The Milwaukee Road

[bobwilcox]

Trains once ran an article saying Casey Jones caused his fatal accident at Vaugn, MS. Beebe responded that mere facts were immaterial.

Dave you are the Milwaukee's Beebe.

[bobwilcox]

QUOTE: Originally posted by futuremodal
...obsequiousness when members of the rail industry status quo press opine...

Is this what J. Hendrix meant by Purple Haze? I am not a very good writer but this take my breath away.

[Anonymous]

QUOTE: Originally posted by Mark_W._Hemphill

VerMontanan speaks the facts.

James E. Vance, late geography professor of Cal Berkeley who in my opinion understood railroad geography better than anyone before or since, cogently summarizes the deficiency of the Milwaukee Road's Pacific Extension on both an operating-cost and traffic-potential basis in "North American Railroad Geography."

Hardly a case of factual discourse when Mark Meyer selectively pursues a single line of thought regarding railroad engineering. This obsession some have with grades being the primary determinent of which lines stay and which ones go is completely off the mark. If indeed grades were the prime factor, both the UP and NP lines to the PNW would have been torn out years ago, well before such a fate would have befallen the Milwaukee's PCE. Michael Sol is correct when he points out that grades are only one factor in determining a route's subjective endorsement as a "superior" route.

What is left out of the "facts" is that the Milwaukee was by far the shortest route between the PNW and Twin Cities. Distance is as much a determinant of suitability as gradient.

It has been offered before that one could claim a dual "champion" as far as PNW to Twin Cities. The GN/SP&S combo was the best in terms of grades, the Milwaukee best in terms of distance. The other players to the PNW, namely UP and NP, were and are by far the worst of the four PNW transcons, both in terms of distance and grades.

As far as James Vance's analysis, he indeed may be correct regarding the operational costs of Milwaukee vs GN/SP&S, but he's way off in terms of traffic potential. The Milwaukee runs through the same forestlands and ag lands as the BN lines, had the necessary proximity to the PRB when low sulfur coal came into vogue, and was easily the prefered line for intermodal between the PNW and Chicago. Anyone who has taken the time to study the Milwaukee's demise knows perfectly well it had nothing to do with the suitability of the PCE alignment but rather managerial miscalculations that allowed the PCE to degrade. It is intersting that these other facts have been presented on this thread, yet some seem to make it a point to ignore these other facts, seemingly prefering to display obsequiousness when members of the rail industry status quo press opine rather than displaying independent thought.

[Anonymous]

VerMontanan speaks the facts.

James E. Vance, late geography professor of Cal Berkeley who in my opinion understood railroad geography better than anyone before or since, cogently summarizes the deficiency of the Milwaukee Road's Pacific Extension on both an operating-cost and traffic-potential basis in "North American Railroad Geography."

[VerMontanan]

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by Cris Helt

Talk about opportunities lost due to management inaction. [xx(] Wasn't the Milwaukee's shorter route to the Pacific Northwest negated by the steeper grades the road dealt with in it's route to the coast?

This has become an odd point of contention in recent years, for people entirely unfamiliar with the respective lines.

Every professional engineering study ever done on the topic concluded that, as a combination of all of the elements that go into an engineering design, including grade and curvature, Milwaukee had the best route of all transcontinental railroads. This was conceded, for instance, by the Great Northern engineering department during testimony offered to the Interstate Commerce Commission during the Northern Lines Merger case. Actually, it was one of their reasons argued in favor of the merger: Milwaukee had this better route.

If "grade" were the only element, it would still be debatable. Traffic flow for instance. Because historically 2/3 of revenue traffic was eastbound and 1/3 westbound on transcontinentals, this had some significance. For the Milwaukee, this meant that 33% of its revenue traffic had to climb one 2.2% grade on its transcontinental route. For the GN a full 100% of its traffic had to negotiate a 2.2 % grade, then negotiate a tunnel that is the functional equivalent of a 2.2% grade, then brake down a long 2.2% grade, no matter which way the traffic was going. Lots of "2.2%" problems on that route. Significant, well yeah, if you are fastened onto "grade" as a simplistic answer to a complex engineering question.

Which was the "better" route? The professional engineers unanimously have one answer, and the railfan industry seems to have another.

Why are those answers different?

Well, perhaps that gets into a study of religions ....

Best regards, Michael Sol

This is post with many absolutes. Probably the most profound is that it suggests that there can be no alternate view, especially by using terms like “unanimously” and stating that 100% of Great Northern tonnage had to negotiate a 2.2% grade.

So, it’s interesting that in the late 1960s before the BN merger, a group of engineers and other railroading professionals from the ICC visiting the Great Northern’s locomotive power bureau in St. Paul, Minnesota expressed to individuals there that not only did the GN (at that time) handle more traffic in the Northern Tier than the NP and MILW combined, but regardless of how the results of the merger proceedings turned out, their (GN) route would retain its status of the main freight route due to its superior engineering, physical plant, and ease of grade. It’s additionally interesting that if the MILW was indeed the best engineered, least-expensive route to move freight on this route, it did not survive. After all, business then, as is the case now, is all about money. So one has to wonder why either GN or NP did not seek merger with MILW, or when MILW petitioned to be included in the BN merger, BN resisted and did not jump at the chance to move all their transcontinental freight on this superior route. I had the occasion to ask some “professional engineers” from BN this question in the early 1980s after the demise of the MILW main line west of Miles City. While the condition of the infrastructure was certainly a consideration in BN not acquiring more of the main line than it did, other than Snoqualmie Pass (which BN did initially obtain), the response in a nutshell was that numerous inferiorities of the MILW route gave BN no reason to want it. So, evidently, things were far from “unanimous.”

With regard to other professionals who definitely are not “railfans” as Michael Sol evidently would label as in the contrary opinion, I recall several ex-MILW dispatchers, who in 1984 when the Glendive, Montana BN dispatching office was consolidated with the Havre and Missoula offices in Billings, Montana (several ex-MILW employees moved to Glendive when BN had a need for people during the beginning of the coal boom at the end of the 1970s) first had a chance to work the ex-GN main line west of Havre, Montana. I recall their favorable comments on most trains achieving the top of the Continental Divide (westbound) without helpers and the capacity of the route (long sections of double track) on either side of Marias Pass was a notable contrast to that of the single track, non-CTC route of the MILW tackling areas of the Little Belt Mountains, Continental Divide, and Bitterroot Mountains as they previously experienced at the MILW Deer Lodge dispatching office. Not coincidentally, once the Marias Pass territory was moved to be dispatched from Seattle, Washington, similar reactions were expressed by former UP dispatchers (who came to BN rather than moving to Omaha with UP) comparing the arduous journey that UP trains faced over the Blue Mountains in Oregon.

