relationship between location and alignment and the process of working them out, in the messy real world mix of geography, politics, economics, technology, finance, personalities, etc. that in which we live - none of that "In a perfect world, we would . . . " hypotheticals here !
"Iteratively" I heard early and often in engineering school. "Inform" - in the sense of being an "input to" - I never heard that application until I started working closely with a couple of sophisticated architects a few years ago.
What it all means is that we should try to choose select the means - alignment - that's appropriate for the intended end - the business and traffic of the location - and as well, make sure that the location is suitable for and worthy of the means - the alignment - that will be needed. They should not be considered in an idealized world or in a vaccum completely independent, ignorant, and unrelated to each other.
Murphy,
The Milwaukee Road(then the St Paul Road) had built a quite extensive granger network in the Midwest. They realized two things:
A 3rd factor was basic 'I want to control my own railroad'. They could see that they were not the 'Super Grainger' and would be bought out at some time(and control would be moved out of the local area). The answer was to build the 'Pacific Extension'. The line had several issues:
They took a gamble and it did not pay off. Had they not built it, maybe they could have sold their Midwest lines for top dollar - Who knows. That is 'History'.....
Jim
Modeling BNSF and Milwaukee Road in SW Wisconsin
"All your questions will be answered in about 4 minutes. For the love of God don't expect to find truth about the Milwaukee Road Puget Sound Extension in this forum, because the discussion is religious in character.
RWM"
But RWM, are you not referring to all discussions involving railroads and railfans and not just the MLW PSE? That's indeed why the internet was founded!!!!
I have absorbed a great number of points on this forum regarding the advisability of Milwaukee Road Pacific Extension, so I am surprised to learn that the matter can be settled in four minutes of reading Vance. Can somebody sum up the conclusions reached in these four minutes? I would like to put the matter to rest.
I can sum Vance. I'd like to go further but that would be plagiarism. I do you a disservice because I cannot write with the elegance or sweep of Vance. So here goes:
The Panama Canal is not an excuse. The Panama Canal made traffic move only that never would have moved by rail. Other railways that should have been affected by the Panama Canal did not go bankrupt (SP, UP, GN, NP, and Santa Fe).Electrification dug the grave deeper Capital cost could not be recovered.
Branch lines were not considered until too late. Extensions such as Great Falls were horribly expensive and, once again, had to share the traffic with others already there and already more advantageously placed with the customers' already existing facilities.
This last point is crucial. The Milwaukee Road could not just jam its tracks into the shippers' facilities but needed the shippers to come to its tracks, which the shippers, having just a few years prior built facilities on the Brand X railways, were fairly loath to do.
An analogy would be this. Suppose you rent a house. It's not a mansion perhaps, but it does your family fine. You look out your front door one morning and a builder has built a new house right across the street! You look it over carefully, and while the paint color is different it otherwise looks mostly just like yours. The builder walks over and says, "Hello! I'd like you to live in my house."
"That's interesting," you reply, "but is the rent of your house cheaper?"
"No, actually it's the same."
"Is your house more roomy?"
"No, it's the same size."
"I am moved into my house, we've arranged the furniture and bought rugs that fit the rooms and unpacked the boxes and put everything away. Will you help us buy new rugs that fit your house's rooms, move us over, and make it all seamless so I go to work one morning from my old house and come home to the new, and nothing has changed but the driveway I pull into?"
"No."
<You can fill in your response here, and if you're the sort of person who would be yelling, "Marge, pack up! We're moving!" I will be sending you some interesting financial opportunities from my friend the Nigerian banker.>
Railway Man .....................The end-game ................................ No railway system ever, for one second, envisioned the future that actually transpired, where they would all remain on the field of battle for the long term! Nor did they envision that all of track they built in order to command territory would be permanent -- they assumed that once the strategy was complete, at a tactical level a great deal of the duplicate plant would be removed. The presumption of Gould, Huntington, Forbes, Joy, et al., was that the strategic battle would quickly find one big winner and everyone else would be forgotten even to historians. The railway builders did not forsee that the body politic would not leave them be, and did not forsee the body politic would force onto them a negotiated compromise that would stop the battle and freeze every railway in position like a bug in amber. ............................ RWM
.....................The end-game ................................ No railway system ever, for one second, envisioned the future that actually transpired, where they would all remain on the field of battle for the long term! Nor did they envision that all of track they built in order to command territory would be permanent -- they assumed that once the strategy was complete, at a tactical level a great deal of the duplicate plant would be removed. The presumption of Gould, Huntington, Forbes, Joy, et al., was that the strategic battle would quickly find one big winner and everyone else would be forgotten even to historians.
The railway builders did not forsee that the body politic would not leave them be, and did not forsee the body politic would force onto them a negotiated compromise that would stop the battle and freeze every railway in position like a bug in amber. ............................
Maybe the reason that I seem to be thick as a brick sometimes, is that I'm always thinking there must be simple answers out there, to what in reality are complex questions. Railroad history is no different than any other history, I suppose. It's complicted, interesting, and generally written from an opinionated point of view. At least it's not full of obscure French phrases, like most books on European history.
Murphy SidingRailway Man .....................The end-game ................................ No railway system ever, for one second, envisioned the future that actually transpired, where they would all remain on the field of battle for the long term! Nor did they envision that all of track they built in order to command territory would be permanent -- they assumed that once the strategy was complete, at a tactical level a great deal of the duplicate plant would be removed. The presumption of Gould, Huntington, Forbes, Joy, et al., was that the strategic battle would quickly find one big winner and everyone else would be forgotten even to historians. The railway builders did not forsee that the body politic would not leave them be, and did not forsee the body politic would force onto them a negotiated compromise that would stop the battle and freeze every railway in position like a bug in amber. ............................ RWM That has some really eerie similarities to the Western Front in 1914/15. Maybe the reason that I seem to be thick as a brick sometimes, is that I'm always thinking there must be simple answers out there, to what in reality are complex questions. Railroad history is no different than any other history, I suppose. It's complicted, interesting, and generally written from an opinionated point of view. At least it's not full of obscure French phrases, like most books on European history.
So what's wrong with obscure French phrases! Some of my favorites are:
Deck zee halls with hugs and keeses! La la la la la la la la la!
Thees ees my first affair so please be kind.
Come to me, my melon baby collie.
I must find out what zees 'pew' means every time I appear.
But more seriously, it's interesting how few people cotton onto the fact that three of the greatest railwaymen ever, C.P., Huntington, J.J. Hill and E.H. Harriman -- three men who fully grasped the nature of the opportunity and the technology and means to realize it -- did not grow up in the service. They were storekeepers and a stock broker. It would seem that perhaps the secrets to success in railways was not one's knowledge of tie spacing and tractive effort (though all became expert in details) but in more fundamental skills such as clear-thinking, knowledge of human behavior, and knowledge of how power works or doesn't work. In other words Robert E. Lee and Ulysses Grant would have been good railwaymen, and conversely great railwaymen made great military men, too.
Railway ManI can sum Vance. I'd like to go further but that would be plagiarism. I do you a disservice because I cannot write with the elegance or sweep of Vance. So here goes:Locational analysis apparently not performedNo traffic base not already adequately served by othersNo significant service advantageNo significant operating cost advantageNo significant interline connection advantagesToo much track through too much sterile territory.
A minor nitpick - these are reasons why the Milwaukee PCE shouldn't have been built, but I believe the original question was why it was built in the first place despite the challenges described by Vance (FWIW, I bought a copy of his book shortly after it hit the bookshelves).
Stan Johnson's book, The Milwaukee Road's Western Extension, does cover the overlap in directorship between Anaconda Copper and the Milwaukee as one of the reasons why construction was approved. This overlap was also a reason for the electrification as it was a consumer of large amounts of copper (something near and dear to the hearts of the ACM stockholders, but not necessarily to the Milwaukee stockholders).
[N.B. I'm treating why a line was/wasn't built as being distinct from the question whether the line should/shouldn't have been built.]
Let's say I'm a time traveler back in the 1860's. My job is to choose the route for the Union Pacific. President Lincoln has already decided I will take the "central route" beginning in Omaha.
I dig out the works of the Army surveyors and perhaps do some of my own on the ground observation. I note that I'm going to build through almost entirely empty country until I meet the Central Pacific coming east.
There is one exception to "entirely empty country" -- Salt Lake City. My location decision becomes to go north around the lake, meet the CP near Ogden and serve Salt Lake with a branch line.
I've never understood why I didn't just go south around the lake to begin with.
jrbernier They took a gamble and it did not pay off. Had they not built it, maybe they could have sold their Midwest lines for top dollar - Who knows. That is 'History'..... Jim
And therein lies the difference in attitude, aptitude, and approach to business (and railroading in particular) between the late 19th Century and today. They were gamblers, they had to be gamblers. They were also visionaries and dreamers because there was nothing but unpopulated empty land or untapped resources out there. With religious fervor they were want to push the American way from east to west and hope to make a buck along the way; they knew there were no sure shots, no immediate 100% return on investment, no one to bail them out if they made a mistake. That is what we admire about our country and forefathers. It is what is lacking in the approach to business and investment today. Today, investors and thier generals do not lose no matter what the outcome of their decisions and actions. So in many ways we are comparing apples (19th Century) to oranges (20th Century) to pears (21st Century) when speaking of railroad building and investment.
henry6Today, investors and thier generals do not lose no matter what the outcome of their decisions and actions.
Could you clarify whether you mean that to apply as the most likely outcome, or just as an occasional aberration?
I assume you mean the former because you are comparing business outcomes of yesterday to those of today, so each one would have to be the overall trend in order for such a comparison to be meaningful.
Dakguy201 Let's say I'm a time traveler back in the 1860's. My job is to choose the route for the Union Pacific. President Lincoln has already decided I will take the "central route" beginning in Omaha. I dig out the works of the Army surveyors and perhaps do some of my own on the ground observation. I note that I'm going to build through almost entirely empty country until I meet the Central Pacific coming east. There is one exception to "entirely empty country" -- Salt Lake City. My location decision becomes to go north around the lake, meet the CP near Ogden and serve Salt Lake with a branch line. I've never understood why I didn't just go south around the lake to begin with.
I wonder, if the determination to go north around the lake was made by Central Pacific, whose route came in from the north west, heading toward Ogden? It seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west.
Murphy Siding Dakguy201 Let's say I'm a time traveler back in the 1860's. My job is to choose the route for the Union Pacific. President Lincoln has already decided I will take the "central route" beginning in Omaha. I dig out the works of the Army surveyors and perhaps do some of my own on the ground observation. I note that I'm going to build through almost entirely empty country until I meet the Central Pacific coming east. There is one exception to "entirely empty country" -- Salt Lake City. My location decision becomes to go north around the lake, meet the CP near Ogden and serve Salt Lake with a branch line. I've never understood why I didn't just go south around the lake to begin with. The answer to that *might* have been, at least partly, in a post on the 1880's engineering thread. It mentioned the WP line that ran on the south side of the lake as having problems with unstable ground/slides(?) and the lake trying to swallow the line in wet years. I wonder, if the determination to go north around the lake was made by Central Pacific, whose route came in from the north west, heading toward Ogden? It seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west.
I believe that the Mormans had significant influence regarding the location; and they certainly had sufficient influemce about the hiring of laborers. I cannot recall which historian wrote about this.
Murphy SidingDakguy201 Let's say I'm a time traveler back in the 1860's. My job is to choose the route for the Union Pacific. President Lincoln has already decided I will take the "central route" beginning in Omaha. I dig out the works of the Army surveyors and perhaps do some of my own on the ground observation. I note that I'm going to build through almost entirely empty country until I meet the Central Pacific coming east. There is one exception to "entirely empty country" -- Salt Lake City. My location decision becomes to go north around the lake, meet the CP near Ogden and serve Salt Lake with a branch line. I've never understood why I didn't just go south around the lake to begin with. The answer to that *might* have been, at least partly, in a post on the 1880's engineering thread. It mentioned the WP line that ran on the south side of the lake as having problems with unstable ground/slides(?) and the lake trying to swallow the line in wet years. I wonder, if the determination to go north around the lake was made by Central Pacific, whose route came in from the north west, heading toward Ogden? It seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west.
It's a very good question, and it's been addressed by some people smarter than I, which enables me to summarize their findings. The UP and CP were 100% correct in their decision to locate north of the lake. Both railways independently arrived at that decision. The meeting point at Promontory was not by design of either, nor desired by either, and jammed down both their throats. The CP's ideal meeting point would have been Council Bluffs, Iowa, and the UP's ideal meeting point would have been Sacramento, California.
The end-game of the CP-UP was won by the UP, which must have deeply grated on Huntington as the UP's management of that era was not his equal in competence, aggression, knowledge, or organization. Huntington very much wanted to get at least as far as Cheyenne, Wyoming, before effecting the meeting. But the CP construction forces bogged down in the tough granite and deep snow of the Sierra Nevada, and right there, the battle was lost. At about the moment that the CP cleared the Sierra Nevada and began its race up the Humboldt Valley eastward, the UP had gotten its act together at last, and Jack Casement was grimly flogging his forces through Wyoming. Huntington knew the jig was up, and immediately refocused his attention on the Southern Pacific, which would expand the field of battle, outflank the UP, and enable him to dictate commercial terms onto the UP. Completion of the SP in fact enabled Huntington to do just that, and there were actually serious thought given to scrapping the UP or selling it to the CP because its commercial viability was destroyed.
Huntington knew he was in desperate straits the moment the UP began accelerating its construction westward through Wyoming, and so did a lot of other people. The vultures were already paying visits to Huntington, asking if he wanted to give up and sell out for two or three cents on the dollar of his capital while he still could. Huntington was a very tough man, however, and decided that financial ruin was of no lasting importance to him. The story almost no one reads is the story of his building of the SP, a far more dramatic and desperate gamble than the CP-UP. Huntington's strategic position was so untenable with a CP-UP meeting point in Utah he literally had to build the SP out of cash flow, a feat no one else ever dreamed could be possible or could even dream of accomplishing. No other transcon was built without one penny of equity or debt financing! If one wants to be in awe of a railroad builder, and one's measure is the total height of the climb and not just the altiitude of the climber at the end, I choose Huntington. Almost any idiot can take $1 million dollars and turn it into $1.1 million. Huntington took $1 and turned it into $1 million.Note: I referred earlier to the Central Corridor route being the best location between the Missouri Valley and California's Central Valley. It was at that time. There was an alternative, however, which is a branch line constructed off a main line rom the Missouri Valley to Los Angeles, a location occupied later by the SP (first) and the Santa Fe (second). However, that alternative could become viable only as an adjunct to the Los Angeles-Missouri Valley location, piggybacking onto its traffic flow and its engineering costs and its operating volume efficiencies. The Santa Fe and SP routes between Oakland and the Missouri Valley are to this day secondaries off the main stem, from a high-level point of view, and similarly the Port of Oakland is a satellite of the Ports of Los Angeles and Long Beach, used for overflow. Thus in today's perspective the Santa Fe or SP routes between Chicago and Oakland via Los Angeles look at least the equal of the Overland Route, but in the 1800s perspective this was not possible until Los Angeles developed as a traffic source in its own right. Had Los Angeles remained a hamlet of adobe huts (let's assume we trim off all of Southern California west of the San Andreas Fault), and had the UP-CP meeting point been effected east of the Rocky Mountains, there would be no need for any Santa Fe or SP lines looping south from the Central Valley and back north into the Missouri Valley.RWM
diningcarMurphy Siding Dakguy201 Let's say I'm a time traveler back in the 1860's. My job is to choose the route for the Union Pacific. President Lincoln has already decided I will take the "central route" beginning in Omaha. I dig out the works of the Army surveyors and perhaps do some of my own on the ground observation. I note that I'm going to build through almost entirely empty country until I meet the Central Pacific coming east. There is one exception to "entirely empty country" -- Salt Lake City. My location decision becomes to go north around the lake, meet the CP near Ogden and serve Salt Lake with a branch line. I've never understood why I didn't just go south around the lake to begin with. The answer to that *might* have been, at least partly, in a post on the 1880's engineering thread. It mentioned the WP line that ran on the south side of the lake as having problems with unstable ground/slides(?) and the lake trying to swallow the line in wet years. I wonder, if the determination to go north around the lake was made by Central Pacific, whose route came in from the north west, heading toward Ogden? It seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west. I believe that the Mormans had significant influence regarding the location; and they certainly had sufficient influemce about the hiring of laborers. I cannot recall which historian wrote about this.
Leonard Arrington did, in "Great Basin Kingdom" and other excellent histories of the Great Salt Lake Valley and the Kingdom of Deseret. Arrington was an economic historian, Mormon, and one of the best U.S. historians of the 1940-1980 period. Arrington found that Brigham Young was economically sophisticated as well as politically sophisticated and understood that once a transcontinental railway passing through or near his kingdom was a fait accompli, that his people's commercial interests would not be negatively nor positively influenced by not placing Salt Lake City on the main line. The Utah Central was funded 100% by principals of the Mormon Church, the Church itself, and the UP in partnership, as was the subsequent Utah Southern from Salt Lake City to Provo and beyond, which eventually became the stepping-off point for the Harriman counter to Clark's SPLA&SL. The Mormon Church also contracted all the labor to build the UP embankments from a point near Evanston, Wyoming, to and beyond Promontory as the two lines built past each other. The UP never paid the bill for the labor in full, and in the subsequent negotiation the UP agreed to pay in kind by providing second-hand iron rail for the Utah Central.
Murphy SidingIt seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west.
Murphy, please, please, please (I'm on one of my hobbies again). The official meeting place was at Promontory Summit. Promontory Point is right on the lake, and had no railroad until the Lucin Cutoff was constructed. It is sad, but even people around here believe that the Golden spike was driven at Promontory Point. It was just a slip wasn't it?
Johnny
Johnny, Columbus discovered America and I discovered Promontory Point.
http://www.carletonwatkins.org/views/hi-res_wpr/wr0357.htm
Jumping Jupiter, where the heck is Momument Point?
http://www.carletonwatkins.org/views/hi-res_wpr/wr0352.htm
Mike
Deggesty Murphy SidingIt seems, that before it was decided to meet at Promontory point, UP and CP gangs had graded a lot of miles parallel to each other in that area, one going east, one going west. Murphy, please, please, please (I'm on one of my hobbies again). The official meeting place was at Promontory Summit. Promontory Point is right on the lake, and had no railroad until the Lucin Cutoff was constructed. It is sad, but even people around here believe that the Golden spike was driven at Promontory Point. It was just a slip wasn't it? Johnny
Railway Man ........Booster groups had only small influence on railroad decision-making at the level of a Sioux Falls. The railways were grateful for any free cash or land, and the lack of a booster group would imply that the commercial prospects of the city were uninteresting, but these groups did not command enough cash to bend a railway to their will. RWM
........Booster groups had only small influence on railroad decision-making at the level of a Sioux Falls. The railways were grateful for any free cash or land, and the lack of a booster group would imply that the commercial prospects of the city were uninteresting, but these groups did not command enough cash to bend a railway to their will.
Railway ManThe end-game of the CP-UP was won by the UP, which must have deeply grated on Huntington as the UP's management of that era was not his equal in competence, aggression, knowledge, or organization. Huntington very much wanted to get at least as far as Cheyenne, Wyoming, before effecting the meeting. But the CP construction forces bogged down in the tough granite and deep snow of the Sierra Nevada, and right there, the battle was lost. At about the moment that the CP cleared the Sierra Nevada and began its race up the Humboldt Valley eastward, the UP had gotten its act together at last, and Jack Casement was grimly flogging his forces through Wyoming. Huntington knew the jig was up, and immediately refocused his attention on the Southern Pacific, which would expand the field of battle, outflank the UP, and enable him to dictate commercial terms onto the UP. Completion of the SP in fact enabled Huntington to do just that, and there were actually serious thought given to scrapping the UP or selling it to the CP because its commercial viability was destroyed. Huntington knew he was in desperate straits the moment the UP began accelerating its construction westward through Wyoming, and so did a lot of other people. The vultures were already paying visits to Huntington, asking if he wanted to give up and sell out for two or three cents on the dollar of his capital while he still could. Huntington was a very tough man, however, and decided that financial ruin was of no lasting importance to him. The story almost no one reads is the story of his building of the SP, a far more dramatic and desperate gamble than the CP-UP. Huntington's strategic position was so untenable with a CP-UP meeting point in Utah he literally had to build the SP out of cash flow, a feat no one else ever dreamed could be possible or could even dream of accomplishing. No other transcon was built without one penny of equity or debt financing! If one wants to be in awe of a railroad builder, and one's measure is the total height of the climb and not just the altiitude of the climber at the end, I choose Huntington. Almost any idiot can take $1 million dollars and turn it into $1.1 million. Huntington took $1 and turned it into $1 million.