Also, the statement that 100% percent of the GN’s traffic had to negotiate a 2.2% grade is a statement stunning in its inaccuracy. The only 2.2% grade on the GN main line is the crossing of the Cascades to and from Cascade Tunnel. This suggests, evidently that ALL GN traffic originated somewhere east of Wenatchee and was destined somewhere west of Skykomish. This ignores the reality of that GN and NP (unlike MILW, until after the BN merger) also served the Pacific Northwest’s second-largest city, Portland, Oregon. Not only did all traffic for Portland move via subsidiary SP&S’s water level route along the Columbia River, GN had the option to, and indeed did, move traffic destined north of Vancouver, Washington via the SP&S and then via their own route (they had access to all points north of there due to trackage rights on NP). For instance, cars destined from Spokane and east on GN were usually routed via SP&S to Vancouver, then north on GN to Longview. The MILW on the other hand, had no alterative to its 2.2% climb up the Saddle Mountains west from Beverly, Washington, nor the very steep 3% pull leaving Tacoma, Washington on their line enroute to Longview. GN also handled traffic destined to California via its “Inside Gateway” route through Central Oregon. That this traffic would negotiate a 2.2% climb somewhere (again, Stevens Pass/Cascade Tunnel would have to be the location) is ridiculous. (Until the BN merger, MILW didn’t even interchange with Southern Pacific, the major north-south carrier along the west coast.) Lest some think this to be an apples and oranges comparison, remember, the term “100% of its traffic” was used.

Michael Sol’s dwelling on the 2.2% grades of the Great Northern, applicable only to Stevens Pass also suggests that this was the only location worth discussing along that route. Actually, this is partially true, as westbound GN had no other helper districts, and eastbound only one, Marias Pass. However, such is not true for the MILW, which had at least four helper grades in each direction to traverse. And, since it did not had its own route to California, didn’t go to Portland (until after the BN merger), and enjoyed no routing alternatives in the Pacific Northwest. In the case of the MILW, the “100% of the traffic” would be a bit closer to the truth when describing the heavy grades their traffic had to traverse. All things considered, harping on GN’s lone 2.2% crossing of the Cascades is very misleading when comparing transcontinental routes overall (especially when not all traffic went that way and GN did have an alternate route). Indeed, the Milwaukee Road had a better crossing of the Cascades, but such emphasis tends to avoid that the operating inefficiencies of the Milwaukee Road were not here, but in the numerous stiff grades between the Cascades and the east slopes of the Rockies in Montana.

For those that might be unfamiliar with the grades of the GN and MILW main lines, here is a list of the grades in excess of 1% on the respective lines:

Westward, Great Northern, west of Havre, Montana:
1.2% at False Summit/Bison, Montana, east of the Continental Divide
1.6% increasing to 2.2% between Wenatchee, Washington and Cascade Tunnel.

Westward, Milwaukee Road, west of Harlowton, Montana:
1.4% at Loweth, Montana
2.0% to the top of the Continental Divide at Pipestone Pass, Montana
1.7% to the top of the Bitterroot Mountains, St. Paul Pass, Montana/Idaho
2.2% to the top of the Saddle Mountains from Beverly, Washington

Eastward, Great Northern, west of Havre, Montana:
2.2% between Skykomish, Washington and Berne, Washington (Cascade Tunnel).
1.8% between Java (Essex), Montana and the top of the Continental Divide.

Eastward, Milwaukee Road, west of Harlowton, Montana:
1.7% to the top of Snoqualmie Pass, Washington east of Cedar Falls
1.6% to the top of the Saddle Mountains, Washington east of Kittitas
1.7% to the top of the Bitterroot Mountains, St. Paul Pass, Montana/Idaho
1.7% to the top of the Continental Divide at Pipestone Pass, Montana

While superiority of the GN route is obvious, this applied basically to transcontinental traffic destined to and from the Seattle area. When comparing grades for traffic to and from Longview, Washington, and later Portland, Oregon after MILW received trackage rights, the difference is even more striking:

Westward, Great Northern, west of Havre, Montana:
1.2% at False Summit/Bison, Montana, east of the Continental Divide

Westward, Milwaukee Road, west of Harlowton, Montana:
1.4% at Loweth, Montana
2.0% to the top of the Continental Divide at Pipestone Pass, Montana
1.7% to the top of the Bitterroot Mountains, St. Paul Pass, Montana/Idaho
2.2% to the top of the Saddle Mountains from Beverly, Washington
3.0% to the top of Tacoma Hill south of Tacoma, Washington

Eastward, Great Northern, west of Havre, Montana:
1.8% between Java (Essex), Montana and the top of the Continental Divide.

Eastward, Milwaukee Road, west of Harlowton, Montana:
1.7% to the top of Snoqualmie Pass, Washington east of Cedar Falls
1.6% to the top of the Saddle Mountains, Washington east of Kittitas
1.7% to the top of the Bitterroot Mountains, St. Paul Pass, Montana/Idaho
1.7% to the top of the Continental Divide at Pipestone Pass, Montana

In the cases of Longview/Portland traffic, it’s interesting to note that traffic moving via GN would traverse but one “hill” in excess of 1%, and this for only about 3 miles, while similar traffic via a MILW routing route have to battle either four or five, depending on the direction.

While Michael Sol seeks to dismiss grade as relevant because he claims it is “simplistic answer to a complex engineering question,” this can’t hold water in this case. It might if lines were even relatively close in the grades experience, but they’re not. (For example, the maximum grade in each direction on GN between Whitefish and Spokane was .7%; on MILW between Missoula and Spokane 1.7%, a dramatic difference, operationally, and the difference between what is and what is not a helper district.) The MILW grades are much steeper and more frequent. It’s also interesting that in examining tonnage ratings charts used by the MILW and by consulting ex-MILW dispatchers who worked their railroad, that the tonnage ratings for the same model of locomotive (an SD40, for example) were surprisingly similar on both the BN and MILW. For instance, an SD40 is rated about the same for west out of Beverly on the MILW as west of Wenatchee on ex-GN/BN, and about the same east out of Avery, ID on MILW as east out of Essex, Montana on ex-GN/BN.

As for that 1/3 of the traffic “historically” WAS westbound and 2/3 WAS eastbound seems irrelevant considering that regardless of the way it was going, the GN route was far superior. And it’s really interesting that Michael Sol makes says, “For the Milwaukee, this meant that 33% of its revenue traffic had to climb one 2.2% grade on its transcontinental route”, which tends to skim over all the other grades it had to encounter.
Of course, today, most of the tonnage is westbound, which would make, and indeed does make the ex-GN route all the more attractive for moving it.

The bottom line for the Milwaukee was that it was inherently more expensive to move any car over its route than a similar move on the Great Northern. Over the course of its existence, the Milwaukee stationed helpers at Butte (for Pipestone Pass), Avery (for St. Paul Pass, though according to some ex-MILW dispatchers they were sometimes kept at Haugan, Montana after the terminal was moved from Avery to St. Maries), Beverly (for the Saddle Mountains), and Cedar Falls (for Snoqualmie Pass eastbound). Helpers were, as far as I know, never used westbound at Loweth after the 1956 line change which reduced the grade to 1.4%. This was considered a “doubling” hill when the train was not sufficiently powered. This is not to say that helpers were always used at these locations, but even when they weren’t the end result was that it took significantly more power to move the same tonnage. Indeed, some of my friends who were former MILW dispatchers tell of times when the official policy was to officially have no units dedicated to helper service at any of these locations. When this policy was in effect, trains would simply cut power at the bottom of one hill for an opposing train to pick up going the other way, and that same train would again pick up more power for the next hill. Locotrol was also used on occasion. In the end, the bottom line was that supplemental power was required to traverse each of the grades.

This would be the scenario after the 1970 BN merger if, for the sake of argument, both railroads had three SD40 locomotives and no helper power anywhere along the line to move a 7,000-ton mixed freight train from Havre and Harlowton (respectively) to Portland, Oregon:

On BN (ex-GN) west of Havre:
Train would depart Havre and continue unassisted to destination.
(The railroad would have the option of removing one of the units west of Flathead Tunnel west of Whitefish because the train could proceed with only two units from that point to destination.)

On MILW west of Harlowton:
Depart Harlowton.
Double the hill at Loweth (power rated for 5,400 tons)
Double to the top of Pipestone Pass (power rated for 3,800 tons)
Double to the top of St. Paul Pass (power rated for 4,400 tons)
Double to Boylston (power rated for 3,600 tons)
Triple Tacoma Hill (power rated for 2,400 tons)

Similarly eastbound, Seattle to Havre/Harlowton:

On BN (ex-GN):
Depart Seattle
Double Skykomi***o Berne (Stevens Pass) (power rated for 3,600 tons)
Double Essex to Summit (Marias Pass) (power rated for 4,500 tons)

On MILW:
Depart Seattle
Double to the top of Snoqualmie Pass (power rated for 4,500 tons)
Double Kittitas to Boylston (Saddle Mountains) (power rated for 4,700 tons)
Double to the top of St. Paul Pass (power rated for 4,500 tons)
Double to the top of Pipestone Pass. (power rated for 4,700 tons)

Of course, railroads do not routinely create a situation where each train would have to double the hill, but this indicates that the MILW routing would be dramatically more time consuming if done this way. In reality, more power is assigned, either road power or helper power, and more such power (and crews) is necessary, and a greater associated cost. It’s therefore no wonder that by around 1972 or 1973, BN had eliminated the intermediate crew change points at Cut Bank and Troy for trains on its route and trains needed then only two road crews between Havre and Spokane (changing at Whitefish). Westward trains required no helper crews and eastbound trains one helper crew. In the same area, due to its torturous profile, the MILW continued up until its demise to use four road crews for its trains between Harlowton, Montana and Avery, Idaho (later St. Maries), changing at Three Forks, Deer Lodge, and Alberton. Additional crews (whether helper or otherwise) were used for helpers or to reposition extra power for each hill.
Today, with the much larger trains (16,000 tons is not unusual) being operated, it’s even more difficult to imagine how these trains would fare operating if the Milwaukee line was still around. Perhaps a comparison would be the way Montana Rail Link moves BNSF coal and grain trains approaching 17,000 tons across Western Montana. A helper is required for these trains at Livingston and two helpers (not helper units, helper consists) at Helena. Something similar would certainly be applicable for trains if the MILW route still existed at Loweth and Pipestone Pass. But unlike such trains on the MRL/BNSF which, after cresting the Continental Divide at Mullan Pass never see a grade in excess of 1% thereafter (due to routing along the Columbia River), a MILW train would still need to tackle steep climbs at St. Paul Pass and the Saddle Mountains, and if it was destined for Kalama, Vancouver, or Portland as most grain which originates in Montana these days, the ridiculous 3% grade at Tacoma. Meanwhile, on Montana’s Hi-Line, such trains are operated with a much more minimal amount of distributed power configured at Havre or Great Falls, Montana and the train then continues to destination without needing additional road power or a helper enroute (though some can be cut, depending on destination).

In the end, while losing the Milwaukee route is certainly unfortunate, it’s not difficult to see why others prevail. While some may claim the Milwaukee to have the better route, one still has to ask: If this was the case, why was the Milwaukee route the only transcontinental route to have a large portion of it abandoned? If this was the case, why didn’t BN or UP ru***o prop up the Milwaukee or buy it outright? Why did the Milwaukee go bust with this far-superior line? After all, this is America, and it’s all about money, and if the Milwaukee route was cheaper to operate, it’s difficult to believe that all those “professional” and “unanimous” engineers couldn’t get the word out, even if they are in contrast to people that dispatched the territory.

In reality, as has nearly always been the case, the former Great Northern route continues as primary conduit to move rail traffic between the Upper Midwest and Pacific Northwest because it is the cheapest and most cost-efficient way of doing so. As the one time editor of TRAINS Magazine once stated: Strong routes survive. East of Minneapolis/St. Paul, the Milwaukee Road route survives because it is a strong route, even hosting the lone remaining Chicago-Pacific Northwest passenger train (which takes a mostly ex-GN routing west of St. Paul), proving that this is so. That the Milwaukee Pacific Extension didn’t survive (when all others did) is easier to understand when taken in the context of its potential shortcomings rather trying to explain, especially in this case in contradiction to fact, that the superior railroad simply succumbed.

[VerMontanan]

QUOTE: Originally posted by MichaelSol

After 1955, Milwaukee was trying to get rid of the train, "All Freight by '58" was the slogan. If you might suspect they were trying to discourage ridership, you might be right. Of the trains you rode, Milwaukee was the only one that figured out early that long distance passenger service was not something railroads wanted to be involved with.