Huntington knew he was in desperate straits the moment the UP began accelerating its construction westward through Wyoming, and so did a lot of other people. The vultures were already paying visits to Huntington, asking if he wanted to give up and sell out for two or three cents on the dollar of his capital while he still could. Huntington was a very tough man, however, and decided that financial ruin was of no lasting importance to him. The story almost no one reads is the story of his building of the SP, a far more dramatic and desperate gamble than the CP-UP. Huntington's strategic position was so untenable with a CP-UP meeting point in Utah he literally had to build the SP out of cash flow, a feat no one else ever dreamed could be possible or could even dream of accomplishing. No other transcon was built without one penny of equity or debt financing! If one wants to be in awe of a railroad builder, and one's measure is the total height of the climb and not just the altiitude of the climber at the end, I choose Huntington. Almost any idiot can take $1 million dollars and turn it into $1.1 million. Huntington took $1 and turned it into $1 million.
The challenge of crossing the Sierras was enough that the first line to reach the border between California and Nevada was to get extra funds for construction. About the only way that the CP would have had a chance of beating the UP to Cheyenne was for the CP to have started work in earnest a year earlier. One incentive for doing so would have been the traffic to Virginia City, where the silver mines were rich enough for Nevada to become a state in 1864. An earlier start would have required access to financing, rail, locomotives, rolling stock and labor, all of which in short supply during the Civil War.
As for financing the SP from cash flow, it probably didn't hurt that quite a bit of construction was taking place during the Big Bonanza years of the Comstock Lode (i.e. 1873-78). The line down the San Joaquin valley tapped a lot of agricultural traffic, which presumably helped with the cash flow. Myrick's Railroads of Arizona, vol. 1 contains a nice account of the construction of the SP from LA to Texas, with obvious emphasis on construction in Arizona.
It is likely that many of the skills that Huntington needed for pushing the CP and SP came from his experience in running his store in Sacramento. A lot of what he sold had to be shipped around the Cape or through the Isthmus of Panama. I would imagine that many of the challenges of supplying the construction forces weren't all that much different from running his store prior to the Civil War.
A rarely reported aspect of Huntington was that we was a staunch abolitionist and in his later years he helped fund many of the black colleges.
Murphy SidingRailway Man ........Booster groups had only small influence on railroad decision-making at the level of a Sioux Falls. The railways were grateful for any free cash or land, and the lack of a booster group would imply that the commercial prospects of the city were uninteresting, but these groups did not command enough cash to bend a railway to their will. RWM Perhaps, but a little burg called Los Angeles, did get the attention of SP, as it was building a transcon eastward.
And they did get the SP to make a substantial change in the route. The SP's original intent was "to build the Palmdale cut-off" first, and then run a branch line to LA. I've heard remarks that the LA boosters had used ladies of easy virtue as the primary bargaining tool.
The direct line to Colton would have been a natural to connect with the Cal Southern line to San Diego, which has the best natural harbor in southern California.
erikem Railway Man I can sum Vance. I'd like to go further but that would be plagiarism. I do you a disservice because I cannot write with the elegance or sweep of Vance. So here goes: Locational analysis apparently not performed No traffic base not already adequately served by others No significant service advantage No significant operating cost advantage No significant interline connection advantages Too much track through too much sterile territory. A minor nitpick - these are reasons why the Milwaukee PCE shouldn't have been built, but I believe the original question was why it was built in the first place despite the challenges described by Vance (FWIW, I bought a copy of his book shortly after it hit the bookshelves). Stan Johnson's book, The Milwaukee Road's Western Extension, does cover the overlap in directorship between Anaconda Copper and the Milwaukee as one of the reasons why construction was approved. This overlap was also a reason for the electrification as it was a consumer of large amounts of copper (something near and dear to the hearts of the ACM stockholders, but not necessarily to the Milwaukee stockholders). [N.B. I'm treating why a line was/wasn't built as being distinct from the question whether the line should/shouldn't have been built.]
Railway Man I can sum Vance. I'd like to go further but that would be plagiarism. I do you a disservice because I cannot write with the elegance or sweep of Vance. So here goes: Locational analysis apparently not performed No traffic base not already adequately served by others No significant service advantage No significant operating cost advantage No significant interline connection advantages Too much track through too much sterile territory.
Murphy Siding, erikem, and anyone else who's interested:
Vance, in The North American Railroad, says that the Milw's PCE was built because "only their own line to the Pacific would guard their interests as they perceived them. [fn 26]" (pg. 216, bottom) - the whole discussion is only pp. 216 - 218*, and RWM (above) does it justice.
To understand that, you need to know that the infamous Northern Securities Co. arrangement included not only the commonly-known NP, GN, and CB&Q, but also the Milw, at the behest of E. T Harriman and Wm. Rockefeller. [Despite having been a casual student of this for years, this is the 1st time I'd seen anything pertaining to the Milw being involved in it.] When Northern Securities was broken up in 1904. the Milw apparently felt vulnerable to competition and being outflanked by the Hill lines, as the quote above attests. Vance cites in his FN 26 the history by August Derleth, The Milwaukee Road: Its First Hundred Years (New York: Creative Age Press, 1948), p. 165, on his pg. 335.
I find this bordering on incredible, as in "unbelievable". Essentially, the Milw "doubled down" on its commerical bets. If it felt vulnerable to the Hill lines after 1904, why quadruple your mileage with a huge extension into the backyard of the same people that you feel vulnerable to ? Why subject yourself to more of the same ? (Kind of like that joke about the young bull challenging the big old mean bull - "Just so he knows I'm a bull and not a cow !") Neither NP nor GN went any farther east than Minn. - St. Paul, so Milw wasn't vulnerable there. CB&Q did go to Chi-town, but only by swinging way to the south and then northwest. In its home territory, the MILW wasn't challenged by any of these - C&NW and others, yes, but none of them went west either. Oh yeah - by then the UP was on the Pacific Coast, so there were already 3 competitors out that way, and the UP wasn't vulnerable to the MILW's challenge. But as George W. Hilton has written, a lot of those roads - esp. the grangers - were built and intended to be nusiances, for the main purpose of being bought out by the others. No doubt the MILW had been part of that experience, and maybe decided to use that same tactic - writ large - for its own purposes. This is the only explanantion that makes sense, given the objective realities as summarized by RWM above.
From another source - Brian Solomon's Burlington Northern Santa Fe Railway (1995) - I read that by 1925 the MILW had gone bankrupt from the costs of the PCE. Self-inflicted wound, it appears. He also has an interesting quote from James J. Hill regarding Northern Securities, but that's for another time and thread.
* - RWM: It took me 8 minutes, not 4, even though I'm a fast reader. But that included looking it up in the index to find it, and reading it in the poor light in my car as soon as I got outside of the library, which was closing then - and then re-reading the part about MILW being in the Northern Securities.
Railway Man . Greyhounds and I are sometimes polar opposites on matters of politics but I think we are in agreement that railway regulation had as its primary beneficiary not the public but the stockholder of certain companies, it turned fair economic competition on its head, it prematurely exhausted resources and the environment, and it destroyed trillions of dollars of wealth. RWM
. Greyhounds and I are sometimes polar opposites on matters of politics but I think we are in agreement that railway regulation had as its primary beneficiary not the public but the stockholder of certain companies, it turned fair economic competition on its head, it prematurely exhausted resources and the environment, and it destroyed trillions of dollars of wealth.
We are in full and complete agreement.
I know I've been over this before, but I think it's one of those things that can not be said enough.
Economic regulation of transportation did not serve "The Public Interest". It can not serve "The Public Interest".
The agency to economically regulate transportation, the Interstate Commerce Commission, was established to stabilize railroad cartels. The railroads had tried to establish the cartels among themselves but were generally uncessful. They didn't like competition, but they couldn't stop competition. So they turned to the Federal Government for help. The Interstate Commerce Act was written by a lawyer in the pay of the Phildelphia and Reading Railroad. Now, do you think he wrote the law so as to be unfavorable to the railroad companies?
The cartels set prices so that all members could make money. They could set prices the same all around, but they couldn't equalize costs of operation over various routes. This meant they had to artificially set the collective prices high enough so that the least efficient railroad could make a buck. It was a sweet deal for the investors in inefficient railroads. They were protected from price competition through the Federal Government. Of course, it screwed up the national economy big time. But those investors in the inefficient carriers didn't have to worry.
Regulation did allow communities located on the inefficient carriers (i.e. D&RGW) to continue to have rail service. But this cross-subsidy came at a high price to the overall national economy.
When trucking developed two things happened. 1) The truckers wanted their own Federally enforced cartelization, and they got it to a significant extent. 2) The railroads were trapped in that in order to compete with the truckers they had to reduce many prices - but they couldn't do that because the ICC was protecting the weak, inefficient railroads. This caused the diversion of more freight to motor movement in lieu of rail movement than would have been the case under competition. Although strict economic regulation of rates is now gone in both railroading and trucking, we are still paying the price for that excessive diversion from rail to road today.
I don't think RWM and I disagree politically that much. But I do think there are significant differences between us regarding the current railroad business model. I'm convinced current practices place too much emphasis on operating efficiencies. This is a sub-optimization that forgoes significant profit potential when freight is left behind so that the train doesn't have to make "A Pick Up in Pasco."
Paul_D_North_Jr I find this bordering on incredible, as in "unbelievable". Essentially, the Milw "doubled down" on its commerical bets. If it felt vulnerable to the Hill lines after 1904, why quadruple your mileage with a huge extension into the backyard of the same people that you feel vulnerable to ? Why subject yourself to more of the same ? (Kind of like that joke about the young bull challenging the big old mean bull - "Just so he knows I'm a bull and not a cow !") Neither NP nor GN went any farther east than Minn. - St. Paul, so Milw wasn't vulnerable there. CB&Q did go to Chi-town, but only by swinging way to the south and then northwest. In its home territory, the MILW wasn't challenged by any of these - C&NW and others, yes, but none of them went west either. Oh yeah - by then the UP was on the Pacific Coast, so there were already 3 competitors out that way, and the UP wasn't vulnerable to the MILW's challenge. But as George W. Hilton has written, a lot of those roads - esp. the grangers - were built and intended to be nusiances, for the main purpose of being bought out by the others. No doubt the MILW had been part of that experience, and maybe decided to use that same tactic - writ large - for its own purposes. This is the only explanantion that makes sense, given the objective realities as summarized by RWM above. - Paul North. .
.
I'm going to disagree with this. The CB&Q route between St. Paul and Chicago was not "round-about". When the GN/NP bought the "Q" they acquired a fully competiive, direct route into Chicago.
Mileages between Chicago Union Station/Northwestern Station (two blocks or so apart) and St. Paul were:
CB&Q: 427
Milwaukee: 410
C&NW: 409
17/18 miles is no big deal and can easily be offset with other factors. Such as, the Milwaukee had to cross the Mississippi River twice with moveable bridges between Chicago and St. Paul (Hastings, MN and La Crosse, WI) while the "Q" stayed on one side. The "Q" provided access to the St. Louis and Peoria gateways. The MIlwaukee had niether.
PDN Jr.: I had to go find my copy of The North American Railroad and start reading again.
As far a the PCE goes, I still can't quite grasp the decision making process made by the Milwaukee directors. After doing a location survey (or whatever you would call it) to determine the reason to build the line, and the where and at what cost factor, they still voted yes? By 1906, there were already 6 transcons to the west coast sharing in that asian traffic. Was there that much traffic, and was there enough to support 1 more?
PDN, Murphy:
As I mentioned earlier, Stan Johnson had brought up Anaconda Copper as one of the reasons that construction of the PCE was approved (in addition to the reasons given by Vance). Johnson undoubtedly put a lot more effort researching the PCE than Vance did (this is not intended as a criticism of Vance), so I'm not surprised that Johnson would have details not in Vance's book.This is about the same time frame that Phelps Dodge had turned the El Paso & Southwestern into a bridge line between Tucson and Tucumcari, and the incentive there was to ensure access to more than one railroad.
erikem PDN, Murphy:As I mentioned earlier, Stan Johnson had brought up Anaconda Copper as one of the reasons that construction of the PCE was approved (in addition to the reasons given by Vance). Johnson undoubtedly put a lot more effort researching the PCE than Vance did (this is not intended as a criticism of Vance), so I'm not surprised that Johnson would have details not in Vance's book.This is about the same time frame that Phelps Dodge had turned the El Paso & Southwestern into a bridge line between Tucson and Tucumcari, and the incentive there was to ensure access to more than one railroad.
I wouldn't discount Vance. Though his work was international in scope and Johson's specific to one railway company, Vance brought to the game an international railway economic and geographic context, theoretical framework, ironclad grip on the science of economic geography, and years of research that it would be almost impossible for a non-professional to equal for lack of time, funding, and exposure to and knowledge of the available methods of inquiry. Focusing one's inquiry on one railway or one region is good for drawing out the details of a railway, but its pitfall is that the result may only be a gigantic accumulation of unorganized, meaningless data of value only to a fellow accumulator of data, but nothing that would help or inform anyone but a fellow adherent.
Looking above, I see two hypotheses advanced for the construction of the Puget Sound Extension. Both of these are actual "business plans" in which there is a projection of investment and profit. Though both business plans are unethical, they at least could have had a genuine pro forma developed, just like a drug dealer can generate a business plan projecting the cost to buy cocaine at wholesale in a foreign country, the revenue to sell at retail on the street in the U.S., deduct the costs of transportation and security, and project a profit.
One of these hypotheses says the PSE's business case was to shamelessly expropriate the investment of one class of stockholders to benefit the tangential investment of another class of stockholders (the ones holding Anaconda Copper stock), beggaring one to enrich the other. The second hypothesis says the PSE's business case was as a nuisance run on the stockholders of the Hill and Harriman systems - the investment is the construction cost, the income is the sale price to a Hill or Harriman whose systems would be devalued by the Milwaukee Road's competition, the profit is the difference.
The first hypothesis is likely only a little bit true as rates were regulated by the time the extension was built, and all that the Milwaukee Road could deliver to the stockholders holding both Anaconda Copper and Milwaukee Road stock was the profit from the rail haul of the blister copper ingots from Anaconda or the copper anodes from Great Falls, which would have been a very small fraction of the investment risk required to build the Extension. Normally this sort of ploy -- which was more-or-less rendered illegal by the Hepburn Act -- was used to drive from business the competitor of the traffic source. The classic examples of this were the anthracite coal producers, which built railways that charged very high freight rates, taking their profit not from the mining of coal but the transportation of coal, to force out the second-tier anthracite producers who did not own a railway, would have to ship on the railway owned by the first-tier anthracite producer, be bled dry, and thus monopolize the trade. But by the time of the PSE's construction the Rockefeller-Rogers-Flagler syndicate already controlled Butte so there was no second tier producer to extort from.
The second hypothesis is more plausible -- and there were ample recent examples of the ploy of building a nuisance railway -- but this hypothesis requires the Milwaukee Road's board to be fantastically ignorant of the vulnerability of the Hill and Harriman empires and fantastically sanguine about the potential value of the payoff for the sizeable risk they had made. I doubt that Rockefeller, Rogers, or Flagler were sufficiently ignorant or sanguine on the details of such a simple business case.
A third hypothesis, alluded to above, is that the Milwaukee Road's board was afflicted with grandiosity, self-importance, and machismo, and could not countenance a future in which they were directors of an also-ran, second-tier granger instead of barons of the transcontinental nobility, nor admit to their peers or themselves that Harriman and Hill had already won the game. They rationalized their decision (one reached by by telling each other that the economic potential of the West and trade with the Orient was only barely tapped and would grow so fast that it would overwhelm existing railways with traffic and create plenty of traffic for another, a rationalization that harmonized with contemporary ideas of American superiority over other cultures and governments, a belief that technological prowess would be showering the world with unprecedented ways to conquer nature, space and time, and that Americans were a chosen people to which God would deliver rainfall even in deserts.
It's impossible to test any of these hypotheses. However, all that the first one (interlocking directorates with Anaconda Copper) has going for it is correlation, and it requires the board to be particularly stupid if they thought there was opportunity there. The second hypothesis requires the board to underestimate Hill and Harriman, and I find it difficult to think that Rockefeller, Rogers, or Flagler could have made such a gross miscalculation because they'd have to have believed in it and acted upon it for a very lengthy period. Sure, you can underestimate a bluff on one hand in a poker game, but this was a 5-year-long poker tournament. The third hypothesis resonates strongly with a lot of other people at the same time: Rogers building the Virginian, Gould the Western Pacific, Western Maryland Connellsville Extension, and Pittsburgh & West Virginia, Flagler the Florida East Cost, William Clark (the other Butte baron) the San Pedro, Los Angeles & Salt Lake. (David Moffat was building the Denver, Northwestern & Pacific at the same time but that strikes me as a pure run on Harriman as the DNW&P had absolutely no valid business plan otherwise and was exceedingly cheaply built). It would seem that almost no rags-to-riches magnate of that period thought his life complete or his brilliance demonstrated unless he also built a railway, perhaps like rags-to-riches digital technology magnates of today also think they have the magic touch to snap their fingers and create new technological powerhouses in areas where they have little prior experience (e.g. Paul Allen turning $7 billion into $0 billion with Charter Communications).
erikemThis is about the same time frame that Phelps Dodge had turned the El Paso & Southwestern into a bridge line between Tucson and Tucumcari, and the incentive there was to ensure access to more than one railroad.
This is about the same time frame that Phelps Dodge had turned the El Paso & Southwestern into a bridge line between Tucson and Tucumcari, and the incentive there was to ensure access to more than one railroad.
I think the business case of the EP&SW was more to retain the profit on Phelps-Dodge's intraplant traffic, not interline traffic: coking coal from company mines in the Raton Field to the Douglas Smelter, copper concentrates from Bisbee to Douglas, etc. It was an intraplant railway of very large size. As a bridge line between Tucson and Tucumcari it could have been nothing but a flop as the SP would not have offered through rates for traffic moving through Tucson to points served by SP or to points at common rate gateways, only local rates. The ICC did not force railways to short-haul themselves.
About the time the EP&NW was completed, I think if I recall correctly, P-D had lost enthusiasm for being in the railway business and was already asking SP if they wanted to buy it out.
If the point of the EP&SW was to obtain access to another railway (Santa Fe at Deming would be the first possible connection point, and the best one as it had led toward the copper consumption points of the industrial states), why would P-D think it had a business case to build it, and then no longer needed the business case and sold it? Who knows -- I don't! Perhaps they were in error to build it or in error to sell it. I guess I should find their annual reports and see if they offer any clues. My unsupported speculation is that the railway was an example of Dr. Douglas's grandiosity and that once he was retired the corporation quietly undid some of his schemes that no one had the guts or the power to deny while he was in his prime.
Murphy SidingPDN Jr.: I had to go find my copy of The North American Railroad and start reading again. As far a the PCE goes, I still can't quite grasp the decision making process made by the Milwaukee directors. After doing a location survey (or whatever you would call it) to determine the reason to build the line, and the where and at what cost factor, they still voted yes? By 1906, there were already 6 transcons to the west coast sharing in that asian traffic. Was there that much traffic, and was there enough to support 1 more?
No. (I think this question is a variant of "begging the question" called "see how much RWM will do anything to avoid working tonight.")
It is almost impossible to build an additional facility in any non-expanding market for an undifferentiated commodity such as railroad transportation when demand in that market is already fully met by existing facilities, and successfully compete for a share of the market, unless one is offering some sort of new value the existing facilities cannot. The new value could be lower cost, faster service, volume discounts pushed downward to smaller volumes. The owners of previously established facilities will fight to the death to avoid loss of market share as it will probably erase their profits, the previously established facilities had first pick of scarce resources such as location, expertise, or contracts with vendors and customers, and any technological novelty introduced by the new facility can usually be emulated promptly by the old.
Suppose another lumberyard identical in all respects to your lumberyard including price, service, timeliness of delivery, inventory, and friendliness of the lumber salesman appeared tomorrow morning in Sioux Falls. Do you suppose the owners of yours would welcome them? The customers would have one reason to divert some significant fraction of their business to them? (Well, maybe if they hired Jessica Simpson and Anne Hathaway to sell their lumber. That might be a problem.)
In a rapidly expanding market there is often opportunity for a new facility to appear, compete for the new business, and establish itself. In the long-term, however, the new facility usually will have difficulty showing staying power because it is usually coping with disadvantageous location, less experience, less volume, and sketchier customers than the established facilities. Heavy earthmoving machinery, for example, by 1960 was dominated by Caterpillar. Many subsequent manufacturers have attempted to seize market share but so far none have succeeded in sustaining their runs at Cat.
Re: EP&SW
Writing my previous post prompted my getting Myrick's Railroads of Arizona, vol 1 off the shelf and browsing through it. The EP&SW made good money for P-D, and for the most part was a large scale intraplant RR. The EP&SW did buy a good chunk of CRI&P stock, with some thought that they could form yet another transcon - possibly linking up with Spreckel's San Diego & Arizona line.