Actually, 1955 was the year that the Milwaukee embraced the long distance passenger train when it took over the handling of the “Cities” streamliners (and Challenger) from C&NW between Chicago and Omaha. The five extra trains (City of Los Angeles, Challenger, City of San Francisco, City of Portland, City of Denver) traversed 4,880 extra miles every day. These trains alone between Chicago and Omaha operated more miles than did the Olympian Hiawatha on a round trip between Chicago and Tacoma. I have seen little evidence that the Milwaukee was discouraging ridership on the Olympian Hiawatha. Indeed, they tried numerous promotions toward the end in an attempt to bolster ridership, and the Olympian Hiawatha was not discontinued (and then only west of Deer Lodge, Montana) until 1961. The reality is that there were just too many passenger trains operating between the Midwest and Pacific Northwest in a relatively sparsely populated region. In addition, the Budd-built equipment used by GN and NP was very popular. The Olympian Hiawatha also did not benefit from a Portland terminus that the GN and NP trains enjoyed, or the connections they enjoyed. GN and NP touted travel to California via the Pacific Northwest and the Southern Pacific at Portland. Additionally, GN benefited from operating connecting trains to major cities like Vancouver, BC and Duluth, MN that funneled passengers to their transcontinental trains. While in theory these trains could have been used to connect with the Milwaukee Road train too, convenience (connection times and the stations used) clearly favored Great Northern for trips to and from points off the main transcontinental route. It appears that the Milwaukee was not contradicting itself by embracing one set of long distance trains and then trying to get rid of one other (albeit 5 ½ years later). Most likely, the Olympian Hiawatha had too much good competition traversing an area with limited population that, like all passenger trains, was beginning to feel the pressure of the popularity of the automobile as the preferred form of travel.

While claiming to want out of long distance passenger service in one area while embracing it wholeheartedly seems a contradiction, one thing that the Olympian Hiawatha route and the Milwaukee route used by the “Cities” trains across Iowa share, and uniquely so, is that they’re no longer around. Of all the “transcontinental” routes in existence on “Amtrak Day” (May 1, 1971) in the United States (ex-GN, ex-NP, UP to Portland, ex-CB&Q-D&RGW-WP, UP to Los Angeles, ATSF, and SP), only one route, the Milwaukee, has had significant portions of it abandoned (and only one other route, the ex-CB&Q-D&RGW-WP didn’t still have passenger service on Amtrak Day 1971 and that was freight-only on the part of the route west of Salt Lake City and it only was discontinued in March of 1970). By the same token on that date, of the five railroads that traversed Iowa from west to east between Chicago and Omaha (IC, C&NW, MILW, CRI&P, and BN), it is also only the MILW route, again, which has significant portions abandoned. For whatever reason the MILW the Olympian Hiawatha was discontinued and that the “Cities” trains began running on the MILW east of Omaha, neither move was sufficient to counter the fact that strong routes operationally, in one form or the other, survive today, and that the MILW was not one of those strong routes.

[MichaelSol]

QUOTE: Originally posted by Cris Helt

Talk about opportunities lost due to management inaction. [xx(] Wasn't the Milwaukee's shorter route to the Pacific Northwest negated by the steeper grades the road dealt with in it's route to the coast?

This has become an odd point of contention in recent years, for people entirely unfamiliar with the respective lines.

Every professional engineering study ever done on the topic concluded that, as a combination of all of the elements that go into an engineering design, including grade and curvature, Milwaukee had the best route of all transcontinental railroads. This was conceded, for instance, by the Great Northern engineering department during testimony offered to the Interstate Commerce Commission during the Northern Lines Merger case. Actually, it was one of their reasons argued in favor of the merger: Milwaukee had this better route.

If "grade" were the only element, it would still be debatable. Traffic flow for instance. Because historically 2/3 of revenue traffic was eastbound and 1/3 westbound on transcontinentals, this had some significance. For the Milwaukee, this meant that 33% of its revenue traffic had to climb one 2.2% grade on its transcontinental route. For the GN a full 100% of its traffic had to negotiate a 2.2 % grade, then negotiate a tunnel that is the functional equivalent of a 2.2% grade, then brake down a long 2.2% grade, no matter which way the traffic was going. Lots of "2.2%" problems on that route. Significant, well yeah, if you are fastened onto "grade" as a simplistic answer to a complex engineering question.

Which was the "better" route? The professional engineers unanimously have one answer, and the railfan industry seems to have another.

Why are those answers different?

Well, perhaps that gets into a study of religions ....

Best regards, Michael Sol

[MP173]

Just read Todd Jone's article...

I had read it several months ago and it was good to re-read it. How could a company be so mismanaged? It appears no one after Kiley had a clue as to how to run a railroad. The only thing they were interested in was merging.

That railroad had some serious challenges, no doubt, but the core line from Louisville to the PWC would have become a viable railroad.

There had to have been some serious issues within the company as to why the Lines East were favored. One almost has to believe there was intentional sabatage on behalf of the managers which came from BN...or perhaps just complete incompetence.



ed

[Anonymous]

Talk about opportunities lost due to management inaction. [xx(] Wasn't the Milwaukee's shorter route to the Pacific Northwest negated by the steeper grades the road dealt with in it's route to the coast?

[MichaelSol]

QUOTE: Originally posted by jeaton

Even as an outsider without the facts, I would have found Reynold's statement surprising. I think I am correct that the conventional wisdom of the industry said that long haul is "better" in that it is more profitable than short haul traffic. Certainly, not always the case, but I would not try to defend an opposing view.

Jay, this was the view of a senior Milwaukee executive -- an insider who agrees with you -- who disagreed with the whole Milwaukee II theory:

"Here was the Milwaukee, arguing that it could make money off short hauls, while every other Class I in the country was seeking longer hauls. It never made any sense."

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by martin.knoepfel

After all, what count's is what's under the bottom-line, and a mountain-railroad is more expensive to maintain than flat-land-branches. Labor is only one factor in the overall-costs.

Your assessment of costs regarding mountain railroading is probably untrue. Overall, the old Grangers had high traffic density/short haul, lines built less efficiently at an earlier time, higher employment per mile of track, legacy agencies difficult to abandon, significantly higher property taxes, and even climatological differences which leveraged costs in favor of "mountain" railroading, cf Mississippi River floods which could be enormously expensive to railroads like the Milwaukee and the Burlington.

Eastern Montana and Eastern Washington as well as South Dakota had many miles of very dry country -- long tie life in those parts.

By and large, the supposed expense of "mountain railroading" was offset by a large number of significant factors. The Rotaries, for instance, over the years seemed like they were called back to Iowa and used more there than they were in the Bitterroots and the Cascades.

The Operating Ratio of Lines West in 1977, which presumably was worse than in prior years because of increased transit times, was 65%. This was actual revenue earned and actual expenses incurred according to accounting supplied by the Trustee to the Interstate Commerce Commission. This was also after the electrification was terminated which operated under a subsidized power contract and offered extraordinary operating advantages based on price alone.

I would guess that the Operating Ratio of Lines West prior to 1974, based on the subsidized power cost, was somewhere around 58%.

Best regards, Michael Sol

[martin.knoepfel]

Very interesting postings by Mr. Sol.