The thoughts of getting out of the RR business started after the extension to Tucson was completed (1910) and the line was sold to the SP in 1923.
As for Deming, the Santa Fe connection was an important motivation for the line from Douglas to Deming.
Changing course slightly - Myrick stated that the construction of the SP was financed from several sources, one being cash flow. Another source of funding was sale of CP stock. It also didn't hurt that there was a pretty fair amount of traffic being generated in Arizona, one source being the Copper Queen mine that led to the EP&SW.
erikem PDN, Murphy: As I mentioned earlier, Stan Johnson had brought up Anaconda Copper as one of the reasons that construction of the PCE was approved (in addition to the reasons given by Vance). Johnson undoubtedly put a lot more effort researching the PCE than Vance did (this is not intended as a criticism of Vance), so I'm not surprised that Johnson would have details not in Vance's book.
As I mentioned earlier, Stan Johnson had brought up Anaconda Copper as one of the reasons that construction of the PCE was approved (in addition to the reasons given by Vance). Johnson undoubtedly put a lot more effort researching the PCE than Vance did (this is not intended as a criticism of Vance), so I'm not surprised that Johnson would have details not in Vance's book.
Railway Man A third hypothesis, alluded to above, is that the Milwaukee Road's board was afflicted with grandiosity, self-importance, and machismo, and could not countenance a future in which they were directors of an also-ran, second-tier granger instead of barons of the transcontinental nobility, nor admit to their peers or themselves that Harriman and Hill had already won the game. RWM
A third hypothesis, alluded to above, is that the Milwaukee Road's board was afflicted with grandiosity, self-importance, and machismo, and could not countenance a future in which they were directors of an also-ran, second-tier granger instead of barons of the transcontinental nobility, nor admit to their peers or themselves that Harriman and Hill had already won the game.
You've just shaken my belief in the whole system. I guess there's nothing left to do, but sell my ENRON stock, and dump in all into mutual funds.
Weren't there stockholders back then, who would question the BOD decisions at some point?
greyhounds Railway Man . Greyhounds and I are sometimes polar opposites on matters of politics but I think we are in agreement that railway regulation had as its primary beneficiary not the public but the stockholder of certain companies, it turned fair economic competition on its head, it prematurely exhausted resources and the environment, and it destroyed trillions of dollars of wealth. RWM We are in full and complete agreement. I know I've been over this before, but I think it's one of those things that can not be said enough. Economic regulation of transportation did not serve "The Public Interest". It can not serve "The Public Interest". The agency to economically regulate transportation, the Interstate Commerce Commission, was established to stabilize railroad cartels. The railroads had tried to establish the cartels among themselves but were generally uncessful. They didn't like competition, but they couldn't stop competition. So they turned to the Federal Government for help. The Interstate Commerce Act was written by a lawyer in the pay of the Phildelphia and Reading Railroad. Now, do you think he wrote the law so as to be unfavorable to the railroad companies? The cartels set prices so that all members could make money. They could set prices the same all around, but they couldn't equalize costs of operation over various routes. This meant they had to artificially set the collective prices high enough so that the least efficient railroad could make a buck. It was a sweet deal for the investors in inefficient railroads. They were protected from price competition through the Federal Government. Of course, it screwed up the national economy big time. But those investors in the inefficient carriers didn't have to worry. Regulation did allow communities located on the inefficient carriers (i.e. D&RGW) to continue to have rail service. But this cross-subsidy came at a high price to the overall national economy.
Railway Man Murphy Siding PDN Jr.: I had to go find my copy of The North American Railroad and start reading again. As far a the PCE goes, I still can't quite grasp the decision making process made by the Milwaukee directors. After doing a location survey (or whatever you would call it) to determine the reason to build the line, and the where and at what cost factor, they still voted yes? By 1906, there were already 6 transcons to the west coast sharing in that asian traffic. Was there that much traffic, and was there enough to support 1 more? No. (I think this question is a variant of "begging the question" called "see how much RWM PDN will do anything to avoid working tonight today.")
Murphy Siding PDN Jr.: I had to go find my copy of The North American Railroad and start reading again. As far a the PCE goes, I still can't quite grasp the decision making process made by the Milwaukee directors. After doing a location survey (or whatever you would call it) to determine the reason to build the line, and the where and at what cost factor, they still voted yes? By 1906, there were already 6 transcons to the west coast sharing in that asian traffic. Was there that much traffic, and was there enough to support 1 more?
No. (I think this question is a variant of "begging the question" called "see how much RWM PDN will do anything to avoid working tonight today.")
Seriously, this is wonderful, fun, and informative thread. I'm having way too much fun with it ! But I'm over my self-imposed limit for the Forum today with my lengthy post to the "FRA Inspection" thread, so I'll have to be brief here.
Last night I took a look at Charles & Dorothy Wood's The Milwaukee Road - West (Superior Publishing, 1972) [a few of those details are more correct than in my earlier post, so that's why I'm repeating it here]. Their recounting of the PSE decision by the MILW in the early years of the 20th century is a lot better than I'd expected. Short version:
1) No, I personally doubt if there was enough such traffic. But yes, apparently they did expect that much traffic to materialize out of the developing and expanding territory;
2) This was likely an outgrowth of their view of the "natural expansion" or "natural territory" doctrine of railroad building and operation - kind of like a railroad-version subset of the "manifest destiny" beliefs of the period; [you have no idea of how hard I had to rack my brain to recall that one !]
3) The Woods include several quotes and paragraphs from James J. Hill and the UP (Harriman ?) to the effect of "We don't mind if the MILW expands west - we have more traffic than we can handle now." To their credit, the Woods then explore that a further with a lot of skepticism, including a couple of funny editorial cartoons featuring Hill essentially saying one thing but doing another. I can readily see this as the railroad geo-politics version of " 'Come in to my parlor !', said the spider to the fly". Vance notes at several places that the MILW PSE was essentially where UP wanted to go - and that upon the abandonment of the PSE, UP got most of the pieces. (My impression doesn't square with the latter, but I don't hold myself out as being well-informed on that point - maybe somebody esle here can confirm or provide details, etc.);
4) It gets better: The Woods say that the MILW had a cost estimate of the PSE from 1901. Note that date - that's right around when the Northern Securities Co. trust was formed, and a good 3 years before the US Supreme Court said NorSec was a violation. That cost estimate was for $45 million. In or around 1906, the managment of the MILW upped it to $60 million to be safe. It actually wound up costing . . .
wait for it . . .
$234 million (if I remember right) - about 4 times the already-inflated estimate ! The Woods provide a laundry list of the usual reasons - none of them were justifiable or unforseeable, in my opinion. As did RWM, the Woods also say that the costs of operating the grades on the PSE were so high that it drove the MILW to implement the electrification. [Was it above on this thread that somebody wrote that "Poverty is the mother of invention ?" Wonderful turn of phrase - "well said".] Anyway, in addition to the 1925 bankruptcy that I'd mentioned previously, the MILW found it necessary to "rinse and repeat" same again in 1935.
As RWM noted previously, this whole topic has aspects of a religious fervor to it. I suspect that is not a recent development - instead, that characteristic appears to go back to the genesis of the PSE.
Murphy Siding greyhounds [snips] The Interstate Commerce Act was written by a lawyer in the pay of the Phildelphia and Reading Railroad. [snips; emphasis added - PDN] At what point, did the ICC go from being a protector of stockholders of certain companies, to (over)protecting everybody who had a rail line nearby? Take CNW for example. The ICC not allowing them to shed non profitable grainger lines in a timely fashion had to be detimental to CNW stockholder's income and equity. Couldn't the same be said for nearly every railroad at some point in the ICC history?
greyhounds [snips] The Interstate Commerce Act was written by a lawyer in the pay of the Phildelphia and Reading Railroad. [snips; emphasis added - PDN]
At what point, did the ICC go from being a protector of stockholders of certain companies, to (over)protecting everybody who had a rail line nearby? Take CNW for example. The ICC not allowing them to shed non profitable grainger lines in a timely fashion had to be detimental to CNW stockholder's income and equity. Couldn't the same be said for nearly every railroad at some point in the ICC history?
Murphy Siding - "When they [the ICC] started believing their own press releases !" (as John G. Kneiling often said).
The actual answer may well be in one of the lengthier posts above; if not, it is in the depths of the history of transportation regulation in the U.S. It was sometime after the original ICC Act of 1887, through the Mann-Elkins Act of 1906 (?), another Act of 1914 (?), the Transportation Act of 1920, and maybe a few others as well.
If you can, you (we) really need to get and read the George W. Hilton articles from Trains of the 1960s and 1970s. He covers all this at a pretty sophisticated (post-graduate level ?) of detail. It's heavy going at places, but its the best and clearest explanation of this esoteric subject that I've seen. He said: "I write about this not because I enjoy it, but because I think it's important." (He went on to say that he'd rather write about oddball switching in Baltimore. Sadly, I don't think that ever happened, at least not in Trains.) Below is the list, from my search of the Trains magazine index a few minutes ago for "Hilton" and "ICC". Note that the sub-title for the 3rd one is "transportation is a cartel, and ICC is running it" - this is from pre-OPEC 1972, before most people outside of the world of economics had heard of the word "cartel" :
greyhounds - I understand it was a Pennsylvania Railroad lawyer, most likely from the Hilton article referenced above. Since I'm in Pennsylvania and "close to the scene of the action", Id like to run that down. Can you provide a name or reference for that ? Thanks !
Paul:Thanks for that list of George Hilton articles.
This is a fascinating thread and I appreciate everyone's input. Today we are seeing very similar instances of companies (and BOD) not correctly assessing the risk involved in major decisions. The financial industry's missteps the past 10 years are very well apparent and have affected almost all of us in a major way. No doubt there was a healthy amount of arrogance involved in these decisions.
Murphy while you question the shareholders allowing the PCE, we repeatedly see the same mistakes being made again and again. Do you think Jimmy Cayne of Bear Stearns or Richard Fuld of Lehman Brothers (I can go on and on) considered the magnitude of risk they took?
Rob Krebs (BNSF) looks pretty good right now for his "if you build it they will come" attitude regarding expanding the Transcon 10 years ago. It gave BNSF a huge head start on the UP. At the time, BNSF's shareholders spoke out questioning the expansion. What did Krebs know that UP didnt?
These lessons from 100 years ago are still important.
ed
greyhounds Paul_D_North_Jr [snip by PDN] CB&Q did go to Chi-town, but only by swinging way to the south and then northwest. In its home territory, the MILW wasn't challenged by any of these - C&NW and others, yes, but none of them went west either. [snip by PDN; emphasis added by greyhounds] - Paul North. I'm going to disagree with this. The CB&Q route between St. Paul and Chicago was not "round-about". When the GN/NP bought the "Q" they acquired a fully competiive, direct route into Chicago. Mileages between Chicago Union Station/Northwestern Station (two blocks or so apart) and St. Paul were: CB&Q: 427 Milwaukee: 410 C&NW: 409 17/18 miles is no big deal and can easily be offset with other factors. Such as, the Milwaukee had to cross the Mississippi River twice with moveable bridges between Chicago and St. Paul (Hastings, MN and La Crosse, WI) while the "Q" stayed on one side. The "Q" provided access to the St. Louis and Peoria gateways. The MIlwaukee had niether.
Paul_D_North_Jr [snip by PDN] CB&Q did go to Chi-town, but only by swinging way to the south and then northwest. In its home territory, the MILW wasn't challenged by any of these - C&NW and others, yes, but none of them went west either. [snip by PDN; emphasis added by greyhounds] - Paul North.
greyhounds - You're quite right; thanks for bringing that up. Frankly, I'd overlooked that line - I was focussing on the branch-line network instead, though looking back now on what I wrote, you wouldn't have known that either. But it doesn't affect my main point, because I'd taken it for granted that the CB&Q had a great line and was an effective eastern link for both the NP and the GN, paralleling and competing with the MILW's main line. You've reinforced and detailed that presumption.
What I intended to say was that the CB&Q didn't have enough of a branch-line network in the MILW's home territory to seriously threaten the MILW's originated traffic base (albeit mostly granger-type traffic). Aside from the main line (only) from Chicago to the Twin Cities that you describe - which once north of Savanna was away from the action, being on the east/ north bank of the Mighty Miss - the only other CB&Q main line was way to the south, along the Chicago-Galeburg-Burlington-Council Bluffs/Omaha-Lincoln-Aroura-Alliance axis. The Q's branch line network was well away from the MILW's, being mainly south and west of the Missouri, and within only a few miles of that westerly main line, except for the branches to Des Moines and Sioux City. It wasn't until much farther to the west that the CB&Q had branches heading north into the MILW's prospective territory, at Deadwood, S.D. and to Billings Mont. See the 1907 CB&Q system map at:
http://www.davidrumsey.com/maps900059-24568.html
and the pop-up enlargement at:
http://www.davidrumsey.com/luna/servlet/detail/RUMSEY~8~1~24568~900059:Map-of-the-Burlington-Route-and-con
Therefore, in 1906 the MILW shouldn't have felt vulnerable to the CB&Q in terms of the CB&Q competing for the MILW's local/ originated traffic. For the bridge or overhead traffic to & from the NP and GN at Minn.-St. Paul, sure - but that was a "done deal", already going to the CB&Q - see the map above - and was never going to be the MILW/'s anyway. So building the PSE made no sense vis-a-vis the Burlington - as objectively viewed now (from 103 years later ), the PSE wasn't going to alter that competitive equation between the MILW and the CB&Q at all.
That's my story, and I'm sticking to it ! (at least until I see a better version)
Thanks for participating in the discussions.
jrbernier Murphy, The Milwaukee Road(then the St Paul Road) had built a quite extensive granger network in the Midwest. They realized two things: There was not enough traffic being generated to really support the heavy debt load. They needed a new traffic source. A 3rd factor was basic 'I want to control my own railroad'. They could see that they were not the 'Super Grainger' and would be bought out at some time(and control would be moved out of the local area). The answer was to build the 'Pacific Extension'. The line had several issues: The GN & NP were already there The alignment crossed 'one too many mountains' They had to electrify due to the grades/weather conditions It took a lot more money to build than forecast And to top it off, the Panama Canal opened and transcon traffic fell off for years They took a gamble and it did not pay off. Had they not built it, maybe they could have sold their Midwest lines for top dollar - Who knows. That is 'History'..... Jim
Hi, Jim -
Looking back over the posts on this thread re the MILW and the PSE / PCE, it seems that early on you neatly summarized most of the important points. However, in reviewing the Charles & Dorothy Wood The Milwaukee Road - West book (Superior, 1972) last night, I did note that they claimed that the MILW was financially sound and not heavily indebted before the PSE, contrary to your 1st point above. I forgot the exact numbers - I could retrieve the book and post them tonight or tomorrow if you're interested.
As to the effects of the Panama Canal on the MILW, I've seen claims both ways in the past 2 days. It certainly didn't help, anyway. Again, I'll see what the Woods say on that.
Otherwise, your post pretty much agrees with them, if you didn't already know that.
I appreciate your insights on this and the many other topics on the Forum.
Murphy Siding greyhounds Regulation did allow communities located on the inefficient carriers (i.e. D&RGW) to continue to have rail service. But this cross-subsidy came at a high price to the overall national economy. At what point, did the ICC go from being a protector of stockholders of certain companies, to (over)protecting everybody who had a rail line nearby? Take CNW for example. The ICC not allowing them to shed non profitable grainger lines in a timely fashion had to be detimental to CNW stockholder's income and equity. Couldn't the same be said for nearly every railroad at some point in the ICC history?
greyhounds Regulation did allow communities located on the inefficient carriers (i.e. D&RGW) to continue to have rail service. But this cross-subsidy came at a high price to the overall national economy.
The cartel organization always cross-subsidized rail lines that were not otherwise economically viable. It had to. Benifits of this cross-subsidy went to rail customers located on those lines. These customers litterally had someone else paying part of their freight bills. Once someone starts getting a subsidy it's like an adictive drug. They get so they can't imagin life without it and will go to great lengths to continue their adiction. Abandonment of uneconomical lines removed the subsidy drug and, as a result, was fought politically.
Government control over railroads (and other commerce) was increased greatly in the first two decades of the 20th Century. This increase culminated in the outright siezure of the railroads by the Federal Government in 1918. The Feds also siezed Western Union and AT&T. So they had complete control of all non-local transportation and communication. Gulp! (This was a very dangerous period in American History that doesn't seem to get a lot of study.)
There was a debate about returning the railroads to private ownership. Prominent socialists, such as Eastman, thought they were gurus who had the wisdom and knowledge to produce a "perfect" government run transportaiton system for the US - if only they were given the power. Such egomainia, when granted government power, is frightening. It exists today.
The railroads were returned to private ownership in 1920. But the regulated cartel structure was cast in steel by the Transporation Act of 1920, complete with its cross-subsidy of non-economic lines.
At about the same time, trucks and paved roads began to develop. This destroyed the ability of even a government enforced rail cartel to cross-subsidize anything. Removing the commercial ability to do the cross-subsidy didn't remove the political pressure for the cross-subsidy. So the railroads, such as the C&NW were forced to bleed in order to maintain service on uneconomic lines.
That's the long way around, but the answer to your question: "At what point, did the ICC go from being a protector of stockholders of certain companies, to (over)protecting everybody who had a rail line nearby?" I'd say about 1920 and after, when the rail cartel was made increasingly impractical by the rapid development of motor freight technology.
MP173 Paul:Thanks for that list of George Hilton articles. This is a fascinating thread and I appreciate everyone's input. Today we are seeing very similar instances of companies (and BOD) not correctly assessing the risk involved in major decisions. The financial industry's missteps the past 10 years are very well apparent and have affected almost all of us in a major way. No doubt there was a healthy amount of arrogance involved in these decisions. Murphy while you question the shareholders allowing the PCE, we repeatedly see the same mistakes being made again and again. Do you think Jimmy Cayne of Bear Stearns or Richard Fuld of Lehman Brothers (I can go on and on) considered the magnitude of risk they took? Rob Krebs (BNSF) looks pretty good right now for his "if you build it they will come" attitude regarding expanding the Transcon 10 years ago. It gave BNSF a huge head start on the UP. At the time, BNSF's shareholders spoke out questioning the expansion. What did Krebs know that UP didnt? These lessons from 100 years ago are still important. ed
This anology with todays bankers and investment companies must also include the very substantial influence, in some cases blackmail, by the Federal Government to make loans which were not secure.
Times have changed and government now influences private and corporate investments through tax policy and because "they know better than we what is good for us". I have very little confidance in our Congress and it is not limited to the presently constituted Congress. This has been ongoing for 40 + years.
diningcar [snip] Times have changed and government now influences private and corporate investments through tax policy and because "they know better than we what is good for us". I have very little confidance in our Congress and it is not limited to the presently constituted Congress. This has been ongoing for 40 + years.
It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.- Pudd'nhead Wilson's New CalendarIt is the foreign element that commits our crimes. There is no native criminal class except Congress.- More Maxims of Mark, Johnson, 1927
[emphasis added - PDN]
Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.- Mark Twain, a Biography
All Congresses and Parliaments have a kindly feeling for idiots, and a compassion for them, on account of personal experience and heredity.- Mark Twain's Autobiography; also in Mark Twain in Eruption
From: "Freeing Yourself From Government - Mark Twain's Congress:" at:
http://www.commonlawvenue.com/Misc/250-Twain'sCongress.htm
- PDN.
MP173 [snip] Rob Krebs (BNSF) looks pretty good right now for his "if you build it they will come" attitude regarding expanding the Transcon 10 years ago. It gave BNSF a huge head start on the UP. At the time, BNSF's shareholders spoke out questioning the expansion. What did Krebs know that UP didnt? These lessons from 100 years ago are still important. ed
UP may have known it then, too (I have no inside knowledge, though). But back then UP was still dealing with the results and fallout of:
" . . . the railroad's meltdown of 1997- 98 that followed Union Pacific's $5.4 billion merger with the Southern Pacific Rail Corp. in 1996" from "Union Pacific Finally Appears to Be Out of Financial Danger", Knight Ridder/Tribune Business News, dated November 21, 1999 [emphasis added - PDN], at:
http://www.encyclopedia.com/doc/1G1-57775267.html
So even if UP saw the opportunity that could be gained by adding capacity, and even if it wanted to, it probably couldn't - it was still too busy and tied up with untangling the merger fiasco. In contrast, the BN-SF merger went much smoother - it was more of an "end-to-end" merger, anyway - and so BNSF got past that and was able to look to the future that much sooner.
You are correct Paul. Sometimes you are too distracted by what you need to do that you cannot do what should do.Not to hijack the thread...but why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC?