However, IMHO there is one question unanswered. To which extent did the overall operating expenses on Lines West rise during that period for every dollar of revenue?

After all, what count's is what's under the bottom-line, and a mountain-railroad is more expensive to maintain than flat-land-branches. Labor is only one factor in the overall-costs.

[jeaton]

http://www.trainweb.org/milwaukee/article.html

Jay

[MP173]

Jay:

What article are you referring to?

Michael: fascinating stuff. Perhaps someday when I have time, I will start re-reading this thread. Do you have any idea of what kind of traffic was being generated into Louisville? Was it a daily train each way? At that time, I was in college in Southern Indiana and remember going to Bedford...and seeing a MILW train.

Thanks for your detailed info on the Gateway provisions. I can see how the long haul extentions would have made a dramatic difference on revenues and profitabilty.

Chicago (or Louisville) to the Pacific Coast would certainly make a nice operation today, even with the problems associated with the line.

So, it appears that MILW's problems were the lack of internal ability to distinguish what should have been done vs what certain people wanted to do.

ed

[jeaton]

Michael Sol

Poking around, I found Todd Jones' 2000 article with the credit to you for your assistance. I think it answers my questions, at least to the extent there are any answers.

Jay Eaton

[jeaton]

Michael

Even as an outsider without the facts, I would have found Reynold's statement surprising. I think I am correct that the conventional wisdom of the industry said that long haul is "better" in that it is more profitable than short haul traffic. Certainly, not always the case, but I would not try to defend an opposing view.

So it is interesting to me that that such an apparently biased view of the Pacific Extension came to prevail on the MILW. Why did that come about? I know that from the time it was built its viability had been questioned and I understand that getting the line back in shape was going to take some big money. But at the same time they are trying to loose the long haul traffic, the short haul traffic is going in the tank. Anecdotal of course, but from my observation of freight originating in rural Wisconsin, I would guess that a huge chunk business was either lost to trucks or just went away due to plant relocations and closings.

So the question is, did really they think that the Lines East could be made to be profitable, or was it a strategy, a la Illinois Central, designed to make the property more attractive to another carrier looking to grow?

Jay Eaton

[MichaelSol]

Ed, here is some info about the 1970 Milwaukee Road Gateway conditions.

On March 3, 1970, the Eleven Western Gateways condition took effect, opening gateways to interchange of Milwaukee/BN traffic. Prior to that time, Milwaukee traffic in the West, if destined for destinations located on NP/GN lines, had to be turned over to those companies at Twin Cities terminals, losing the long haul. The Northern Lines historically refused to interchange traffic out West, even though many actual physical connections existed. They simply refused to set joint rates.

The Gateways were located at Fargo, ND, Linton, ND, Miles City, Great Falls, Judith Gap, Bozeman, Butte, Missoula, Spokane, Seattle and Tacoma.

On August 6, 1970, Milwaukee began serving Billings, Montana. This was a separate merger condition, but included not only traffic solicitation but an additional Gateway as well. Milwaukee contracted with BN to haul Milwaukee traffic, connecting at Miles City, Judith Gap and Bozeman.

On March 22, 1971, Milwaukee began serving Portland, Oregon as yet another condition imposed on the Burlington Northern merger. Portland was also a Gateway.

The Gateway Conditions resulted in the following revenues by 1974:

Fargo $243,098.88
Linton $35,114.24
Miles City: $2,999,260.16
Bozeman $32,492.80
Butte $1,443,281.92
Great Falls $253,443.84
Judith Gap $25,043.20
Missoula $93,035.52
Spokane $2,625,789.44
Seattle $6,604,725.76
Tacoma $439,040.00
Portland $12,791,784.96
Total: Gateway Revenue, 1974. $27,586,110.72

The total accumulated Gateway Revenue, years 1970, 1971, 1972, 1973, and 1974 is probably about $100 million.

In addition, however, there was some exceptional agency growth not directly associated with the Gateways.

Billings $1,586,480.64
Great Falls $772,220.16
Butte $1,729,383.68
Spokane $1,100,688.64
Kent $ $9,401,943.04
Seattle $4,947,276.8
Tacoma $4,980,704
Portland $12,604,263.68
Total: $37,102,960.64

Now, these are not totals. These numbers represent increases over 1969 figures, except for Portland and Billings, of course.

For the year 1974 alone, these represented an additional $64,689,071.36 in combined revenues on Lines West due to the Gateway Conditions and other traffic growth. The net for the five years, 1970-1974, close to $250 million. This was new revenue to the Milwaukee Road, solely as a result of traffic growth on Lines West.

By 1978, the total revenues obtained as a result of the Gateways and other improved traffic on Lines West totaled approximately $592,400,655. This was additional revenue from the agencies identified above. This was huge.

Yes, you might have thought that there was the piddling $51 million in there somewhere that the Federal Railroad Administration estimated in 1978 was necessary to bring the Western mainline up to Class IV standards.

Milwaukee’s revenue growth between 1969 and 1974, due to entry and gateway conditions, was in real (1974) dollars $69,956,345.00 (including the Louisville entry condition of the Monon merger). However, Milwaukee’s overall system revenue growth in 1974 dollars between 1969 and 1974 was only $77,445,057.00. As you can plainly see, Lines West and Louisville were driving the growth of the Miwaukee Road almost entirely, particularly since expenses growth was outstripping the revenue growth on Lines East by a considerable margin. Only 25% of the system mileage, mainly Lines West of Miles City, was contributing 90% of the system revenue growth in the nine year period, 1970-1978. The system "core," constituting 75% of the system mileage, had contributed only 10% of the system growth.

Indeed, on Lines West, additional labor to handle the traffic added $1.00 of expense for every $5.00 of revenue gained. During that same period, Lines East added $2.00 of labor for every $1.00 of revenue gained. Overall operating expenses on Lines East during that period added $5 of expense for every dollar of revenue. You can see what was grinding down the Milwaukee Road during the 1970s, a dramatic collapse of Lines East insofar as expenses outstripping revenue. Lines East wasn't growing, but the expenses were.

The other bright spot was the Louisville entry, which added some surprising, long PNW hauls. The Louisville Entry added about $600,000 in additional employee compensation costs, while earning $19,418,013 in additional revenue by 1974.

Accordingly, when VP Market Development & Pricing Glenn Reynolds testified to the ICC in August, 1979 that "we have been disappointed in the ultimate results of the 11 Western Gateways" I called him up about my jaw which had dropped off. What on earth was he talking about? There were 13 Western Gateway conditions, and they had been enormously successful. The numbers showed that.

Of course, now you can see the basis for the BAH study, and why Hillman was floored when he got it. He was the victim of a conventional wisdom that has been perpetuated since then by railfan magazines which is, simply, utterly false. They missed the big story.

Prior to 1977, the Lines East, Milwaukee Road, had lost over $600 million. This had been obscured by earnings from Lines West and Louisville. Lines East was the part that staff wanted to save.

Too late, Stanley Hillman realized they were wrong ....

Best regards, Michael Sol

[jeaton]

Bergie says my rate per word doubles with my next star, so I figure that I will be able to resign that position and make it OK.

[MichaelSol]

QUOTE: Originally posted by jeaton
I never aspired to be a railroad president.

Being a Chief Scoundrel has to be much more rewarding, with fewer responsibilities.

I suppose there is the question of pay ....

Best regards, Michael Sol

[jeaton]

MP173

Barnard rings a bell, just can't get a face on the name. It may either be the passage of time or the fact that my resume lists several other companies and many business acquaintances after the IC. About 1973, new guy was brought in to head up sales and he turned the force over and then turned it over again, and maybe again. If he got into that revolving door, I might have missed getting to know him.

On the other hand it could be that sections of my brain's memory units have dropped off line.

Jay

[MP173]

Micheal:

I posted for your comments on the MILW on the other topic, not realizing this one had been reopened. If you care to address my questions on this, I would be grateful.

Jay...did you by chance work with a man at IC by name of Thomas Barnard? He worked in sales/marketing in the early 70's....would have been in his early 20's.

Fascinating stuff about MILW and the proceedings. I vaguely recall it, but at the time was much more interested in other things.

ed

[jeaton]

I knew about Hillman's POW experience, and that alone would make me give him all the respect I could ever muster. Of course, I did not know of his private behavior, but I would have very been surprised to hear anything other than complements of his character.

I left the IC shortly before Boyd was out so I missed out on the controversy. I can't really say where I might have stood. I found Boyd to be a very cordial person, but I was hardly ever "in the room", so I really had no good view of how he did his job. I do know that there were some tragic events on his watch, including the big coal train wreck at Riverdale and the suburban train wreck at 27th that I recall took over 30 lives. Both involved clear violations of safety rules, and although I am not going to put any fault above the involved employees or their immediate supervisors, the top people can set a tone.

As for Hillman's ability to "manage" a railroad, I am never going to argue the ridiculous notion that any CEO needs to know every job. But, I think railroad managers face more than the industry norm for the inherent conflicts between operations, mechanical, engineering and marketing. One either needs to be experienced, very savvy or have reliable and team oriented people as department VP's. Larry Herndon worked for Herb Landow in the Milwaukee's Market Research and he once passed this quote on to me. "There is no difference between managing a railroad and any other manufacturing business with a plant four feet, eight and half inches wide and a thousand miles long.

I never aspired to be a railroad president.

Jay Eaton

[MichaelSol]

QUOTE: Originally posted by jeaton

I am glad you added the background on Stanley Hillman, and you have described him to a T. I worked in the IC Marketing Department from 1969 to 1975 and although I never had any direct interaction with him, I was well aware of who he was, and what he was like in the company environment. I was down the ranks a bit, but with the times and the people involved I was comfortable addressing most of the company VP's on a first name basis. Mr Hillman was an exception to that. I would no more have addressed him by his first name than I would address the President of The United States as George.

He was an interesting fellow. His war experiences, as a POW under the Japanese, certainly ranks as one of the ordeals that a person can go through. That he met his future wife in a POW camp is quite a story in itself. His firing of Alan Boyd at ICG was a deeply controversial and divisive action at ICG. Taking over the reins himself was problematic. His successor at ICI, Robert Schnoes,had nothing but praise for Hillman, but offered that Hillman was "strictly a financial guy, not an operating man." He emphasized that.

This probably accounts, in some part, for Hillman's reliance on staff for important operational decisions at the Milwaukee, such as terminating Lines West. The first speed bump was no doubt the "Application to Abandon," filed with the ICC.

It showed a $50 million or so operating profit on Lines West, during the year the Company lost $55 million overall. This was explained by a convoluted gymnastic involving ICC regulations for "branchline" abandonment applications. If he was suspicious, he still signed the Application. When the BAH report came in, showing the same thing without reference to complicated ICC valuation formulas, I suspect that was the straw....

Schnoes described Hillman as a "terrific family man, the kind of fellow you would want for your next door neighbor". If you lived in Lake Forest ....

Every day, he would walk his French Poodles ....

He was acting Chairman of the Board of Conrail prior to his death; still active in the rail industry.

Best regards,
Michael Sol

[jeaton]

Michael Sol

I am glad you added the background on Stanley Hillman, and you have described him to a T. I worked in the IC Marketing Department from 1969 to 1975 and although I never had any direct interaction with him, I was well aware of who he was, and what he was like in the company environment. I was down the ranks a bit, but with the times and the people involved I was comfortable addressing most of the company VP's on a first name basis. Mr Hillman was an exception to that. I would no more have addressed him by his first name than I would address the President of The United States as George.

Jay Eaton

[MichaelSol]

After 1955, Milwaukee was trying to get rid of the train, "All Freight by '58" was the slogan. If you might suspect they were trying to discourage ridership, you might be right. Of the trains you rode, Milwaukee was the only one that figured out early that long distance passenger service was not something railroads wanted to be involved with.

Best regards, Michael Sol

[passengerfan]

Having beeen fortunate enough to ride at least six Northwest transcontinentals CN, CP, GN,NP, UP and Milwaukee Road. I first rode the streamlined Empire Builder in February 1947 the month and year it was inaugurated as a streamliner. Rode the Empire Builder more than any of the others and can claim riding the North Coast Limited, Canadian, Super Continental, City of Portland and Olympian Hiawatha. I rode the Olympian Hiawatha in 1958 before its demise and found the train lacking compared to its competition. I especially enjoyed riding in Coffee Creek the Bedroom lounge Skytop Observation and it was especially beautiful crossing Snoqualmie in a Thunderstorm and how the electric up front hit ice on the wire near the exit to the Summit tunnel and the resulting arcing lit up the entire tunnel and in Coffee Creek it was one of the most facinating sights I ever witnessed. The rest of the train diner and coaches were dated interior wise and was not particularly impressed with the cleanliness of the train, as my notes point out. How did I rate the Northwest streamliners
1st GN EMPIRE BUILDER
2nd NP NORTH COAST LIMITED
3rd CP CANADIAN
4th CN SUPER CONTINENTAL
5th UP CITY OF PORTLAND
6th CMSTP&P OLYMPIAN HIAWATHA

[jeaton]

Michael

Thanks very much. At the time I wasn't taking much of an in depth look at the situation, and it certainly was much wierder than I had ever thought.