Paul_D_North_Jr diningcar [snip] Times have changed and government now influences private and corporate investments through tax policy and because "they know better than we what is good for us". I have very little confidance in our Congress and it is not limited to the presently constituted Congress. This has been ongoing for 40 + years. It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.- Pudd'nhead Wilson's New CalendarIt is the foreign element that commits our crimes. There is no native criminal class except Congress.- More Maxims of Mark, Johnson, 1927 [emphasis added - PDN] Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.- Mark Twain, a Biography All Congresses and Parliaments have a kindly feeling for idiots, and a compassion for them, on account of personal experience and heredity.- Mark Twain's Autobiography; also in Mark Twain in Eruption From: "Freeing Yourself From Government - Mark Twain's Congress:" at: http://www.commonlawvenue.com/Misc/250-Twain'sCongress.htm - PDN.
Sounds like an endorsement of despotism over democracy to me.
Just a thought here on the successful and non-successful mergers. I'd credit the success of the mergers at CN-etc. and BN-SF to the quality of management at the those companies, and, in the latter case, perhaps to it being more of a merger of equals in financial strength, with quality leadership in both companies. That may be a simplistic explanation, but those companies showed that it could be done well.
By contrast, UP did NOT learn from its mistakes in the should-have-been-easy CNW merger, and, after failing to do its homework on just how desperate SP's situation was, jumped into that huge merger and proceeded to throw out the baby with the bath water. It's easy for me to sit here and be critical a decade later, but UP's merger work in the 1990s (which reeked of arrogance) looks like a textbook case of how not to do it. It should become good material for some B-school case studies.
So sorry - I wasn't endorsing the views of that website, nor did I intend to give that impression. I was merely giving credit for my source of that collection of quotes, responding to diningcar's comments.
But I did just look at it briefly, if only to "see what I'd gotten myself into this time" (albeit inadvertently). Actually, it seems to me to be more of a "rant" promoting a form of anarchy rather than despotism.
It's also something of a truism among the American populace that "All Congress-critters are crooks" - except, of course, for the 3 that represent me (2 Senators and a Representaive).
MP173 [snip] Not to hijack the thread...but why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC? ed
garyla's reply (above) sums up a lot of the conventional wisdom on this, and I don't have a huge amount to offer in addition, though I will submit the following for consideration:
Configuration: BN & ATSF was essentially an end-to-end merger, as was CN & IC, and then CN & WC. UP & C&NW was also, but UP & SP had a lot of overlap and divestiture and grants of rights, mainly to the then-also-new BNSF and also to KCS. ConRail to NS & CSX was much different - a "split the baby" kind of thing. For all of the time that the latter had to plan, it should have gone off much better.
Financial Condition: The railroad being acquired was pretty good shape physically & financially in the case of ATSF, IC, WC, and ConRail, but not so much with C&NW, and not at all for SP.
Corporate Culture: Supposedly UP really threw its weight around in the SP merger with the take-over of the SP's facilities and people, and did not consider anything that the SP people had to say or tell them. I can't think of a worse business to do that in than railroading - it's way too easy then to just keep your head down, say nothing more than the required minimum, do exactly what you are told, and no more or no less - and stand back and watch the resulting non-operation self-destruct (melt-down) all over the territory. At least in military combat situations, the primal need for physical survival will usually overcome the natural human impulse to just let some arrogant jerk - at whatever level - get what's coming to him. Out on the railroad, aside from rules violations, there's no such self-preservation imperative to offset that urge for psychological revenge.
Network Operational Planning: Others who are more knowledgable will have better and more accurate comments on this, but here goes. I believe that both BN & CN were using fairly high-level computer-driven planning and studies, often through outside consultants - Multi-Modal and ALK (?) come to mind - before or during those mergers. In contrast, I don't believe that UP, SP, NS, CR, or CSX had gotten into any of that very deeply at the time. Since then, NS has; I'm not sure about the others. This is a case where "failing to plan is planning to fail"; if you don't at least look at the situation, how can you possible know how it's going to turn out ? Also, I recall that some of these mergers were rushed and implemented far more quickly than others, most likely without adequate thought and consideration given to all of the far-ranging effects elsewhere on the systems. Largely as a result of this, for any such mega-mergers the Surface Transportation Board adopted rules and now requires - among many other things - very extensive and detailed network operations planning, submissions, documentation, and analysis, of "before - during - after" scenarios and how to mitigate any adverse impacts or effects that may develop. Again, there are others here more qualified than me who can expand on this if they wish.
MP173 "... why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC? ed
"... why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC?
These were investment mergers based on money rather than thought out, planned operational mergers. On paper it looked good. On a map it looked good. But the merger was decided by investment bankers for the sake of increasing the rates of return and gaining monopolisitic market share by finding ways to save money through layoffs and other cost cutting measures. These were not the guys out on the road running the operations. Following that, there was a smashing together of corporate cultures and and operating philsophies rather than acclimating and blending. The arguement can be made, too, that these were not mergers as much as takeovers similar to Penn Central and Erie Lackawanna. On the other hand, for instance, the formation of CSX as we know it was easier and smoother because the roads involved had already been "family" members or otherwise in the fold for longer periods of time before loosing thier own identities.
henry6MP173 "... why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC? ed These were investment mergers based on money rather than thought out, planned operational mergers. On paper it looked good. On a map it looked good. But the merger was decided by investment bankers for the sake of increasing the rates of return and gaining monopolisitic market share by finding ways to save money through layoffs and other cost cutting measures. These were not the guys out on the road running the operations. Following that, there was a smashing together of corporate cultures and and operating philsophies rather than acclimating and blending. The arguement can be made, too, that these were not mergers as much as takeovers similar to Penn Central and Erie Lackawanna. On the other hand, for instance, the formation of CSX as we know it was easier and smoother because the roads involved had already been "family" members or otherwise in the fold for longer periods of time before loosing thier own identities.
The reason you advance for these mergers occurring comes as a surprise to me and all the people I know and still work with that were involved in creating and implementing them.
But, RWM, at what level are you working? Are you an investment banker or work on the financial end of deciding on the merger or are you the one who was handed the assignment to make it work?
MP173You are correct Paul. Sometimes you are too distracted by what you need to do that you cannot do what should do.Not to hijack the thread...but why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC? ed
What makes you think those "trouble-free mergers" were actually trouble-free!
Two things caused the trouble. 1st, in some cases the scale of the mergers never reached a threshold where the requirements of the integration surpassed the fragility of the all the subsystems to tolerate sudden rearrangement. PRR-NYC was not one of these cases, it was a disaster! and not just red team/green team stuff either. 2nd, in some cases, the mergers were not integrations at all, but just two end-to-end systems that began borrowing things from each other, e.g., BN-ATSF and CN-IC, and there was no need to quickly integrate, and in many ways are not yet integrated to this day. BNSF for example, really runs two dispatching offices under one roof, one Santa Fe and one BN.
UP-SP had no choice but to undergo shock-treatment integration because SP was collapsing.
henry6But, RWM, at what level are you working? Are you an investment banker or work on the financial end of deciding on the merger or are you the one who was handed the assignment to make it work?
If I were an investment banker I would have my minions handle this forum while I lolled on a tropical beach with maidens.
Investment bankers don't run railroads. Railroaders run railroads. Railroads have been singularly intransigent to the hand-over of control and decision-making to Wall Street, unlike some companies and industries. Do you really think Warren Buffett would be buying billions of dollars of rail stock if it was subject to the whimsy of investment bankers?
There's a reason why railroads didn't have anguish over Sarbanes-Oxley, and are not requiring TARP funds, or any of those other embarassments.
As you make my point, RWM. CSX finally got hold of the situtation when they were able to fend off off shore investment groups. Too often mergers are formed in the frame of bleeding out investments without much thought to actual operations. Investment bankers and CPA's sit there an crunch number while you crunch your you know whats trying to make it work.
Paul_D_North_Jr MP173 [snip] Not to hijack the thread...but why did certain mergers in the 90's, primarily UP/CNW, UP/SP and Conrail/NS/CSX have so much difficulty when compared to BN/ATSF and CN/IC/WC? ed garyla's reply (above) sums up a lot of the conventional wisdom on this, and I don't have a huge amount to offer in addition, though I will submit the following for consideration: Configuration: BN & ATSF was essentially an end-to-end merger, as was CN & IC, and then CN & WC. UP & C&NW was also, but UP & SP had a lot of overlap and divestiture and grants of rights, mainly to the then-also-new BNSF and also to KCS. ConRail to NS & CSX was much different - a "split the baby" kind of thing. For all of the time that the latter had to plan, it should have gone off much better. Financial Condition: The railroad being acquired was pretty good shape physically & financially in the case of ATSF, IC, WC, and ConRail, but not so much with C&NW, and not at all for SP. Corporate Culture: Supposedly UP really threw its weight around in the SP merger with the take-over of the SP's facilities and people, and did not consider anything that the SP people had to say or tell them. I can't think of a worse business to do that in than railroading - it's way too easy then to just keep your head down, say nothing more than the required minimum, do exactly what you are told, and no more or no less - and stand back and watch the resulting non-operation self-destruct (melt-down) all over the territory. At least in military combat situations, the primal need for physical survival will usually overcome the natural human impulse to just let some arrogant jerk - at whatever level - get what's coming to him. Out on the railroad, aside from rules violations, there's no such self-preservation imperative to offset that urge for psychological revenge. Network Operational Planning: Others who are more knowledgable will have better and more accurate comments on this, but here goes. I believe that both BN & CN were using fairly high-level computer-driven planning and studies, often through outside consultants - Multi-Modal and ALK (?) come to mind - before or during those mergers. In contrast, I don't believe that UP, SP, NS, CR, or CSX had gotten into any of that very deeply at the time. Since then, NS has; I'm not sure about the others. This is a case where "failing to plan is planning to fail"; if you don't at least look at the situation, how can you possible know how it's going to turn out ? Also, I recall that some of these mergers were rushed and implemented far more quickly than others, most likely without adequate thought and consideration given to all of the far-ranging effects elsewhere on the systems. Largely as a result of this, for any such mega-mergers the Surface Transportation Board adopted rules and now requires - among many other things - very extensive and detailed network operations planning, submissions, documentation, and analysis, of "before - during - after" scenarios and how to mitigate any adverse impacts or effects that may develop. Again, there are others here more qualified than me who can expand on this if they wish. - Paul North.
I'm a little late to this party!
NS did use Multi-Modal to help do the traffic flows for the merger. The big problem was that NS and CSX had absolutely no idea how the CR traffic off the shared areas would split and consequently, planned for the wrong traffic. Both their guesses were off quite a bit. For example, Conrail had two trains a day in and out of Pavonia (Camden, NJ). Both the CSX and NS plans had two trains a day out of Pavonia on split date. Then, pile on that the wrong data tape got loaded at midnight on the split date and that although the patch between the Conrail car reporting and NS systems worked OK, there were timing issues that caused cars to ping-pong back and forth on the railroad. The death spiral began and took ages to dig out of. Then, the railroad still had too much train service for the traffic base - so a second itteration of the traffic flow modelling was done and TOP was born.
There was also some cultural friction between NS and the ex-CR territory. Although NS had hired several top level operating guys, they chose to put two NS guys over the new Northern Region. These guys were not very flexible when it came to doing things the "NS way". Needless to say, there was some backlash from the CR guys at a time when NS needed their cooperation the most. (Both these guys now work at CSX!)
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
henry6 These were investment mergers based on money rather than thought out, planned operational mergers.
These were investment mergers based on money rather than thought out, planned operational mergers.
Murphy Siding Of course they were mergers based on money. What other reason would there be?
The "bad" merger results in a relatively quick profit for the investors who can then move on to another target. It wasn't a merger, but methinks that was pretty much the perception with the CSX/TCI affair.
The "good" merger builds a solid foundation that will continue to provide profits in the long term.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Yes, tree pretty well says it. A merger is of course for the money. But, mergers in virtually all businesses over the past 25 or 30 years have been for a quick return on investment without putting the investors out. The acquired became collateral for boosting stock values or value of the company as a whole so that stock or resale value was enhanced and therefore the investors could borrow against their newly acquired collateral to pruchase more collateral.. That's why there is an immediate cutting of costs rather than bolstering of a company's postion or ability to manufacature more or better products. By defnition there never really was an investment in these cases, just a bunch of mergers and acquisitions. Railroads, financial institutions (banks, insurnace companies, etc.), broadcastiang and print media, computers, and general manufacturing businesses have all been victims of these so called investing situations..
Murphy Sidingerikem PDN, Murphy: As I mentioned earlier, Stan Johnson had brought up Anaconda Copper as one of the reasons that construction of the PCE was approved (in addition to the reasons given by Vance). Johnson undoubtedly put a lot more effort researching the PCE than Vance did (this is not intended as a criticism of Vance), so I'm not surprised that Johnson would have details not in Vance's book. Yes, that might explain the reasoning to run the line as far as Butte. That was the (reletively) easy part to build. But, it wouldn't, on it's own, seem like justification for the line extending to the coast
Note the emphasis on "one" in "one of the reasons". I'm guessing that the PSE/PCE was built as a result of all three scenario's that RWM postulated.
I have to disagree with you. In railroads, for example, can you really say that mergers in virtually all over the past 25 or 30 years have been for a quick return on investment without putting the investors out? It seems to me, that all were driven by economics of the situation.
An investor climate created by investors.
henry6 An investor climate created by investors.
In the last 30 years or so, the major railroad mergers I can think of are: MWK>SOO, SOU/NW.NS, GTW>CN, WP>UP, MP>UP, MKT>UP, CNW>UP, SP>UP, IC>CN, WC>CN, DMIR>CN, DME/ICE>CP, and EJE>CN. All of these seem to be mergers of either economic neccesity, or economic oportunity. They were all made by railroad people, for railroad purposes, whether it was to broaden their marketshare, expand their territory, oroptimize their operations cost. Where do you see any of those as being investor generated for short-term investor gain?
There was of course: CR>NS / CSX, and CRIP>dirt, that may fit the description you put forth.
A side note:You might consider starting a new thread on mergers, as it's an interesting subject that would attract many responces on it's own.
Murphy Siding I have to disagree with you. In railroads, for example, can you really say that mergers in virtually all over the past 25 or 30 years have been for a quick return on investment without putting the investors out? It seems to me, that all were driven by economics of the situation.
There's no question that most of the mergers mentioned were done to save the railroad - which is protecting long-term investment.
My perception of the get-rich-quick merger is that it's a fairly recent phenomenon. Not that it hasn't occurred in the past, or that their haven't been shyster out to get milk all they can out of such transactions since the beginning, but I do think the get-in-gut-it-get-out thing is a product of the past decade or two.
I may be wrong. Food for discussion.
You need to understand what a "leveraged buy-out" is in order to appreciate the differences between those types of "raids" that henry6 is alluding to, and most railroad mergers which are different. Space and time preclude me from a good explanation, but here's a really simple one:
Most railroad mergers mainly involve just the shareholders of the respective railroads as principals. There are always investment banks involved, which line up ("underwrite") the issuance of the new stock and any interim or new debt financing. Important note: In these transactions, the debt is accessory to the primary transaction - usually only to consolidate/ clean-up or simplify the balance sheet or legal aspects of which one is senior, that kind of thing - the debt is not the "driver" of the transaction. Those investment banks* always get their fee, and may participate in some of the stock or debt for their own account one way or another, but that too is minor.
* - "Despite their name, investment banks regard anything over 48 hours as 'long-term'. " - Robert Townsend, former President and CEO of Avis Rent-a-Car from back in the 1960's (of the "We try harder !" advertising slogan fame), in his business book from around then entitled Up the Organization ! (which is a nice double-entendre for those of us who are left-over flower children and hippies from or remember the same era).
In a leveraged buy-out or "LBO", the acquiring entity borrows all or almost all of the money it needs to purchase the company(ies) being acquired. The acquirer then does as henry6 indicates - cuts costs and whatever else it feels it needs to do to bump up the stock price, sells the stock, reaps its profit, and then goes on its merry way (no doubt to "rinse & repeat" = do it all over again with/ to someone else). The goal and purpose is for the acquirer makes its money from the increase in the stock price, without having to come up with or invest much of its own money, as long as the interest costs on the borrowed money and other fees associated with the transaction don't eat up all the profit. Note that in this scenario, a merger may or may not be involved.
More importantly, in the LBO note the presence of a huge amount of new debt - the debt-to-equity ratio will typically be in the 80 to 90 to even the 100 % range, depending on how bold/ aggressive the acquirer is and how credit-worthy the underlying company(ies) is (are), their short-term business prospects, etc. In contrast, most recent railroad mergers did not involve any huge new debt loads, and most railroads keep their debt-to-equity ratio in the 50 % range.
It should be obvious, but just in case it isn't: "debt-to-equity ratio" is very similar to - really, the railroad equivalent of - the "loan-to-value ratio" (LTV") that most of us are familiar with from our home mortgages. Right now everyone is preety much comfortable with an 80 % LTV ratio for mortgages, if the buyer has great credit and the property appraises OK, etc. In contrast, the sub-prime mortgages and other aggressive financing often involved LTVs of 90 to 100, often with "junior" or "secondary financing" add-on or rider mortgages for that last 20 %, such as home equity loans or lines of credit, etc.** See the similarity with the LBOs in the high debt ratio ? Now compare with the debt-to-equity ratio of the usual stolid railroad: 50 %. How many of us would feel really great if we owed only 50 % of the value of our home on a mortgage to the bank ? [Disclosure: Yeah, I'm there, but it took a lot of years.]
** - In the fall of 1980, one of my professors, Prof. Walter J. Taggart, Esq. (who was the law clerk for Judge John P. Fullam when the infamous Penn Central bankruptcy landed in the Judge's courtroom on a Sunday night, and went on to become quite an expert in both banruptcy and railroads) observed of what was then known as "creative financing" - assumed and wrap-around mortgages and the like - that "Creative financing leads to . . . what ? Creative foreclosures !!!" OK, gallows humor, I suppose. But he knew, having seen it first-hand at both the railroad and professional levels with Penn Central and that late 1970's Pres. Jimmy Carter era recession, too.
To conclude: When Norfolk Southern bought its share of ConRail in 1997 or so, it issued one of the largest debt financings in the corporate world up to that time - something like $10 billion. But no one then responsibly thought that it was an LBO, or that NS was "raiding" ConRail. Some of the short-line and regional transactions - spin-offs, acquisitions, and mergers, etc. - in the last like 20 years, though, have had that flavor - my memory and knowledge of the facts is too tenuous for me to names names and point fingers here - I don't want to "tar and feather" someone or some organization unfairly. Maybe someone else can think of some good examples.
Anyway that's this morning's reading in "Corporate Take-Over Finance 101 for Dummies and Non-Majors". Additions, corrections, differences, constructive criticisms, expansions, lonks, etc. will be welcomed for the general education and edification of us all.
EDIT: P.S. - Another couple of important differences are that:
1) The LBO will typically acquire most or all of the shares of the target company(ies), both to obtain voting and Board of Directors control, and to make as much money as possible. In contrast, the railroad merger shares will still be held by pretty much the same diverse and dispersed group of shareholders as before, though no doubt there will be some minor shifting of positions, esp. among those who don't favor the transaction;
2) The LBO will usually hold most of the shares for only a short time - say, a year or two, just long enough for "pillaging" and the share price increase to hopefully take place - then sell ("flip") them to the public at large, and move on to their next conquest. In contrast, the majority of the railroad merger's shares will continue to be held as a long-term investment by the same owners as before (as above), for an average or overall much longer time - like 5 to 10 years, or longer (just to provide some example time frames).
"If it looks like a duck, walks like a duck, and quacks like a duck . . . " - that's how you tell the difference.
OK. So I don't know who I am or where I am. Am I right for the wrong reasons, wrong for the right reasons, right and wrong within in reason, or wrong and right for no reason?
In my defense, I go back to the the 70's when fresh MBA's were brought into supervisory positions on properties like the EL and told to cut expenses. Manpower and thus services were cut to the point where the product at least wasn't the same. For instance, you might have had to drive a truck and trailer up to 50 miles to a railhead instead of across town under the guise of "centralizationizing". Or you'd get a switch every other day instead of one or two time a day because the train only ran one way one day and reverse the next; and if your plant didn't operate Sat., you had to wait until Mon. despite the train running Sat. which it soon no longer did because there was no business for it. And so it went in railroading until trains were running the length of the railroad because there was no reason to stop in between. Scarcastic, yes. But...
The next business to get the same treatement were banks which merged and merged and elimentated branches and services until they became distant, unknown entities. At one time a tenant of mine bounce a check...went to the bank and said "Hey Chip...so and so and so on", to which he replied, "Its OK, we gotcha covered"! Today, I get drilled for my name, account numbers, pin numbers, how long I've been a client of the bank, and asked how to pronouce my name and if I really do live at the address in thier computer, and then they give me a $50 charge.