I had thought that the Lines West abandonment was a done deal when Hillman left, but I stand corrected. Still, it seems doing a turnaround at that point would have taken a strong and very railroad savvy trustee. Obviously, Olgivie wasn't that guy and I guess from what you say he was listening to the senior managers who had made up their minds in spite of some strong facts.

What in the world would ever make McMillen think that the Soo Line would be any less aggresive seeking abandonment than the C&NW? And the international trade and friends justification? Excuse me if I slip into my scoundrel mode, but that was just nuts. OK, the comment of the Appeals Court was better. "District Court establishes foreign policy"

As an aside, I was raised up near Merrill and I do remember, and kind of miss, the loose car railroad business. I worked the summer of 1958 at one of the sash and door mills, and at that time I think Merrill was generated at least 30 cars a day of canned goods, wood products, shoes, paper and probably other goods. A pick up probably could have handled a week's worth of out bound truck freight. Of course, then it would take at least 10 hours to drive from Merrill to Chicago. Most of those businesses are gone, and I am not sure that there is even any industrial side tracks left in town. I know that there is business coming out of Tomahawk and Wausau and I think the CN uses the route as an option to the old Soo route to the west. The MILW from Tomahawk to the Michigan State Line is a trail. At least my little piece of Milwaukee Road is still an operating line, but I have to day dream to get it to be anything like my memories.

The Merrill passenger station survived up to at least ten years ago, but I noticed last week that it had been paved over for a grocery store parting lot. Just one of the drawbacks of growing old.

Sometime near the earlier part of his presidency, I was at some function where Smith was speaking and he used Walt Kelly's Pogo character line that is part of my signature here. You get attribution for my title. I don't mind if you don't.

Jay Eaton

[nanaimo73]

Is this what you mean, 1 mile south of Mccall ?
http://terraserver.microsoft.com/image.aspx?T=1&S=11&Z=11&X=1057&Y=13028&W=1
I'm sure that is it, and it would show the SP&P (N-S)over the CMSP&P (E-W) on a bridge.
About 30 miles to the west the CMSP&P crossed over the NP
http://terraserver.microsoft.com/image.aspx?T=1&S=11&Z=11&X=938&Y=13006&W=1&qs=%7cservia%7c

[Anonymous]

Michael,

On a minor inquiry, was the intersection of the Milwaukee and SP&S a separated grade or an at grade diamond? If the latter, who had the right of way?

[MichaelSol]

QUOTE: Originally posted by jeaton

.... if you would continue to comment on the Milwaukee Road history for the time after Hillman resigned as Trustee. If I have it straight, former Illinois Governor *** Ogilvie replaced Hillman, got the Wisconsin Central spin-off going, and was there until the Soo Line got the remaining lines.

It was a freak show.

Hillman resigned after the Booz Allen Hamilton study reached his desk mid-May, 1979, showing that the only profitable configurations of a proposed reorganized Milwaukee Road included the transcontinental line. This was no surprise, except to Hillman. I pointed out on the other thread that the BN Merger conditions had been enormously successful for the Milwaukee's transcontinental operation. Any net profit that the Company earned after 1970 came entirely from the transcontinental operation.

I think Hillman felt hoodwinked by some of the staff that was advising him, and he saw in the BAH report the fact that he was abandoning the wrong part of the system. He had staked his reputation on what he had been told by staff, and here it was, an independent assessment that showed exactly the opposite. The transcontinental operation had the best future prospects, while his much touted "Milwaukee II" had none. He developed a perforated ulcer, and resigned.

His Counsel, former one-term Illinois Governor *** Ogilvie. Ogilvie had been Judge McMillen's first choice to be Trustee, but Ogilvie had turned him down at that time. He and McMillen were friends. This time,he took the job..

Apparently, there had been a dust-up between Hillman and some of that staff over the BAH report.

"The only area where I, and several other senior officers of the Milwaukee at the time, disagreed with Mr. Hillman was over the recommendations coming out of the BAH report. Their recommendation to retain the west end and get rid of most of the rest of the railroad except the mainline would have been a disaster if it were to be implemented. [Fortunately] Mr. Hillman retired and Mr. Ogilvie listened to our suggestions and moved the railroad towards what I clearly felt was the right direction."

Ogilvie was easier to work with, that is, he took their word for everything. The abandonment of Lines West could continue.

Of course, Hillman's independence from staff once he got the BAH report has some background. Interesting guy. Met his wife in a Japanese POW camp in WWII, a captured British army private. He had worked for British American Tobbacco company after the War, and then got into transportation.

Stanley Hillman was the vice president--planning, Illinois Central Industries. He was as much responsible as William Johnson for putting together one of the most successful of railroad holding companies. Hillman himself had come to the Milwaukee after retiring at IC, just concluding a two year stint of running the Illinois Central Gulf Railroad after firing Alan Boyd. He was a financial guy, "the best businessman I ever worked with." [W.L. Smith].

Very dignified, reserved. Commanded respect. I inadvertently referred to him as "Stan" on one occasion, and Walley Abbey was all over me, it was either "Stanley" or "Mr. Hillman." He was a recognzed pillar of the Chicago business community.

By contrast, Ogilvie was a lawyer turned politician turned lawyer again. He had never run a business in his life.

In October, 1981, the Grand Trunk Western Railroad, a subsidiary of the Canadian National Railway, expressed an interest in purchasing the Milwaukee Road. In anticipation of several significant operating advantages to the Grand Trunk by a tie-up with the Milwaukee, Grand Trunk and the Trustee immediately agreed on coordinating operations, and Grand Trunk shifted its interchange traffic west of Chicago from the Chicago & Northwestern to the Milwaukee. By the end of the first quarter of 1982, the Milwaukee Road posted its first profit in 9 years. On May 24, 1982, the two railroads signed a letter of intent for transfer of stock ownership from Chicago-Milwaukee Corporation, owner of substantially all of the Milwaukee Road's stock, to the Grand Trunk.

This roused the remaining Midwestern railroads -- the Chicago & Northwestern and the Soo Line -- to attention. Grand Trunk-Milwaukee would upset the apple cart too much, and both railroads, previously content to let the Milwaukee drama wind down to some forlorn conclusion, promptly made aggressive proposals to purchase the Milwaukee Road outright. And for good reason, the Milwaukee Road -- a railroad in receivership -- was showing some unusual signs of health. This renewed health was demonstrated both in income and in re-evaluations of the overall wealth of the railroad.