Another business I am quite familiar with is broadcasting/media. New, big owner comes to town, merges a half dozen stations into one building then proceeds to get rid of long time employees cutting staff in half leaving half the staff to do twice the work. Income dwindles so that all six stations are billing what two used to. So more staff is cut, equipment gets worn out and not replaced. And the owner goes out and buys more stations in other markets. The listener gets a bad product to listen to and the advertiser gets a poorly produced product for a reduced size audience at a higher price. The big owner takes the money out of town for products and services cutting local busineses out of the pruchaseing loop and thus losing them as clients. So owner goes to sattalite feed of programs and gets rid of more employees. If a manger complains of having to work from 5AM to midnight 6 days a week plus 10 hours on Sunday, he might be allowed to hire a high school kid to replace the 30 year veteran. Product suffers more, listener get less, audience shrinks, advertiser (if still around) gets worse commercial and smaller audience again.
So, there is my jade, my cynicism, in three short paragaphs.
henry6 - In a friendly way, I'd say you're partially right, and partially wrong. I'm personally familiar with all 3 of the situations in your 3 paragraphs (although the last 2 mainly as a consumer, not as an "insider"). The intellectual mistake you're making is the fallacy of over-generalizing - understandably carrying valid observations from one - or two - or many - set(s) of circumstances over to other conditions, where they do apply in some instances, and don't in others.
Your E-L example was quite true, then - 30 or 35 years ago. E-L or CR was in a struggle for survival, and that skews what might otherwise be rational decisions. Large organizations make macro-level decisions that don't always make sense or work out on the micro-level, down in the weeds where most of us are, and that's not new either: "Remember, the charge of the Light Brigade was ordered by an officer who wasn't there looking at the ground." - Robert Townsend in Up the Organization ! above (again).
But in the railroad world, that was then, and this is now. Also, the same general set of actions - cutting costs and outsourcing - might have several different causes and purposes in different organizations and times, not always consistently. That's where the short lines have stepped in to fill the voids left by the large railroads, much the same as the new local and community banks fill the voids left by the big ones when they do the things that you describe. (Someone once said that law firms grow and split apart and then merge again like amoebas - I use the "Lava Lamp" analogy instead, which I suspect that you can relate to if you remeber the E-L from the 1970's. Well, banks are of like kind.) The same Robert Townsend also said (in the same book) that big organizations have no idea of what they're doing to themselves, and that we didn't have to fear the Russians (this was back in the "Cold War" days, remember): "We've perfected 'do-it-yourself' methods of self-destruction."
You know the prayer that ends with "God grant me . . . the wisdom to know the difference." ? May I respectfully suggest that you critically analyze each of these situations or changes, and figure out what matters, what is alike, and what is different, in each. Then you will be in a better position to evaluate and judge what is happening. It's certainly not all good, not even in the railroad world - but it's not all bad, either.
Actually there is another level of observation that I have. That is that railroads were one of the first, and probably most familiar, businesses to enter into this merger/investment maze back in the 60's/70/s era. So, yes, today, it is much different as they learned thier lessons of being inadequate to both themselves and their customers and are working their way out of it with plant investment and with the creation of real shortline/regional companies that work. The others I mention are still evolving out of it. The problem being that banks/investment/money businesses got slammed by thier inattention to the future; some call it greed. Broadcasting is still fumbling with their lot, knowing that locally is the best way for an individual property to survive but drowning in too much debt (and still besparkled by the glamour of it all) to find a life raft that will pull them up. Assuming they want to get out of the water. There is still a big shake down cruise coming as the likes of Clear Channel and Citadel are counting their chips by the penny rather by the thousand dollar bills they used to. Governtment and other businesses are in the process of fixing the money business but broadcasters, and others, will have to find ways to work out of their situations. And I really think they will; the price will be steep for them, but the public, and the advertiser, the suppliers, etc., will eventually be better off. I don't believe in true cycles but rather cycles that move forward. Like putting a light on the spot on a wheel and tracing its arcs and circles as it moves across the field of vision.
There are a few more differences here:
1) Again, time frame - the commercial and railroad world now is far different from 30 to 35 years ago. The railroad mergers of the still-ICC-regulated 1960s and 1970s were of course about more money, but mainly for the primary purpose of consolidation for survival. Greed as in getting a lot of money out of the railroad - or the parent "Industries" company as many did - definitely happened in some cases, but not on the magnitude of today's non-railroad deals. Today, they are more for long-term business purposes, not short-term cash-outs. That said, I don't happen to favor any more large RR mergers, either. I think the resulting operation will be another step up the too-large-to-manage ladder, and the same operational results can be achieved by agreements and intelligent coordination without the headaches, regulatory burdens, and public backlash against a large-scale merger.
2) I've thought long and hard about a nice way to say this, and here's what I came up with: The subjects of the 2 non-rail businesses that henry6 mentions above are all intangibles - banks/ finance and broadcasting. They don't make or ship anything that you can touch or lift. As such, they are legal and commercial fictions (or figments of imagination) that those business models have decided to treat as their reality. That's fine for them, but maybe not everyone else goes along with it. Eventually someone decided to point out that "The Emperor has no clothes !". We're now seeing the results of the stripping away of that fiction. You can probably draw the appropriate contrasts with the railroad business model.
I recommend that you read Tom Clancy's fictional Jack Ryan book Debt of Honor (published circa 1994). One of the main plot elements involves an attack on the U.S. - actually, the whole Western world's - financial system by a rogue Japanese industrialist. Near the middle of the book, Clancy has several excellent expositions and excursions by various characters, as well as himself as a kind of Greek chorus, on the nature of our financial system - that it's all psychological, and that's mainly about our confidence in ourselves, our system, and our futures. I don't want to trivialize what you're concerned about or saying, but it's nothing new. Fortunately, it's not universal, either. Don't let the shenanigans of and to a couple of mainly "smoke-and-mirrors" businesses lead you to false conclusions about the rest.
To get this thread back on topic, here are some references to old article in Trains by Robert A. LeMassena that I just dug up using the "Index to Magazines" feature that's linked at the bottom of the page. I've got to talk to the folks about Kalmbach about finding a legitimate way to post these or otherwise make them available to us - they are way too good to just let moulder away in the magazines archives. Meanwhile, all you really need to do is read the titles and subtitles - that'll give you a pretty good idea of what they're about. henry6, the first two are for you !
Church of the Holy Faith (Railroad) Trains, November 1977 page 74 turning railroads into conglomerates hasn't accomplished anything ( "LEMASSENA, ROBERT A.", OPINION, TRN )
Steam out of Scranton Trains, September 1965 page 28 Lackawanna's steam locomotives ( DL&W, "LEMASSENA, ROBERT A.", STEAM, SYSTEM, ENGINE, LOCOMOTIVE, TRN )
Note: Despite the subtitle, I recall this was about more than just the locomotives - it was about the wiole railroad. I also ecall that a sidebar 1-page article was entitled something like "Sights and Sounds along the DL&W". More to the point, I think he had some commentary about the beneficial economic effect of the Lackawanna's big line relocations that we discussed earlier here.
Shorter plus steeper equals faster plus cheaper Trains, August 1970 page 44 accent is now on speed, not tonnage ( "LEMASSENA, ROBERT A.", LINE, LOCATION, TRN )
Selected railroad reading: Numbers Trains, July 1982 page 44 accuracy beyond the decimal point ( COMMENTARY, "LEMASSENA, ROBERT A.", TRN )
And many, many, others.
In the building period of railroads in North America, who was it, that did the *location* work for a rail line? I've seen lots written about the railroad surveyors, scouting out passes, and staking the best route. But who actually decided that building the rail line from point A to point B was a good financial investment for the company? It would seem the BOD would be the folks approving it, but provided the plan being considered?
A locating engineer. Someone with extensive knowledge of economics, geography, railway engineering, railway operation, railway maintenance, agricultural and mining economics, and transportation economics. Yes, they existed. It's what we do today, too, though our arena of play has no buffalo a-roaming through it anymore.
Not a "go-forth and deliver us an answer proposition." A team effort taking a lot of time to study, investigate, research, reconnoiter, plan, conceptually engineer, and estimate.
Step 1: Develop a thorough understanding of the potential and the geography. Lots of people short-cut this stage and rationalize it by saying, "Who knows?" In other words, they generate questions to fit an answer they already decided they were in love with.
Step 2: Run a preliminary survey to generate a cost estimate. A fertile field for incompetents who either are merrily oblivious to the problems or kill the project through lack of creativity and CYA mentality.
Step 3: Review the cost estimate, P&L, and market to determine if there's a business case, and to determine the route, timing, quality of construction to obtain the best business case. For example, the ideal route from a construction cost perspective might be up the middle of a valley, the ideal route from a land-acquisition cost perspective might be on the sterile ridgetop rather than the fertile valley lands, and the ideal route from a traffic perspective might be right on the edge of the valley. All of those thousands of variables have to be sorted out and ranked to make an effective decision, and this is where people usually get bored, lazy, impatient, or default to preconceptions and make bad decisions.
Step 4: If there's a business case, then the board authorizes expenditure on construction. At this point the board is often so far down the path that they rarely say no to a project they have already decided they like, or rarely say yes to a project they have already decided they dislike. It's not a good idea to expect actual due diligence to occur at this stage of the game.
Your question has the premise that locating work ended a century ago. Not so! Today we are locating new passenger railroads both on top of existing corridors and in all-new high-speed corridors, and trying to figure out how we will increase the freight capacity of the nation's railroads by 50% in the next 30 years. In some ways it is more difficult today because there are so many more actors in the play, the corridors are extremely constrained, and the costs are fantastic. It's a slightly different flavor but the game is the same. On the other hand we don't have to sleep in tents, trudge through the mud and snow for thousands of miles, and eat whatever we shoot. On the other hand they didn't have e-mail and Blackberrys and cell phones demanding instant answers 24/7.
Paul_D_North_JrShorter plus steeper equals faster plus cheaper Trains, August 1970 page 44 accent is now on speed, not tonnage ( "LEMASSENA, ROBERT A.", LINE, LOCATION, TRN )
I need to reread that one. I think there's a lot of people who thought it was wrong.
It was only 2 pages long, if I remember right. Depends on how you feel about using GTM/TH (Gross Ton-Miles Per Train Hour") as the primary metric to measure and govern the operation. See also:
Is gross ton miles per train hour valid? Trains, April 1970 page 37 is the ratio a valid indicator of efficiency? ( ANALYSIS, "LEMASSENA, ROBERT A.", OPERATION, TRN )
More correctly, it depends on the operating plan, which should depend on the analyzed and selected market segments, and their associated projected revenues & profit margins, etc.
I think he based it on the D&RGW's "fast & frequent" operating plan, because a couple years later he wrote an article touting that:
How to run a railroad in 1972 Trains, July 1972 page 20 Why Rio Grande threw out the bible ( D&RGW, "LEMASSENA, ROBERT A.", OPERATION, TRN )
I understand that the 1980's French TGV was designed/ located and built using this philosophy, using grades of up to 3% to minimize the route mileage. With the power coming from the catenary and utilizing/ taking advantage of the short-time overload ratings of the motors to run up those grades at close to full speed, the electrification negated the usual downside of doing that, while still having the shorter downhill leg to benefit from
Paul_D_North_JrMore correctly, it depends on the operating plan, which should depend on the analyzed and selected market segments, and their associated projected revenues & profit margins, etc. I think he based it on the D&RGW's "fast & frequent" operating plan, because a couple years later he wrote an article touting that: How to run a railroad in 1972 Trains, July 1972 page 20 Why Rio Grande threw out the bible ( D&RGW, "LEMASSENA, ROBERT A.", OPERATION, TRN )
An article that succeeded in creating a "truth" that never was true. Railfans love a good myth, and once they've latched onto one, you can't pry it even from their cold, dead fingers. D&RGW was a drag-freight railroad dependent upon regulation to keep it in the overhead traffic game. What railfans thought was a high horsepower-per-ton ratio was actually just enough power to trudge up the inclines, and what they thought were short trains were trains that just barely fit into the sidings.
If the D&RGW really had been a faster railroad, it would have enjoyed the perishable traffic, of which it could capture only a tiny smidgen. There was no need for speed for local traffic between Denver and Salt Lake City, as there was very little. But railfans looked at D&RGW trains and UP trains and drew the wrong conclusions because they were fishing for facts to fit their preconceived notions: UP trains were long, heavy, and had very low horsepower because its railroad was double-track and flat. D&RGW trains were short, light, and had very high horsepower because its railroad was single-track with short sidings and steeply graded. But when it came to over-the-road schedules -- which is all the regulated-railroad shipper cared about -- the D&RGW was not competitive with UP.* And once deregulation occurred, the D&RGW was not cost-competitive either.
Everybody loves an underdog.
*D&RGW was competitive on lumber traffic, however, because it was slower. A lumber broker desiring to get a car loading on SP or WP in Oregon or Northern California to a hot market would divert to UP at Ogden or Salt Lake City. If the market was not hot, he would divert to D&RGW and hope for a market turnaround while his car trudged over mountain and dale.
Railway Man Your question has the premise that locating work ended a century ago. Not so! Today we are locating new passenger railroads both on top of existing corridors and in all-new high-speed corridors, and trying to figure out how we will increase the freight capacity of the nation's railroads by 50% in the next 30 years. In some ways it is more difficult today because there are so many more actors in the play, the corridors are extremely constrained, and the costs are fantastic. It's a slightly different flavor but the game is the same. On the other hand we don't have to sleep in tents, trudge through the mud and snow for thousands of miles, and eat whatever we shoot. On the other hand they didn't have e-mail and Blackberrys and cell phones demanding instant answers 24/7. RWM () Um, yeah, I guess it did kind of come out that way. To my credit, I didn't use the phrase 'good old days'. By locating new passenger railroads both on top of existing corridors, are you meaning new tracks where none existed before, or tweeking the current system to provide more slots for more trains? Will our system increase the freight capacity by adding new lines, or by incrementally improving the existing lines-for example Abo Canyon type things?
RWM () Um, yeah, I guess it did kind of come out that way. To my credit, I didn't use the phrase 'good old days'.
By locating new passenger railroads both on top of existing corridors, are you meaning new tracks where none existed before, or tweeking the current system to provide more slots for more trains?
Will our system increase the freight capacity by adding new lines, or by incrementally improving the existing lines-for example Abo Canyon type things?
Murphy Siding By locating new passenger railroads both on top of existing corridors, are you meaning new tracks where none existed before, or tweeking the current system to provide more slots for more trains? Will our system increase the freight capacity by adding new lines, or by incrementally improving the existing lines-for example Abo Canyon type things?
Generally to put any significant quantity of passenger trains onto a freight railroad, unless it's a line with a lot more plant than trains, it will take a lot of new track. Most of the major passenger-train additions being proposed are corridor trains, and most of those proposals will require an additional main track over some or all of the route.
There is almost no capability to tweak the existing infrastructure to create more slots. In some cases new crossovers, acceleration/deceleration tracks, and the like can create more capacity by improving flexibility, and by getting trains on and off the main track faster. Of course all that costs a lot of money. I think you're thinking of inexpensive things to do. There aren't any.
It is almost impossible to permit new rights-of-way -- just ask our friends in the transmission line business, who have been soundly thrashed in their efforts to build new lines. They've encountered a perfect storm of opposition from property-rights/no-new-taxes/don't-you-dare-harm-my-property-values activists and environmental/social justice/green activists, which virtually guarantees 100% opposition from both political parties in any given district. Absent a fundamental shift in U.S. politics, culture, and values, I can't see any major new-line construction in my lifetime.
A very substantial capacity increase has been created through operational changes, namely longer and heavier trains. This came about through the rapid adoption of DPU, but more importantly because the volume increase has made it economical to make trains bigger. We expect trains will continue to grow larger. Right now 135-car coal trains are standard with 150's in the offing. In ten years, maybe 200-car trains. Double-stacks are into the 10,000-foot size now, and that can get bigger, too.
Railway Man Generally to put any significant quantity of passenger trains onto a freight railroad, unless it's a line with a lot more plant than trains, it will take a lot of new track. Most of the major passenger-train additions being proposed are corridor trains, and most of those proposals will require an additional main track over some or all of the route. RWM
An interesting thought was passed on to me last night by a long time friend and even longer rail observer. With today's downturn in freight business, would not the current operators look to passenger rail in general, Amtrak in particular, to fill in the ledgers by occupying otherwise empty tracks?
henry6An interesting thought was passed on to me last night by a long time friend and even longer rail observer. With today's downturn in freight business, would not the current operators look to passenger rail in general, Amtrak in particular, to fill in the ledgers by occupying otherwise empty tracks?
Not unless Amtrak starts paying more than 30 cents on the dollar for the value of the slot and Amtrak is willing to bid fairly for the value of the slot when the freight traffic returns and Amtrak agrees to play nice in Washington on reregulation, on-time performance lawsuits, PTC, liability, etc., and Amtrak agrees that the slot doesn't become a permanent extension of its system.
Amtrak is not the same thing as a corridor operator, however. That's a different game. But I doubt railways are not going to sell short the value of their franchise again. Railways are betting the value of the franchise will continue to increase rapidly and sustain high values for the next 100-plus years. This is not 1971 when most railways were predicting the value of the franchise would continue to fall toward zero.
But if you have a piece of track that is unoccupied for 20 hours a day, how much money is it bringing to the bottom line? If Amtrak or anybody else comes along and offers to fill it for one, ten, what, hours, what is it worth to you? If the track is empty and it is costing you $X.XX per hour to have it sit empty why not work out a deal to get at least that $X.XX per hour back. Not 20 times $X.XX but the cost for the hour(s) used. If you can get $X.XX plys $Y.YY, all the better, but don't get greedy and try to get the whole 20 empty hours back: get what you can and cut your losses. Its what others do with excess inventory: get what they can so it is not a total loss!
First, there's not much track that's empty 20 hours a day that Amtrak would want to run on.
Second, the average daily cost for that empty track - some taxes & insurance, a little incremental maintenance (mainly weather and time-related) - is not all that much, and does not increase if the track isn't used. A fair number is in the range of $1 per foot or $5,000 per mile per year for "plain" track - say, $5 million per year for 1,000 track-miles. What you're addressing is not an increased cost, but really the cost of a "lost opportunity" for additional revenue.
Thirdly, that empty track opportunity will probably last only a year or two - then we're going to be right back where we were a year ago, with many lines jammed to capacity. Then I won't want Amtrak there, but I'd be stuck with them anyway, likely forever more. So the choice is between a few cents more income today, or many dollars of lost income in 2 -3 years. In view of that, I'd prefer to "suck it up" today and "eat" the empty track cost for the time being.
Fourth, I doubt if any passenger operator can get set up and commit to a funding level to pay for that empty track in less thatn 3 years, and more likely 5 to 10 years.
If I were a railroad manager - and I'm track-oriented - I'd rather be inclined to be thinking about using all that available track time to do some time-consuming maintenance now, instead of waiting for when the traffic is busier, and instead of letting a passenger operation preclude my maintenance window.. Things like surfacing don't use a lot of cash expeditures - a few dollars for some extra stone is all, maybe some tie replacements (which deteriorate with weather as well as traffic), grade crossings, interlockings, but not rail - no traffic, no wear on it.
Lastly,excess inventory is a 1-time thing (hopefully) - once you liquidate it, it's gone. But the empty track and Amtrak come back every day, this year, next year, and the year after that, too, and so on. The present value of that lost opportunity for freight revenue is pretty big.
It would be interesting to quantify the magnitude of the revenues that a typical freight train earns, as opposed to a passenger train. There's enough public info to do the freight aspect pretty easily, I think. Maybe when I have a moment I'll do that - inutitively, I believe it'll be shockingly large. What I don't know where to find is what Amtrak typically pays per train-mile. Anybody here have a handle on that ?
The biggest problem the railroads have with Amtrak is that it does not pay ANYTHING for the use of the track. The Class I railroads are subsidizing ATK to the tune of 100s of million dollars but it is hidden so well that very few understand it. IIRC the same thing happens to ATK on the NEC where it can not charge the commuter operators for slots.
Mac
henry6But if you have a piece of track that is unoccupied for 20 hours a day, how much money is it bringing to the bottom line? If Amtrak or anybody else comes along and offers to fill it for one, ten, what, hours, what is it worth to you? If the track is empty and it is costing you $X.XX per hour to have it sit empty why not work out a deal to get at least that $X.XX per hour back. Not 20 times $X.XX but the cost for the hour(s) used. If you can get $X.XX plys $Y.YY, all the better, but don't get greedy and try to get the whole 20 empty hours back: get what you can and cut your losses. Its what others do with excess inventory: get what they can so it is not a total loss!
In other words, go ahead and sell short the value of the franchise to realize a tiny revenue stream, and hope when the freight traffic returns, that Amtrak will say thanks for the opportunity, and politely go away and all the politicians, political activists, and the public will be grateful and understanding.
Is there even one end-to-end corridor in the U.S. that Amtrak currently uses or any corridor passenger operator proposes to use, including terminal trackage on each end, that has spare capacity going begging at this time sufficient to reliably schedule a passenger train without getting in the way of freight trains? There's plenty of lousy secondary trackage and branch lines that might fit the bill so long as the passenger train operator is willing to terminate the train and throw everyone onto a platform on the outskirts of the suburbs. Not too many operators are thinking of that, however.