For Ogilvie, these proposals suddenly thrust the Milwaukee reorganization into a whole different perspective. For one thing, the Milwaukee had incurred federal loan subsidies between the time it entered reorganization on December 31, 1981 of $224.2 million. Under an unusual provision of the Staggers Rail Act of 1980 the Milwaukee Railroad Restructuring Act was amended to allow that the Milwaukee would be completely forgiven of its federal loan guarantees -- totalling nearly $250 million -- if substantially all of the railroad were to be merged into another company. This unusual provision, not much remarked on at the time of the passage of the act, provided an almost overwhelming incentive for the Trustee to ensure the disappearance of the Milwaukee Road as an independent entity.

The Milwaukee suffered accumulated net losses through the end of 1982 of a horrendous $469,608,000; government loans pushed the total investment in the Milwaukee Road's properties to a point finally exceeding a Billion dollars.

The Trustee placed the three competing bids before the Interstate Commerce Commission. The ICC rejected the Grand Trunk's offer, approved the Soo Line's offer, and neither approved nor disapproved the Chicago & Northwestern's offer. Both Soo Line and C&NW had offered $150 million plus assumption of debts. Chicago-Milwaukee Corporation asked the ICC to reject both offers as too little, stating that the net value of the Milwaukee Road was $360 million. The ICC pointed out that at $360 million, this was 16.9 times the Milwaukee Road's earnings and eight times its projected earnings for 1984. CMC's valuation was 40 times current earnings, which the ICC thought unrealistic. The observer could only wonder why CMC, now wanting $360 million, was so willing to sell the Company to the Burlington Northern for $90 million, only a few years before.

The Chicago & Northwestern then met this "unrealistic" assessment by offering $360 million and offering to assume over $420 million in liabilities. The ICC reopened its decision, but while approving the C&NW's new offer, still expressed a preference for the Soo Line's bid, as preserving more rail competition in the area.

With the ICC's preferences in hand, Judge McMillen reviewed the situation. The Trustee and Chicago-Milwaukee Corporation wanted to take the incomprehensible offer of the Chicago & Northwestern, as it would have meant $210 million more to the holding company than the Soo's offer. On September 5, 1984, the Grand Trunk, having expended time, money, and resources, having made a commitment to purchase when no one else would, and having created the conditions by which the Milwaukee became profitable, found itself merely a bargaining chip in the hands of the ungrateful Milwaukee Trustee, and revoked its offer of purchase. It entered into a coordination agreement with the Burlington Northern, and pulled its traffic from the Milwaukee Road.

The CNW bid was the one preferred by the Milwaukee. It was believed to be a done deal. The two companies organized merger committees for scheduling and consolidation. McMillen held oral arguments and *** Ogilvie argued strenuously that the CNW proposal should be accepted. I missed the oral arguments, but years later Judge McMillen mentioned to me that there was a lot of emotion over the CNW bid, which he did not understand.

I asked him what he meant, "emotion."

"Well, during the oral argument *** was getting pretty wound up over the whole thing. He finally broke down completely. Completely lost his composure. I had to order a recess."

Judge McMillen issued his opinion regarding the two competing bids. He read it orally in open court. Milwaukee President Worthington Smith handed over a dollar to a colleague. He lost his bet that CNW would get the nod.

McMillen's decision can only be fully appreciated in light of this being the same judge who allowed a major transcontinental operation to be slowly strangled and then terminated before his eyes without so much as a hint of concern. McMillen stated that he preferred the Soo Line's bid because he heard that C&NW planned to abandon as much as 1,100 miles of track if they proved unprofitable (C&NW had in fact not asked for any permission to abandon anything). This bothered McMillen, in a way which can only seem peculiar when compared with his willingness to abandon the last direct transcontinental competition to the Burlington Northern Railway:

"Now, what is the matter with abandonment? Well, for one thing it costs jobs. People are going to be out of work that were working on the abandoned transportation system or routes. Another consideration that hasn't been, really, considered very much but was mentioned by one of the Commissioners ... is the matter of national security.
...
" ... I would say that once a railroad is abandoned once a piece of trackage is pulled up and the land sold it isn't going to be replaced. It is almost irresponsible under the international situation that we are faced with today to tear up pieces of a railroad system, which is probably the best in the world, for no better reason than a few million dollars in the bidding price.

"I must say that I think that national security is a very important consideration for keeping an extensive and more viable system of transportation ..."

The Soo Line got the Milwaukee Road with Judge McMillen's permission, the sale closing on February 20, 1985. The Chicago-Milwaukee Corporation, among others, appealed. The United States Court of Appeals has infrequently heaped sarcasm and scorn upon one of its own district judges, but it was obviously stunned by not only what McMillen had done, but how he justified it.

The Court summarized that the primary reason for the appeal was that the investors in the Milwaukee Road -- represented primarily by the Chicago-Milwaukee Corporation -- did not understand "why they should be required to contribute $210 million to the national defense."

Good question.

The Court of Appeals, in reading over Judge McMillen's views on national defense, was puzzled as to his attachment of such great importance to that consideration since the Department of Defense "had not expressed the view that abandonment of track is contrary to the interests of national security."

Another of McMillen's rationale's to support the Soo Line bid was that its parent corporation was the Canadian Pacific Railway. His thoughts on that one got even weirder. McMillen pondered:

"Let's face it. The United States needs foreign trade and needs friends. We are no longer an unsinkable battleship, as they called the British Isles in World War II. If there is going to be another World War, the United States and our transportation system and our cities are going to be targets for the enemy to hit. If we have friends in Canada, we have access to Canada, we have one more way of defending ourselves. But aside from that because I am not an alarmist about international affairs, it certainly does promote international trade and we certainly are in need of that. "

Soo Line's Dennis Cavanaugh cleverly sat down the evening of Judge McMillen's initial decision, and he and Ogilvie signed deeds transferring everything to the Soo Line, working until midnight. This made the sale an accomplished fact before anyone could get to court for an injunction the next day.

The Court of Appeals noted wryly that "having established its foreign policy, the District Court proceeded to consider whether the Soo Line's bid was constitutionally adequate to protect the Chicago-Milwaukee Corporation against an "unfair taking".

Although the Court of Appeals thought McMillen's reasoning was at best feeble, or at least inexplicable, it refused to find a reason to reverse him because of technical considerations, not the least of which the sale was already an accomplished fact, and that the sale was "a fair market value" even if not one offered by a bidder, or a market value calculated by other means.

With the sale to the Soo Line, the Milwaukee Road ceased to exist as an independent railroad. Worth Smith retired, the last president of the Milwaukee Road. He wasn't going to work for Dennis Cavanaugh.

The Soo operated the Milwaukee as a subsidiary after purchase -- the Milwaukee Road Inc.-- which lasted until December 31, 1985. On January 1, 1986, the Milwaukee Road disappeared altogether, as it was absorbed into the Soo Line Railroad.

After McMillen's decision, *** Ogilvie never again spoke to Tom McMillen.

Best regards, Michael Sol