First, some portions of my prior post for context:
Paul_D_North_Jr [snipped] Second, the average daily cost for that empty track - some taxes & insurance, a little incremental maintenance (mainly weather and time-related) - is not all that much, and does not increase if the track isn't used. A fair number is in the range of $1 per foot or $5,000 per mile per year for "plain" track - say, $5 million per year for 1,000 track-miles. [snips] It would be interesting to quantify the magnitude of the revenues that a typical freight train earns, as opposed to a passenger train. There's enough public info to do the freight aspect pretty easily, I think. Maybe when I have a moment I'll do that - inutitively, I believe it'll be shockingly large. What I don't know where to find is what Amtrak typically pays per train-mile. Anybody here have a handle on that ?
[snips]
OK, here goes, from BNSF's 4th Quarter 2008 "Investor's Report", page 11 (13 of 17), at:
http://www.bnsf.com/investors/investorreports/4Q_2008_Investors_Report.pdf
For Coal: $14.05 per 1,000 Revenue Ton-Miles.
135 cars in a typical train at 110 tons capy. ea. = 14,850 - say, 15,000 Rev. Tons per Train.
Train Revenue per Mile = 15,000 Rev. Tons x 1 Mile x $14.05 /1,000 Rev. Ton-Miles = $210 Train Rev. per Mile.
At a typical speed of 20 MPH, that train is earning -
20 Miles / Hour x $210 / Mile = $4,200 per Hour.
For Intermodal: $50.06 per 1,000 rev. Ton-Miles
Say, 300 containers in a typical double-stack train of about 9,000 ft. length (60 ft. per box to include the car underneath, 2 high, at 20 tons each) = 6,000 Rev. Tons per Train.
Train Revenue per Mile = 6,000 Rev. Tons x 1 Mile x $50.06 /1,000 Rev. Ton-Miles = $300 Train Rev. per Mile.
At a typical speed of 30 MPH, that train is earning -
30 Miles / Hour x $300 / Mile = $9,000 per Hour
Simple Conclusion:
So, my hypothetical 1 mile of empty track - which might cost $5,000 per year or merely $15 per day to maintain 1 mile of track "as-is" without any traffic over it - could also support trains that would earn from $210 (coal) to $300 (intermodal) for each train that runs over that 1 mile. And of course, if it's empty 20 hours a day, probably 20+ such train could be accomodated. Those trains could earn the railroad from $4,200 (coal) to $9,000 (intermodal) per hour. In view of those numbers, is it any wonder why railroads love intermodal ? (I know, their cost structures are in nowise alike, but then again the IM is imposing something like half less gross ton-miles than the coal train.) And, to this point, what can Amtrak put on there that will even begin to match that revenue stream ? Why would a responsible railroad manager even risk giving up one of those trains slots for the "goose that lays the golden eggs" for a proverbial turkey like Amtrak, or any other passenger train ? (I know, "Cheap shot !", but I couldn't resist).
Railway Man [snip] Is there even one end-to-end corridor in the U.S. that Amtrak currently uses or any corridor passenger operator proposes to use, including terminal trackage on each end, that has spare capacity going begging at this time sufficient to reliably schedule a passenger train without getting in the way of freight trains? There's plenty of lousy secondary trackage and branch lines that might fit the bill so long as the passenger train operator is willing to terminate the train and throw everyone onto a platform on the outskirts of the suburbs. Not too many operators are thinking of that, however. RWM
There's plenty of lousy secondary trackage and branch lines that might fit the bill so long as the passenger train operator is willing to terminate the train and throw everyone onto a platform on the outskirts of the suburbs. Not too many operators are thinking of that, however.
You know, maybe those passenger operators should think harder about that [no, I'm not being facetious], at least in some areas. Here's why:
We all know that our beloved and valuable freight trains are pretty inflexible in their routes - they've got to get to the docks or the power plant or the class yard or whatever, and there aren't many good routes anymore to accomplish that. So the freight trains should have "1st dibs" on the good freight routes and time slots as a matter of necessity and economics - no question there.
However, in lots of cities - esp. here in the NorthEast - there are (were) multiple routes, built by several railroads, extending outward from each city, usually in a radial pattern. Many of those routes are not used any more, but maybe they should be. In other words, put the passengers on the unused routes or routes that are less-than desirable for freight, so as to minimize the passenger traffic on the good freight routes.
The key to this is recognizing and taking advantage of the fact that commuter-type passengers essentially self-haul themselves to the nearest or most convenient train station - they have a lot of flexibility in that ! Given a choice, most commuters shouldn't really care [big assumption, I know, but bear with me here] if they drive 3 miles west or 2 miles east to the nearest station, particularly if the new or "alternate" pasenger route can be made somehow more convenient or better, like with easier or cheaper parking or a faster trip to the destination over a line dedicated to passenger trains that's not cluttered up with . . . freight trains.
For example, consider 2 of the former Reading Railroad's lines: The one to the northwest along the Schuylkill River to Pottstown and Reading is now a NS main that is coveted for a parallel transit operation of some kind with a $1 billion price tag, if I recall correctly. However, the outer portion of the former Bethlehem Branch to Bethlehem - which has some adverse grades, but also used to go to NS's large modern Allentown Yard - was "taken out of service" in the early 1980s, and the tracks just removed last fall. A plausible scenario would be to restore that line to service, and trade capacity on it to NS for some on the other line. Or, restore other lines closer in to take up some of the needed passenger capacity, and keep the pressure off the freight mains. Here in northern Philly, the commuters could pretty much equally well use either SEPTA's Manayunk, Chestnut Hill - East, Chestnut Hill - West, or the Norristown (also along the Schuylkill River) line, instead of the NS main.
Further, a lot of economic development / growth and jobs here in the NE is happening in the suburbs, not in the center city cores. For example, I'm thinking of the King of Prussia - Valley Forge - Collegeville areas, which are about 15 to the north of Philadelphia here, and have many big pharma and high-tech companies located there. That's not good for the cities, but that's the reality for contemporary urban transportation. In view of that, throwing people onto a platform on the outskirts of the suburbs may be closer to what the market actually wants and really needs than we realize. No need then, to clutter up the inner main lines to the Delaware River ports, for example, with those trains.
Well, just a thought, for what it's worth.
henry6 An interesting thought was passed on to me last night by a long time friend and even longer rail observer. With today's downturn in freight business, would not the current operators look to passenger rail in general, Amtrak in particular, to fill in the ledgers by occupying otherwise empty tracks?
Passenger trains don't make money, therefore, they can't or won't pay their share of what the slots are worth.
The rail lines that have some opening are probably not the same lines that would be needed by passenger trains.
There is no excess passenger equipment to expand passenger trains. You can't move more passengers on equipment that doesn't exist.
When freight business picks back up, the added passenger trains would have to get pitched back out of the system. (Which, might not be as difficult as it sounds. When the freight business rebounds, the passenger train people will still be looking for that non-exixtent equipment)
It's not going to happen, because it wouldn't help out the freight railroads.
I am actually surprised and appalled at the negatavism that is put forth in the arguements here. First, if an entity comes to a railroad and wants to purchase space, or whatever you want to call it, on the railroad's track, the problem of whether or not it makes money is on the shoulders of the one operating the service and not the railroad. But beyond that, I cannot see any business letting its plant sit idle when there is an opportunity to earn money even enough to break even. If, as Paul and RWM say, it is now a time for the railroad to rebuild, fix the infrastructure, etc., then it probably is a good time, too, to test a given service and find its marketability. What if the passenger train works out to be a good service and earns its way. And if it does it helps the host railroad get income to pay for infrastructure maintenance. If I am accused of dealing in too many generalizations, then the dismissal of the idea without looking at a given situation, what could be negotiated, what could happen, is not just as much a generlization but also a major negative approach to business: we've never done it before so why should we do it now? what if it doesn't work? what if it is a success and we're saddled with making money? Come on guys, give innovation, give progress, give yourself a break and think positive. The kind of thinking, this attitude, is probably what's wrong with the thinking of railroad management today! "Ignore it, it should go away. At least until next year after I've retired."
RWM brings up important items that I feel that many of our passenger advocates seem to forget. There have been many threads that touch on how capacity of any line is affected and how its fluidity is affected. Here is a very small fractional summary.
1. One is the vertical profile of any line. The FEC is flat as a pancake so no hills to slow any train down. Contrast that to the DRG&W line out of Denver. This leads RRs to have HP to ton ratings of each line segment. Only so much drawbar pull can be applied to a train before causing a pull apart. DPU can only help so much so the train slows down on hills.
2. Curvature is another problem as if there are too many degrees of curveature the train may stringline derail. Plus curves slow down the train. Even FEC will see a train slow down on curves even though the train is at a constant throttle position.
3. HP on a train is detrmined upon its priority. Drag freights - just enough to get over the road's ruling grade. VS. high priority intermodal enough HP to get over the ruling grade at max track speed.
4. Traffic mix: If the track section has only one kind of traffic then many trains can pace each other. Example the powder river coal trains. 125 cars now, same train weight, even load distribution, DPU etc. UP's and BNSF's transcons come close as most traffic is one speed intermodal. But even FEC's track has many 70MPH intermodals but runs a lot of rock trains from MIA at a maximum of 50 MPH. Throw in on any route a dimensional or other speed limited special and things can gum up rapidly.
What does this lead to? I would love to be able to operate my RR section with all trains at one speed. Boy can I handle a lot of trains but that is not realistic so my capacity is limited for all the above factors + maintenance windows and more restrictions not considered. If you add trains that are going twice as fast as present freight traffic you need two or three tracks to handle all the present traffic and keep them separated. Think what it is like when you are on a two lane interstate in your porsche traveling 125 and you come up and have to wait for a 2 mile long tractor trailer going 60MPH passing another 2 mile long tractor trailer going 55MP. OOPS - that slows you down for a minimum of 25 minutes not counting distance to get front to back separation.
Now throw in a new Medium Speed Passenger Rail (MSR 80 - 125 MPH my definition)(HSR above 125 MPH). Now for assumptions. Any route that will get MSR will probably be designed for daytime hourly or every other hour service. Since most of the route will probably use present ROWs except where curve straightening is required then the route is going to need a new track built to Class 7,6,or 5 standards. Where possible this track shoud be 25 ft away from the existing track to prevent slow downs due to maintenance on either track. Although I would expect the track structure to be built to 300,000# + load limits there would probably not be too much freight traffic on the new passenger tracks. (ton mile charges for freight use of the MSR rail line might be an incentative).
SIDINGS - High speed probably every 15 minutes of passenger train travel to allow passing of opposing passenger trains and the length to be in the 20,000 ft range to prevent slowing for meets. These sidings could be between the present freight tracks and new passenger tracks for dual use. FREIGHT SERVICE SIDINGS - A whole other problem. Those areas where there are industries on both sides of the ROW requiring a passenger track in the center WITH A flyover or duck under to get there and at least a freight main on one side and a service siding on the other side. Of coure there will be locations that even two tracks on the ROW may be impossible without expensive building and land purchases.
All this is for present single track lines with passing sidings. In those areas already double or triple track all the above items apply requiring another track. The only saving grace is that with three or more tracks the center track may be used for the passenger track with flyovers or duck unders to and from stations. If the traffic mix is many different speeds a middle track would need duck unders or flyovers at the locations of freight crossovers.
Examples of the afore mentioned problems and possible solutions. ( I'm not an alignment engineer so this is just observations. Charlotte - Greensboro: NCDOT has this line planned to return to all double track by the end of 2010. Not knowing NS's total traffic load I don't know if any additional sidings or third track will be needed but suspect it will. Greensboro - Raleigh. There it will definitely need another track because the present alignment already has 10 - 15 slow sections (70 MPH or lower) needing relocation. Raleigh - Petersburg: S line another MSR track to Norlina and then just track with 15 minute passing sidings ( can start out 30 min but that assumes all on time operation. If certain businesses want to locate on the line then probably only night time freight service would be available for them. The issue of detour traffic off the A-line will need to be addressed for both AMTRAK and CSX (and it will happen sooner or later)( maybe no more Auto train Greensboro detours.
I have doubts of running the Petersburg line through downtown and instead think it should pass west of Petersburg as one of the alternatives depicts. (would save about 10 minutes travel time). Petersburg - Richmond: The common use of the A-line to Centralia then S-line to Main Street stationt would definitely require a third track on the A-line and a second track on into Mainstreet Station to cover for freight service to the Richmond Deepwater Terminal. Richmond - Wash: At the moment CSX is limiting VRE from more trains because of track restrictions. Each section that becomes third track allows for more VRE service. But to handle MSR (90 min Wash - Ric) a 4th track on most of the RF&P will be needed north of Fredericksburg until VRE goes onto Richmond then all the way. If the MSR follows the old C&O ROW from AM junction to somewhere near Pleasant Hill as has been proposed thereby bypassing Doswell then only 3 tracks probably needed from Plesant Hill to Richmond AM junction. The only other additions would probably a extra bridge over the Potomac (Long Bridge), with 4 tracks to Virginia Ave Junction, and maybe a second Capitol Hill tunnel to Wash Union Station.
Wash Union Station/Ivy City yard will need additional storage tracks but VRE and MARC claims there is very limited land but the storage tracks are desperately needed. AMTRAK would also need more storage to service, stage, and repair the additional equipment. North on the NE corridor additional tracks up to 4 for the route to Philidelphia including new tunnels at Baltimore. The trains south of Washington would add to the traffic count north of Washington. As it is AMTRAK has not allowed MARC to add frequencys to the NE corridor with the present track count and configurations. When the Catenary is finally upgraded on the NE corridor the added metric of higher speed ACELAs on the route (hopefully 150+ MPH) adds another different speed trafic mix. Right now during many rush hour times the MARC trains hold all train speed down because of fleeting in both directions and a MARC train late.
With a few exceptions grade crossing (rail and road), bridge upgrades to take the higher speeds, and other additional items have been left out of this post. Maybe later I will address other routes.This one is presented because of some familarity of the route and this route is somewhat along in the vetting process. .
Blue streak 1
henry6 I am actually surprised and appalled at the negatavism that is put forth in the arguements here. First, if an entity comes to a railroad and wants to purchase space, or whatever you want to call it, on the railroad's track, the problem of whether or not it makes money is on the shoulders of the one operating the service and not the railroad. But beyond that, I cannot see any business letting its plant sit idle when there is an opportunity to earn money even enough to break even. If, as Paul and RWM say, it is now a time for the railroad to rebuild, fix the infrastructure, etc., then it probably is a good time, too, to test a given service and find its marketability. What if the passenger train works out to be a good service and earns its way. And if it does it helps the host railroad get income to pay for infrastructure maintenance. If I am accused of dealing in too many generalizations, then the dismissal of the idea without looking at a given situation, what could be negotiated, what could happen, is not just as much a generlization but also a major negative approach to business: we've never done it before so why should we do it now? what if it doesn't work? what if it is a success and we're saddled with making money? Come on guys, give innovation, give progress, give yourself a break and think positive. The kind of thinking, this attitude, is probably what's wrong with the thinking of railroad management today! "Ignore it, it should go away. At least until next year after I've retired."
Murphy Siding henry6 I am actually surprised and appalled at the negatavism that is put forth in the arguements here. First, if an entity comes to a railroad and wants to purchase space, or whatever you want to call it, on the railroad's track, the problem of whether or not it makes money is on the shoulders of the one operating the service and not the railroad. But beyond that, I cannot see any business letting its plant sit idle when there is an opportunity to earn money even enough to break even. If, as Paul and RWM say, it is now a time for the railroad to rebuild, fix the infrastructure, etc., then it probably is a good time, too, to test a given service and find its marketability. What if the passenger train works out to be a good service and earns its way. And if it does it helps the host railroad get income to pay for infrastructure maintenance. If I am accused of dealing in too many generalizations, then the dismissal of the idea without looking at a given situation, what could be negotiated, what could happen, is not just as much a generlization but also a major negative approach to business: we've never done it before so why should we do it now? what if it doesn't work? what if it is a success and we're saddled with making money? Come on guys, give innovation, give progress, give yourself a break and think positive. The kind of thinking, this attitude, is probably what's wrong with the thinking of railroad management today! "Ignore it, it should go away. At least until next year after I've retired." If American railroads were to quickly jump on passenger service in order to make some cash, knowing full well that they would have to relinquish this traffic later at great cost, they would surely be seen as going for the quick buck without any long term investment and strategy.
I am not going for the quick buck...I am going for new thinking, new planning, expanded minds, expanded business, new money, new ideas, thinking outside the boxcar, whatever you want to call it. I want to see the same old same old thinking of how a railroad was run thrown away and a new thinking of how a railroad could or might be run now and in the future brought to the table.
Henry6, you have said the following above (my emphasis added):
“But if you have a piece of track that is unoccupied for 20 hours a day, how much money is it bringing to the bottom line?”
“If the track is empty and it is costing you $X.XX per hour to have it sit empty why not work out a deal to get at least that $X.XX per hour back.”
“If you can get $X.XX plys [plus] $Y.YY, all the better, but don't get greedy and try to get the whole 20 empty hours back: get what you can and cut your losses.”
“I am not going for the quick buck...I am going for new thinking, new planning, expanded minds, expanded business, new money, new ideas, thinking outside the boxcar, whatever you want to call it.”
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My response:
When they don’t go after the lost revenue from those 20 hours per day, to you, it looks like they are not thinking out of the box. Maybe the fact is that they are just trying to not be greedy. You know, get what they can and cut their losses, as you say. You seem to see their glass as half empty, but maybe it is actually half full.
And, incidenlty, let me add that I am not just talking about passenger service...I am talking about anybody who walks into the railroad office and wants to buy: it is a perfect time for them to explore new avenues of income and find out what they might have to or want to do to get it.
henry6 And, incidenlty, let me add that I am not just talking about passenger service...I am talking about anybody who walks into the railroad office and wants to buy: it is a perfect time for them to explore new avenues of income and find out what they might have to or want to do to get it.
Right now, our company, and 1,001 of our dearest competitors are, at this very moment, exploring every new avenue of income under the sun. To suggest that a railroad, or any other business in the country right now is just sitting on their hands and not doing this, is to suggest that you are either far removed from the business world, or terribly underestimating the spirit and strength of American business and railroading in particular. You are wrong.
I don't follow all the minutiae of blue streak 1's post above from 7:51 PM on 02-11-2009, but I can relate to this part of it:
"Think what it is like when you are on a two lane interstate in your porsche traveling 125 and you come up and have to wait for a 2 mile long tractor trailer going 60MPH passing another 2 mile long tractor trailer going 55MP. OOPS - that slows you down for a minimum of 25 minutes not counting distance to get front to back separation." [emphasis added - PDN]
As RWM and maybe others have told us, the required length of passing sidings for trains to get around each other is horrendous. A couple weeks ago I worked out in my head something like a 60 MPH intermodal passing a 40 MPH manifest or coal train - each 10,000 ft. long, and moving at a constant speed - and also came up with a figure in the 25-mile range. Here's how the approximate math works:
Difference in speeds = 60 MPH - 40 MPH = 20 MPH
20 MPH x 1.5* ft./ sec. = 30 ft. / sec. difference, that the faster train will gain on the slower one.
* 1 Mile Per Hour = 5,280 Ft. per Mile / (60 mins. per Hr. x 60 Secs. per min.) = 1.47 Ft. Sec. - use 1.5 Ft. / Sec. for simplicity.
For each 10,000 ft. (2 miles) that speed difference has to overcome, it will take:
10,000 ft. / 30 ft. / sec. = 333 secs. = 5.56 mins., say 6 mins.
When this passing maneuver starts, the intermodal train will have to be at least 1 block = 10,000 ft. behind the coal train, as the tail end of the coal train finishes moving into the 40-MPH siding and the mainline turnout (No. 20 ?) returns to the Normal = fast position for the intermodal train, for the intermodal to avoid seeing a red block signal (maybe more - RWM or someone else can tell us). The front of the IM then has to come up even with the tail of the coal train, which is the 1st 10,000 ft. Then the front of the IM has to progress along the length of the coal train until the locos are even, so that's another - 2nd - 10,000 ft. Then the IM has to pull out ahead of the coal train until the tail of the IM is just even with the locos of the coal train, which is another -3rd- 10,000 ft. Finally, the tail of the IM has to be at least another 1 block = the 4th - 10,000 ft. ahead of the coal train's locos before the coal train can return to the main where the IM just was (via another No. 20 turnout ?), so that the coal train doesn't see a red block signal then.
So that's a total of 40,000 ft., or 7.58 miles = 8 miles practically, as a minimum distance that the IM has overcome i order to overtake and pass the coal train. At 5.56 or 6 minutes for each 10,000 ft. increment, that's 22 to 24 minutes = 22 to 24 miles for the 60 MPH (= 1 mile per minute) intermodal train. And if RWM or someone else tells me that no, a minimum separation of 2 blocks - of 10,000 ft. each - is needed for each train to reliably avoid seeing a red or speed-restricting yellow signal during this passing maneuver. That would add another 20,000 ft. to overcome, or another 11 to 12 minutes and another 11 to 12 miles, for a total of 33 to 36 miles.
Other values for these numbers could be used ("YMMV" = Your Mileage May Vary !), but the conclusions will be similar. Practially, that has to be getting close to a 40-mile long passing siding, which may as well be effectively a another main track. It feels like this entire maneuver would take those two trains halfway across Nebraska to consummate !
I certainly hope so! But the tone of some postings here in reply to my suggestion was that the status quo is. The old good enough is good enough, someday things will [may] turn back around and all will be hunky doree again. I am just saying that a downturn in business or unused inventory is an opportunity to explore new routes of income, new services, new adaptations if necessary. And so what if it is short term? If it is not good, then short term might be too long. If it is good, then short term is a good breaking in period. You don't know unless you try.
henry6 And, incidenlty, let me add that I am not just talking about passenger service...I am talking about anybody who walks into the railroad office and wants to buy: it is a perfect time for them to explore new avenues of income and find out what they might have to or want to do to get it. [emphasis added - PDN]
Are you familiar with the story of "Death Valley Scotty" ? He was a miner who struck it rich. Back in July 1905, he chartered a special short passenger train on the AT&SF from California to Chicago, pretty much just for the heck of it to see how fast they could do it ? The trip was made with specially selected locos and enginemen and a couple of reporters on board, closely supervised by ATSF officials. It's something of a legend:
"The entire nation followed the “Coyote Special.” As the train sped along the 2,265-mile journey, bulletins were flashed from the railroad to the press. Cheering crowds lined the tracks.
When the train arrived at Chicago’s Dearborn Station on July 11 at 11:45 a.m., two days later, it had covered the entire distance in 44 hours, 54 minutes, breaking the old record by nearly eight hours. The record would stand unmatched for more than 30 years, until the advent of diesel locomotives."
- From a 2002 article in the Los Angeles Times, at: http://articles.latimes.com/2002/jul/28/local/me-then28
EDIT - add: Good grief, there's a ton of more info on this in the Wikipedia article at: http://en.wikipedia.org/wiki/Scott_Special
Paul_D_North_Jr henry6 And, incidenlty, let me add that I am not just talking about passenger service...I am talking about anybody who walks into the railroad office and wants to buy: it is a perfect time for them to explore new avenues of income and find out what they might have to or want to do to get it. [emphasis added - PDN] Are you familiar with the story of "Death Valley Scotty" ? He was a miner who struck it rich. Back in July 1905, he chartered a special short passenger train on the AT&SF from California to Chicago, pretty much just for the heck of it to see how fast they could do it ? The trip was made with specially selected locos and enginemen and a couple of reporters on board, closely supervised by ATSF officials. It's something of a legend: "The entire nation followed the “Coyote Special.” As the train sped along the 2,265-mile journey, bulletins were flashed from the railroad to the press. Cheering crowds lined the tracks. When the train arrived at Chicago’s Dearborn Station on July 11 at 11:45 a.m., two days later, it had covered the entire distance in 44 hours, 54 minutes, breaking the old record by nearly eight hours. The record would stand unmatched for more than 30 years, until the advent of diesel locomotives." - From a 2002 article in the Los Angeles Times, at: http://articles.latimes.com/2002/jul/28/local/me-then28 - Paul North. EDIT - add: Good grief, there's a ton of more info on this in the Wikipedia article at: http://en.wikipedia.org/wiki/Scott_Special
Paul, if another "Scottie" showed up today with a similar proposal he may not have enough money, even with the current slowdown. The disruption of the TRANSCON, and the ancillary disruptions, would be difficult to compute. In 1905 Santa Fe was promoting the passenger business and considered this a public relations project. Several RR's did gooffy things back in those times - the MKT had two trains stage a head on with unmanned trains starting toward each other from either side of a valley, and had advertised it so there would be spectators.
Regarding taking on passenger service in these 'lean times', that would be like pregnancy with no option for abortion. The public, with their legislators, would make it very difficult or impossible to terminate.
Paul_D_North_JrAs RWM and maybe others have told us, the required length of passing sidings for trains to get around each other is horrendous. A couple weeks ago I worked out in my head something like a 60 MPH intermodal passing a 40 MPH manifest or coal train - each 10,000 ft. long, and moving at a constant speed - and also came up with a figure in the 25-mile range. Here's how the approximate math works:<edit for space>Other values for these numbers could be used ("YMMV" = Your Mileage May Vary !), but the conclusions will be similar. Practially, that has to be getting close to a 40-mile long passing siding, which may as well be effectively a another main track. It feels like this entire maneuver would take those two trains halfway across Nebraska to consummate ! - Paul North.
In practical terms, the amount of "wrong-hand main" that will be used up for a runaround in reasonably flat CTC territory where both trains keep moving at their best possible speed is ~ 40 miles. This is presupposing there are no opposing moves wanting to use that other main track during this event. It still takes a very good dispatcher to get away with it, and a smart ACD or Chief will only let a good dispatcher attempt it. If you have that kind of low train density on a consistent basis that you can do stunts like this, you are maintaining an awful lot of track that is not being paid for by the traffic. Rail operations is the science of balancing expense with revenue. A solution that optimizes revenue will be very expensive to implement. A solution that optimizes expense runs zero trains.
The RTC tool is used to model runaround scenarios in specific terrains, which saves a great deal on all the pencil, paper, and calculator work that Paul did above. This enables accuracy for a specific terrain with specific grades, speed restrictions, wayside signal locations, wayside signal aspects, etc. Then I look at it and see if it makes any sense. Sometimes the model does some dumb things, or the modeler has toggles turned on that make the model a little more aggressive than would happen in real life.
diningcarRegarding taking on passenger service in these 'lean times', that would be like pregnancy with no option for abortion. The public, with their legislators, would make it very difficult or impossible to terminate.
A graphic and utterly true analogy.
diningcar [snip] Paul, if another "Scottie" showed up today with a similar proposal he may not have enough money, even with the current slowdown. The disruption of the TRANSCON, and the ancillary disruptions, would be difficult to compute. In 1905 Santa Fe was promoting the passenger business and considered this a public relations project. [snip]
HAH ! Good point ! Using the figure of $9,000 revenue per hour for a typical intermodal train that I developed in my post of 11:52 AM yesterday (02-11-2009), for a 40 hour trip "window" that would be $360,000 or so - probably more like twice that to allow for contingencies, extra supervision, disruption to other trains along the way as you mention, etc. But if I had a spare $ Megabuck I might call Matt Rose up and ask if he too wants to do something to earn a good buck and capture the nation's attention and get it off the other silliness in all of its various forms . . .
Two things: Death Valley Scotty was a one time thing. He himself was not looking to run fast non stop passenger service to Chicago. But, ironically, he did show the Sante Fe what might be done if they really wanted to do it. But that's not what I am talking about here..
I am not saying any service should be started just because somebody comes to the door with the need or idea...again I am not just talking passenger train here...but the customer and the railroad have to work out an agreement. It would be assumed that some kind of market research has been done and planning, etc. of some kind, too...real business people with business plans and understandings and not pie in the sky railfans. If it is to move logs, cars, people, coal, whatever, it has to have a business plan and an understood markting concept. Why do the business experts here keep slamming the door on innovation and possible growth by dismissing an idea out of hand and suggesting that the railroad do the same.
Railway Man In practical terms, the amount of "wrong-hand main" that will be used up for a runaround in reasonably flat CTC territory where both trains keep moving at their best possible speed is ~ 40 miles. This is presupposing there are no opposing moves wanting to use that other main track during this event. It still takes a very good dispatcher to get away with it, and a smart ACD or Chief will only let a good dispatcher attempt it. If you have that kind of low train density on a consistent basis that you can do stunts like this, you are maintaining an awful lot of track that is not being paid for by the traffic. Rail operations is the science of balancing expense with revenue. A solution that optimizes revenue will be very expensive to implement. A solution that optimizes expense runs zero trains. [snip; emphasis added - PDN] RWM
Thanks for confirming the 40-mile conclusion with your real-world insight. The essential conclusion, of course, is that putting any train with a differential speed requirement on a line with tight operations is inevitably and unavoidably going to be either hugely disruptive and hence unacceptable to the railroad, or else hugely expensive to mitigate, and hence unaffordable for someone. When you think of adding a "plain" single track at $1 - 2 million per mile, plus the interlockings at each end and crossovers every 10 miles in between, that siding is going to cost at least $40 to $80 million, plus any special structures (sure to be a few) - say, $100 million. And what - 3 to 5 years to design permit, build, and accept ? That's why no new passenger trains will be added to any busy main line anytime soon. And when they are, the invitation will be like to a high-stakes poker game: "Show up - and bring money !"
LOL (again !) at your last statement, too. Don't you just love how many CEOs and business people focus on that - only ? As you know, of course, the optimal solution is the one that maximizes (long term) net revenue, which is the difference between revenue - expense. A minor mathematical* and technical point - that's not the absolute balance between the two, but instead the solution = operation where each $1.00 change in revenue will have the effect of a $1.00 change in expense in the same direction - both increase, or both decrease. Anything else is by definition sub-optimal. And anyone who has either the judgment or crystal ball to discern that point in all situations with accuracy, precision, and certainty, hasn't made his/ her presence or talent known to us yet.
[* - Where the slope (1st derivative) of the curve of revenue - expense is equal to zero.]
henry6 I am not saying any service should be started just because somebody comes to the door with the need or idea...again I am not just talking passenger train here...but the customer and the railroad have to work out an agreement. It would be assumed that some kind of market research has been done and planning, etc. of some kind, too...real business people with business plans and understandings and not pie in the sky railfans. If it is to move logs, cars, people, coal, whatever, it has to have a business plan and an understood markting concept. Why do the business experts here keep slamming the door on innovation and possible growth by dismissing an idea out of hand and suggesting that the railroad do the same.
Other people have had the same idea you have, starting about 37 years ago to be exact. I have had responsibility for reviewing the business cases and advancing on their merits (if there are any!) 8 such proposals during the past 2 years. Two are on my desk right now. My predecessors did the same, and many of their analyses are behind me on my bookshelves. Most of these ideas failed to get off the drawing board because none of them could effectively compete for the resources they required from the railway facility with other active customers of the railway facility. But when they do get enacted, no one in the railfan community ever celebrates our adoption of a new idea or an outside proposal, they just condemn us for not doing it faster and more often. With a "enthusiast" group like that, who needs enemies?
I appreciate your tireless promoting of ideas; people need to do that. But your conclusion that since we're not all jumping on it that we must be closed-minded, not that the business case is deficient, has no evidence and no logic I can find to support it. I'm too old and grey-haired to be insulted any more.
This is precisely why even though many of us inside the industry -- at some very high levels -- are died-in-the-wool rail enthusiasts, we don't want to be labeled as such or associate with such, because some rail enthusiasts are the most frustrating people we ever meet, worse than the dumbest-post politician. Too often they are the ones that are closed-minded ... to reality. It's hard to explain to other people at the railroad why we would want to associate with a group of people whose prescriptions if enacted would bankrupt the company, wreck our families, and put us all into the soup-kitchen lines. (And that's why most of us are here under an alias.)
The operating examples shown above go a long way in explaining why, after running a test train, BNSF declined to bid on the UPS request for super-speed service, the so-called Bullet Trains.
CSSHEGEWISCH The operating examples shown above go a long way in explaining why, after running a test train, BNSF declined to bid on the UPS request for super-speed service, the so-called Bullet Trains.
Thanks Paul, for a fine example of the sophistication of today's railway management.
Santa Fe had hired industrial engineers several years prior to the merger with BN and used their education and experience to analyze these proposals. I presume BN had some also at the time of the merger.
Santa Fe had a 'train simulator' computer program which was very sophisticated as early as 1975. For the TRANSCON it had the alignment, profile, special circumstances associated with a line gegment and even took into account prevailing winds and their effect on train resistance all loaded into a data base. It was used for power allocation, locomotive purchases, signal spacing and braking application studies, as well as other uses. These BNSF people keep improving upon their analysis techniques which is illustrated by the example Paul has given.
Wow - we've rolled quite a number of more-or-less related topics into this poor abused thread, haven't we ?
Well, now I want to take my 40-mile siding analysis (above), and "bring it on home" with a location-type question, as follows: (By the way, note that RWM was right again when he said - a l-ooo-nnn-g ways above - that a lot of this can be worked out with a pencil and an envelope - the computer just makes it more sophisticated, as diningcar noted just above with his recounting of the Santa Fe's analysis of such things.)
Take my hypothetical 40-mile, $100 million siding scenario above. How much will it cost ? Well, to borrow $1,000 now to pay back over 30 years at a 6 % interest rate will cost $6.00 per month, so the $100 million siding will cost . . . [calculates - there sure are a lot of zeroes in here !] . . . $600,000 per month, or about $20,000 per day ! Add something for maintenance (40 miles at $10,000 per mile per year for heavy traffic = $1,100 per day or so), taxes, insurance, whatever - call it close to $24,000 per day or $1,000 per hour.
Even on a busy line, I doubt if that passing siding will get used for this purpose as often as once an hour - the train density just isn't going to be / can't be that heavy, due to other factors - but let's assume that it will be 1 per hour anyway. So each train that uses this passing siding costs us $1,000.
Now, my intermodal train from yesterday is earning $9,000 revenue per hour. Is this siding worth it to save that train some running time ? [I know, there's some comparing of "revenue apples-to- expense oranges" in this, and non-linear effects, too, but bear with me here.) Well, if that intermodal train saves at least $1,000 worth of that $9,000 per hour, which is about 7 minutes or more, then the answer is yes. But can or will the intermodal train save that much time, and what about other things that might get in its way ? In other words, if the 60 MPH intermodal train instead had to slow down and "dog along" behind the 40 MPH coal train for an hour, what result ? Well, the IM would only go 40 miles, instead of the 60 miles it would have otherwise if ithe IM could have continued unimpeded. So the IM now has to recover 20 miles of distance, which will take at least 20 minutes at its nominal speed of 60 MPH - and 30 minutes at the slower 40 MPH if the IM continues following behind the coal train. So on the surface, the initial analysis is that the siding could well pay for itself, if a lot of intermodal or similar high-value trains are using it.
Now, here are the "location" questions: What are some other alternatives for getting the IM around the coal train ? Well, the obvious and traditional one of stopping the coal train in a conventional 10,000 ft. long siding is maybe not such a good idea - too much delay there, and slow moves brakng to get into it and stop, and then coming out of it and getting back up to track speed.
But instead of building a 40-mile long siding in the assumed flat territory, maybe the smart thing to do is put this passing siding on an grade. There, the coal train - with its comparatively low HP/ton ratio - will be dragging uphill at only 15 or 20 MPH, while the intermodal train - with its comparatively high HP/ton ratio - can better maintain its higher speed and run uphill much faster. Then the IM, with its larger speed differential and hence a higher overtaking rate, can get around the coal train much faster, and so the siding doesn't need to be near as long.
Or, why not put the siding on a moderate downgrade ? That way, the coal train can head in and either slow way down, or even stop. Now that ECP (Electronically Controlled Pneumatic) brakes are starting to be implemented in the coal train fleet, this maneuver won't be quite as problematic as it might have been up until now. With that much more of a speed differential, it follows that the intermnodal train could get around the coal train much faster, and the passing siding could be much shorter. And with the coal train being on a moderate downgrade, getting back up to speed might not be that difficult - release the brakes and let gravity do a lot of that work.
It would take a "driver" = locomotive engineer, Road Foreman of Engines ("RFE"), a trainmaster, or a similar person with a lot of actual operating experience to evaluate and judge these alternatives. So, any thoughts or comments on them from out there ?
Paul_D_North_JrWow - we've rolled quite a number of more-or-less related topics into this poor abused thread, haven't we ? Well, now I want to take my 40-mile siding analysis (above), and "bring it on home" with a location-type question, as follows: (By the way, note that RWM was right again when he said - a l-ooo-nnn-g ways above - that a lot of this can be worked out with a pencil and an envelope - the computer just makes it more sophisticated, as diningcar noted just above with his recounting of the Santa Fe's analysis of such things.) Take my hypothetical 40-mile, $100 million siding scenario above. How much will it cost ? Well, to borrow $1,000 now to pay back over 30 years at a 6 % interest rate will cost $6.00 per month, so the $100 million siding will cost . . . [calculates - there sure are a lot of zeroes in here !] . . . $600,000 per month, or about $20,000 per day ! Add something for maintenance (40 miles at $10,000 per mile per year for heavy traffic = $1,100 per day or so), taxes, insurance, whatever - call it close to $24,000 per day or $1,000 per hour. Even on a busy line, I doubt if that passing siding will get used for this purpose as often as once an hour - the train density just isn't going to be / can't be that heavy, due to other factors - but let's assume that it will be 1 per hour anyway. So each train that uses this passing siding costs us $1,000. Now, my intermodal train from yesterday is earning $9,000 revenue per hour. Is this siding worth it to save that train some running time ? [I know, there's some comparing of "revenue apples-to- expense oranges" in this, and non-linear effects, too, but bear with me here.) Well, if that intermodal train saves at least $1,000 worth of that $9,000 per hour, which is about 7 minutes or more, then the answer is yes. But can or will the intermodal train save that much time, and what about other things that might get in its way ? In other words, if the 60 MPH intermodal train instead had to slow down and "dog along" behind the 40 MPH coal train for an hour, what result ? Well, the IM would only go 40 miles, instead of the 60 miles it would have otherwise if ithe IM could have continued unimpeded. So the IM now has to recover 20 miles of distance, which will take at least 20 minutes at its nominal speed of 60 MPH - and 30 minutes at the slower 40 MPH if the IM continues following behind the coal train. So on the surface, the initial analysis is that the siding could well pay for itself, if a lot of intermodal or similar high-value trains are using it. Now, here are the "location" questions: What are some other alternatives for getting the IM around the coal train ? Well, the obvious and traditional one of stopping the coal train in a conventional 10,000 ft. long siding is maybe not such a good idea - too much delay there, and slow moves brakng to get into it and stop, and then coming out of it and getting back up to track speed. But instead of building a 40-mile long siding in the assumed flat territory, maybe the smart thing to do is put this passing siding on an grade. There, the coal train - with its comparatively low HP/ton ratio - will be dragging uphill at only 15 or 20 MPH, while the intermodal train - with its comparatively high HP/ton ratio - can better maintain its higher speed and run uphill much faster. Then the IM, with its larger speed differential and hence a higher overtaking rate, can get around the coal train much faster, and so the siding doesn't need to be near as long. Or, why not put the siding on a moderate downgrade ? That way, the coal train can head in and either slow way down, or even stop. Now that ECP (Electronically Controlled Pneumatic) brakes are starting to be implemented in the coal train fleet, this maneuver won't be quite as problematic as it might have been up until now. With that much more of a speed differential, it follows that the intermnodal train could get around the coal train much faster, and the passing siding could be much shorter. And with the coal train being on a moderate downgrade, getting back up to speed might not be that difficult - release the brakes and let gravity do a lot of that work. It would take a "driver" = locomotive engineer, Road Foreman of Engines ("RFE"), a trainmaster, or a similar person with a lot of actual operating experience to evaluate and judge these alternatives. So, any thoughts or comments on them from out there ? - Paul North.
Your siding on the downgrade has to be signaled for a non-ECP train because even ECP trains might fail and go into non-ECP mode, and there is no way the FRA is going to let you write a special instruction that says you can only use the siding for ECP trains, even should you want to do something that risky! Downhill sidings have some very bad effects on wayside signal spacing, which will rob capacity for plain-old trains that will never take it. In general? A heavy train will never be routed into a downhill siding because there's way too much risk it will come out the other end. As a dispatcher, I never routed a downhill heavy train into a siding without first talking to the hoghead, and making sure he was comfortable with it. Sometimes they were, sometimes they weren't.
We build hundreds of scenarios like this and test them with the RTC model. It's not a black-box model; it only tests what you put in. So if you put in garbage, you get dumb results. But those of us that are using it are mostly old chief dispatchers so we have extra-gray hair and lots of skepticism. These days no passenger train or line change or new siding or anything will be built without running it on the RTC model, and the people who look at the results and figure out what to do with them are people like me -- former chief dispatchers, superintendents, and the like; people whose job it is every day to make a division or a region run.
Paul, you have the wrong set of people. Train dispatchers and signal engineers are the people who know how a railroad operates as opposed to how a train operates. The braking curves are worked out by formula and experience. RFEs play in that game and are the experts who will tell you if a braking curve is too aggressive. (We also work closely with specialty rail track/train dynamic firms that analysze buff forces, etc.). The braking curves set the signal spacing. The signal spacing says what trains are going to do for speed and spacing. Trainmasters have no role in designing infrastructure or in service design or in network planning; their job is to get crews out the door, do efficiency tests, go to investigations, and solve local problems. I have never in my career seen a trainmaster stick his nose into a dispatching office much less know what goes on there. At the level of an assistant superintendent, then that person better start learning how a railroad operates not just a train. Most of the annointed up-and-comers are secunded to a dispatching office as an ACD for awhile so they can learn something of how a railroad operates.
If you want to do overtakes, you build outside sidings. You put the slow train into them and wait until the fleet runs by, then bring them out. You will oftentimes hog them out, of course. That's the breaks. There is usually not a lot of economic incentive to run the wheels off a heavy train anyway. If the coal or grain train has a 72-hour cycle or a 70-hour cycle, so what? These trainsets usually end up parked a month of the year anyway, so the "savings" in time never accrues to anything useful, like less car capital costs. The economic incentive to speeding up coal and grain trains with higher hp/ton ratios is mostly so that they will not delay trains that have a significant time component to them. The tradeoff, then, is between building sidings to stash 1.2 hp/ton grain and coal trains into to get them out of the way of the hotshots, and not building sidings and powering them up to 2.0 hp/ton to try and run them ahead of the hotshots. Generally the plan for most Class 1s in recent years has been more power, less sidings. This is precisely what we test with the RTC model -- comparing alternatives, conceptually costing the thing, and seeing which business case works better.
Thanks for that clarification and comments. I can see where I was a little off-base with the people - what you're describing for the RFE is more what I had in my mind.
I was wondering, too, about taking the $100 million for that hypothetical siding and instead buying say, 50 locos (at $2 million ea.) = whole lotta more HP to add onto those slow trains to do exactly as you say is the recent trend. Not quite the same as the siding dollar-for-dollar, but another alternative to look at. But I didn't want to write the equivalent of another section of a book this afternoon . . .
Even before I read your response above I was thinking the following: Now we know why the PRR and the NYC essentally said "The heck with this fooling around with half-measures - we'll just build 4-track mains" (with a very few too-tight 2-track exceptions, and in some places, even 6 tracks) - to handle all their traffic between NYC and Chicago (and Washington, D.C., too for the PRR). Which was basically a fast (through) and a slow (local) track in each direction. And then they installed interlockings - with like 6 crossovers to get all the way across those 4 tracks and back again, complete with block towers that were manned 24 x 7 x 365 - like every 6 to 10 miles to facilitate the kind of maneuvers that we're discussing here. Can you imagine what that cost to do then ?
Better yet, can you imagine what it would cost to replicate all that today ? Now we can better appreciate the value of all that track, structure, and signal infrastructure and route-miles and track-miles that's already out there now. It staggers the imagination (at least mine tonight, anyway).
Paul, as you mention the four track mains (which extended to Buffalo and Pittsburgh), don't forget Zoo interlocking. There, the PRR, at no little expense,arranged all the connecting tracks so that no train crossed, at grade, a track for traffic in the opposite direction.
Several years ago, Trains had several installments of re-captioned stills from movies. One showed an Indian scout, in his army uniform, explaining to a puzzled engine crew, who wondered why they were not where they wanted to be: "They must have lined you up wrong at Zoo." There's a nice little article about Zoo in the March, 1999, issue; it shows all the tracks.
Paul_D_North_JrRWM - Thanks for that clarification and comments. I can see where I was a little off-base with the people - what you're describing for the RFE is more what I had in my mind. I was wondering, too, about taking the $100 million for that hypothetical siding and instead buying say, 50 locos (at $2 million ea.) = whole lotta more HP to add onto those slow trains to do exactly as you say is the recent trend. Not quite the same as the siding dollar-for-dollar, but another alternative to look at. But I didn't want to write the equivalent of another section of a book this afternoon . . . Even before I read your response above I was thinking the following: Now we know why the PRR and the NYC essentally said "The heck with this fooling around with half-measures - we'll just build 4-track mains" (with a very few too-tight 2-track exceptions, and in some places, even 6 tracks) - to handle all their traffic between NYC and Chicago (and Washington, D.C., too for the PRR). Which was basically a fast (through) and a slow (local) track in each direction. And then they installed interlockings - with like 6 crossovers to get all the way across those 4 tracks and back again, complete with block towers that were manned 24 x 7 x 365 - like every 6 to 10 miles to facilitate the kind of maneuvers that we're discussing here. Can you imagine what that cost to do then ? Better yet, can you imagine what it would cost to replicate all that today ? Now we can better appreciate the value of all that track, structure, and signal infrastructure and route-miles and track-miles that's already out there now. It staggers the imagination (at least mine tonight, anyway). - Paul North.
Locomotives are fungible, sidings are sunk costs. There's a very tough ROI threshold to build a siding. Figure $250 foot plus not less than $1 million for the two control points, plus design, permitting, right-of-way, utility relocation, etc. -- oh, about $5 million for a 10,000-foot siding in good country. With no bridges. In tough country, maybe $8-10 million. In an urban area with right-of-way acquisition? Ka-ching. It's a lot less risky to purchase locomotives because its very difficult to project future traffic growth with a high degree of precision. There have been some very embarrassing projects built during my career that were deemed absolutely essential at the time but shortly afterward the traffic pattern changed and there's a lot of track and earthwork suddenly doing nothing.
Railway Man It's a lot less risky to purchase locomotives because its very difficult to project future traffic growth with a high degree of precision. There have been some very embarrassing projects built during my career that were deemed absolutely essential at the time but shortly afterward the traffic pattern changed and there's a lot of track and earthwork suddenly doing nothing. RWM
It's a lot less risky to purchase locomotives because its very difficult to project future traffic growth with a high degree of precision. There have been some very embarrassing projects built during my career that were deemed absolutely essential at the time but shortly afterward the traffic pattern changed and there's a lot of track and earthwork suddenly doing nothing.
Murphy SidingRailway Man It's a lot less risky to purchase locomotives because its very difficult to project future traffic growth with a high degree of precision. There have been some very embarrassing projects built during my career that were deemed absolutely essential at the time but shortly afterward the traffic pattern changed and there's a lot of track and earthwork suddenly doing nothing. RWM Care to give some for examples?
Check with me in another 20 years.
Back in (I think) the 1980s, before tonnage from the Powder River Basin really began to skyrocket, Union Pacific served some coal mines in the Medicine Bow, Wyoming (think Hanna, Dana, Black Butte) region, and the lads and lassies in Omaha were convinced that this (and not the Poweder River) origin would supply an enormous river of eastbound coal. So in came the bulldozers, and grading for a third main was well along when it suddenly became apparent that less coal traffic than expected would materialize, but that traffic ex-Powder River Basin was booming.
To indulge in a bit of amateur psychoanalysis of UP's front office, I speculate that this mis-forecasting of business, coupled with the sails-trimming approach to operations by then-COO Mike Walsh rendered UP gun-shy over adding capacity, so much so that by the time it absorbed the Chicago and NorthWestern, the company (UP) had fallen into the unenviable position of having fallen behind in capacity in its all-important Red X, plus having to double track large stretches of the former CNW give it a two-track main line to Chicago. While its principal rival (BNSF) sought to keep just ahead of the curve, UP suddenly found itself struggling to catch up , with its competitive position commensurately hampered.
If this (admitted) Monday morning analysis is all wet, I'm sure someone knowledgeable will swiftly correct it. But it gives people something to chew over....
Deggesty Paul, as you mention the four track mains (which extended to Buffalo and Pittsburgh), don't forget Zoo interlocking. There, the PRR, at no little expense,arranged all the connecting tracks so that no train crossed, at grade, a track for traffic in the opposite direction. Several years ago, Trains had several installments of re-captioned stills from movies. One showed an Indian scout, in his army uniform, explaining to a puzzled engine crew, who wondered why they were not where they wanted to be: "They must have lined you up wrong at Zoo." There's a nice little article about Zoo in the March, 1999, issue; it shows all the tracks. Johnny
Johnny -
Thanks, I know ZOO well. At the moment the diagram from that 1999 issue is the "background" for my computer screen (forget where I got that from, though):
Zoo Tower in twilight Trains, March 1999 page 60 Operations at Zoo Tower in Philadelphia ( AMTK, NJT, OPERATION, "PALMER, DAVID", PHILADELPHIA, PRR, SEPTA, TOWER, TRN )
There was another article on ZOO from back in like 1952 I think, which I have:
Zoo Junction Trains, March 1952 page 24 Notable feats of railroad engineering ( "GLOFF, GEORGE A.", JUNCTION, PHILADELPHIA, PRR, TRN )
Supposedly as ZOO was originally laid out, it was too tough to automate like many other NE Corridor interlockings. But now that it's been simplified somewhat by abandonment and out-of-service tracks, and computers have gotten more powerful and the state of the art has advanced, that may be within reach. It would take someone more familiar with that than me, though - like RWM - to tell us more about the feasibility of such a change.
Plus, back in the 1990's I would go hang out there at ZOO on Sunday afternoons in March for a couple of hours while my wife and daughter were at the Philadelphia Flower Show at the old Convention Center, west of 30th Street Station. Now that the Flower Show has moved to the Pennsylvania Convention Center (= former Reading Railroad Terminal 's trainshed, extensively rehabbed), there are other attractions that are easier to get to from there. But we're supposed to go again this year (1st weekend in March), so we'll see . . .
I also have a black-line print of ZOO's track diagram that I purchased at a railroadiana show a few years ago. Now that I have a new house and lots of bare basement walls that are all mine to hang it and my GG1 prints on . . . soon.
Railway Man Locomotives are fungible, sidings are sunk costs. . . . [snip] . . . It's a lot less risky to purchase locomotives because its very difficult to project future traffic growth with a high degree of precision. [snip] RWM
This is getting kind of like a tennis match - we're taking turns at this subject. I was thinking much the same thing while driving home last night (nothing as interesting on the radio . . . ).
The locos are obviously mobile and can be moved around as needed - this division for the grain rush, that division for the coal season, the other end of the system for the fall intermodal traffic crunch, etc. - but the siding is fixed in place and can't ever be moved to where its needed most. Plus, the locos can be added to various trains in various numbers to suit the needs - the siding is only a 1-purpose tool. Finally, the locos can be financed with the very advantageous rates associated with railroad rolling stock (because they are movable and hence easily repossessed if needed and sold to another RR - but that's another topic entirely), whereas the siding would have to be financed out of general corporate funds or bonds (mortgages), like any other real estate, which is usually a little more expensive "dollar-for-dollar" for that reason.
And for those who don't know: While locomotives may be fungible (= alike and indistinguishable among themselves - such as bushels of grain is the common example), in this context I'd instead use the concepts of the locos being much more flexible than, or being substituted for, the siding.
Railway Man In practical terms, the amount of "wrong-hand main" that will be used up for a runaround in reasonably flat CTC territory where both trains keep moving at their best possible speed is ~ 40 miles. This is presupposing there are no opposing moves wanting to use that other main track during this event. It still takes a very good dispatcher to get away with it, and a smart ACD or Chief will only let a good dispatcher attempt it. [snip] This enables accuracy for a specific terrain with specific grades, speed restrictions, wayside signal locations, wayside signal aspects, etc. Then I look at it and see if it makes any sense. Sometimes the model does some dumb things, or the modeler has toggles turned on that make the model a little more aggressive than would happen in real life. RWM
This enables accuracy for a specific terrain with specific grades, speed restrictions, wayside signal locations, wayside signal aspects, etc. Then I look at it and see if it makes any sense. Sometimes the model does some dumb things, or the modeler has toggles turned on that make the model a little more aggressive than would happen in real life.
Regarding the passing maneuver, the comments above brought back to mind a little story that I believe appeared in one of the 3 articles on the D&H Consolidations that are referenced below, which is as follows as best as I can remember it:
During one of the road tests of the D&H's one-of-a-kind, L. F. Loree-inspired, demonstration super-high pressure compound 2-8-0's, the DS held the test train at an interlocking so that a regular coal train with the usual tonnage of cars and associated complement of locos could proceed ahead of it. That so annoyed the test loco's engineer - a real veteran, they used the same guy for all of the test runs so as to remove as much of that variable* from the data as possible - that he asked if they could cancel the routine of the planned test, and instead see how fast they could get to the next interlocking. Since the test engineers had data from like 50 test runs at that point, they were willing to deviate from the planned test and gave their consent. The test crew had a saying that "Steam can be used either expansively or extensively" - before this, they had been using it expansively, but on this trip they were using it extensively ! The two tracks were separated mains on either side of the valley, and the test train crew could see that they were rapidly overtaking and passing the regular coal train over on the other side. The test train did in fact beat the regular coal to the next interlocking, and so then had to wait for the coal train again for like 5 minutes before it appeared, and then moved through and cleared the interlocking. The closing line: "After that, the dispatcher had a lot more respect for us, and didn't hold us for anything."
(* - Its been said that what the engineer ate for breakfast will influence the results of the test runs - I can believe that.)
[Back to my (paper)work now.]
PDN; RWM: Thanks for the posts. My example was for starting the discussion and notice I said that no consideration was given for front to back spacing. I suspect that it would take twice as long to get spacing so the slower train did not get a restrictive signal when passed by the faster train.
To add MSR (110 mph) to any of the western transcons would definitely require another track the whole distance of the run. Plus an additional passing siding for opposing MSRs to pass. Passenger traffic would never be high enough except maybe in some Texas locations
MY point is that a certain level of passenger traffic has to be present to justify MSR or HSR. The NE corridor now has that level of traffic and with ROW improvements traffic will increase.----But it still comes down to the fact that there is not enough trackage south of Philidelphia to handle the additional different speed traffic or the traffic increase resulting from MSR/HSR south of Washington. Basically it would have: an occasional freight, SEPTA and MARC commuter traffic, AMTRAK regional service , and ACELA SERVICE. This is four different top speed trains. The two or three tracks south of Philidelphia just isn't enough.
South of Washington the question that needs to be answered is: "If we have MSR or HSR will we have enough passengers to justify the service???." For the Washington - Raleigh segment dicussed here the traffic potential has not been there until about 3 - 5 years ago. The Carolinian now has business class indicating that class is coming up and many times is sold out. I-85,I-95 congestion and the desire of many business men and others to not fly "Barbie Jets" to Ric, DCA, or Phl unless absolutely necessary prevails. 3-1/2 hrs Raleigh - Wash would certainly attract more daytime passengers. The 175 mile Raleigh - CLT presently 3:10 reducible to 1:50 may be more problematic. But again this route is going to need the extra trackage to be operationallly feasibile.
blue streak 1 PDN; RWM: Thanks for the posts. My example was for starting the discussion and notice I said that no consideration was given for front to back spacing. I suspect that it would take twice as long to get spacing so the slower train did not get a restrictive signal when passed by the faster train. [snip]
blue streak 1: Yes, I saw that, and figured as much. You clearly had enough to do with the details of the example you were setting down. You gave me a good set-up with the analogy of the two 2-mile long tractor-trailers passing each other at 60 MPH and 55 MPH. I just wanted to take that aspect of it and work with it a little farther and see where it took us.
You can see where we're at now - pretty much any way it's cut, entire additional tracks will be needed. Without that, it seems that train slots are kind of like landing slots at the airport - you can't make many more of them without building a whole new airport, and you can't make them too much closer in time because of safety, but you can make the planes bigger, more fuel-efficient, and do other things to tweak those other aspects of the operation, etc.
Thanks for participating, and making this one as much fun as it's been !
blue streak 1What does this lead to? I would love to be able to operate my RR section with all trains at one speed. Boy can I handle a lot of trains but that is not realistic so my capacity is limited for all the above factors + maintenance windows and more restrictions not considered. If you add trains that are going twice as fast as present freight traffic you need two or three tracks to handle all the present traffic and keep them separated. Think what it is like when you are on a two lane interstate in your porsche traveling 125 and you come up and have to wait for a 2 mile long tractor trailer going 60MPH passing another 2 mile long tractor trailer going 55MP. OOPS - that slows you down for a minimum of 25 minutes not counting distance to get front to back separation. Now throw in a new Medium Speed Passenger Rail (MSR 80 - 125 MPH my definition)(HSR above 125 MPH). Now for assumptions. Any route that will get MSR will probably be designed for daytime hourly or every other hour service. Since most of the route will probably use present ROWs except where curve straightening is required then the route is going to need a new track built to Class 7,6,or 5 standards. Where possible this track shoud be 25 ft away from the existing track to prevent slow downs due to maintenance on either track. Although I would expect the track structure to be built to 300,000# + load limits there would probably not be too much freight traffic on the new passenger tracks. (ton mile charges for freight use of the MSR rail line might be an incentative). Blue streak 1
Elevating speeds beyond 79 mph encounters severe problems with train control if it's to be done on an existing track also used for freight. Beyond the requirement for an ATC system (and now a PTC system instead), it typically requires a complete resignalization, which in turn often means the crossovers are no longer in practical, efficient, or signalizable locations, and have to be moved. This gets extremely expensive because by this point you have paid for 50% to 100% new rail, ties, turnouts, train-control, wayside signaling, grade-crossing signaling, communications systems, and while you're at it, you might as well replace all the drainage structures too.
On a line handling any appreciable amount of freight intermixed with passenger, on which speeds greater than 79 mph are desired, it is usually less costly to simply build an entirely new and separate passenger rail infrastructure to one side, and never, ever, ever, let the two mix. You cannot run the passenger trains faster than 79 mph on the freight tracks, and you cannot run the freight trains on the passenger tracks unless you equip those tracks with heavier rail, the expensive turnout frogs, and are willing to shoulder the costs of more frequent surfacing, rail profiling, and frog welding. Also, you'd like to have a different rail profile on the passenger track than the freight track, different superelevation and unbalance, different grade-crossing approach circuit lengths, different ties and resilient fasteners, different signal spacing and aspects, and so forth. You cannot optimize infrastruture to be ideal for both fast light passenger and slow heavy freight, at the same time.
And -- lest I forget -- let's not forget the fatal problem of platform height, platform gap, and ADA compliance. You can have a platform that clears freight, or you can have a platform that meets ADA, but you cannot have both on the same track. So at every station, expect to build station tracks so the freight trains do not whack the platforms. And since people usually want stations to be in densely built-up urban areas, and if anywhere a right-of-way is short on unused empty space, it's in a densely built-up urban area, expect a horribly expensive right-of-way acquisition including things like utility relocations, grade separations, quiet zones, sound walls, reconstruction of a lot of city streets and intersections, etc. This is assuming someone will even sell you the land without a 20-year political and court battle.
Paul_D_North_JrRegarding the passing maneuver, the comments above brought back to mind a little story that I believe appeared in one of the 3 articles on the D&H Consolidations that are referenced below, which is as follows as best as I can remember it:
That was from the article in the June 1967 issue, my recollection was that he was held up three times by the same train. Quite an interesting and informative article, got me interested in learning more about thermodynamics (I was 12 when I first read the article). Didn't really understand why heating area in the firebox was more effective than the firetubes/flues until reading the Babcock & Wilcox book on Steam. It wasn't until a couple of years ago that I saw what the boiler on 1400 really looked like (on Doug Self's website, Loco Locos).
What is truly scary to realize that the article was published 37 years or less after the test run you mentioned, and it has been almost 42 years since that issue of Trains came out.
erikem [snip] What is truly scary to realize that the article was published 37 years or less after the test run you mentioned, and it has been almost 42 years since that issue of Trains came out.
"Please do not say such things !" [from "The Wind and the Lion" movie, 1977 or so] Anyway, if you read that article when it was new, that would make us about the same age . . .
Wasn't the test run in the 1920s, so it was about 47 years later ?
The configuration of that line and the quest for more efficient operations also go to the point of this thread, how they interact and affect profitablility, etc.
Your story illustrates why this is such a fascinating and informative hobby !
Paul,
I did read the article when new - the June 1967 issue was my first issue of Trains (though did pick up many back issues in subsequent years, the April and May 1967 issues were amongst the first).
The test of the 1402 would not have occurred before 1930 as it wasn't finished before then (the 1400 came out in 1924, the 1401 in 1927, 1402 in 1930 and the 1403 in 1933, with the 1403 being the only locomotive built in 1933). You're right in that the D&H had spent quite a bit of money upgrading their line to allow for larger train sizes, seem to recall that the grade was 0.8% compensated by the time the 1402 came around (the 1968 ABC's of Model Railroading article on grades was instructive as to what compensation meant as far as grades).
I also remember picking a bit of civil engineering fundementals from reading AC Kalmbach's Track & Layout, learning what a cut and fill were. Don't think my knowledge of RR civil engineering is anywhere near our dirty feathered friend, but probably knew more about how RR's were built as a pre-teen than maybe 90% of adults.
- Erik
This has been a great thread and I really appreciate the discussion.
Thanks.
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