The Milwaukee Road

[Anonymous]

QUOTE: Originally posted by martin.knoepfel

I wonder whether laying a third rail in the Cascades-tunnel would be a cheap way to increase capacity. BNSF could then buy some regearde passenger-diesels with third-rail-shoes and put them onto their trains. note: one doesn^t need to replace all diesels on a trains. exhaust from diesel engines has to be reduced only to the degree that length between sidings defines line-capacity.

An interesting point to ponder, and something akin to what BN/BNSF already studied, and rejected, in the 1990s. Re-electrification of Cascade Tunnel was one of three major proposals for increasing capacity across the Cascade Mountains. Re-opening Stampede Pass was the second, and double-tracking the former SP&S route along the Columbia was the third. And, yes, the Columbia River Gorge is considered a mountain pass of sorts, albeit a water-level gap through the heart of the Cascades.

The latter was rejected due to cost and anticipated grumblings from environmentalist extremists. Re-opening Stampede Pass was accepted as the least expensive and most viable option.

"Capacity problems" through Cascade Tunnel on the old Great Northern are somewhat exaggerated: That line is holding its own and hasn't reached a critical mass. Upgrading the ventilation system might be one way to increase capacity. Directional traffic is another option.

The core issue, somewhat overlooked due to its relative obscurity, is what to do with an underutilized Stampede Pass route that sees only three to six trains per day. The idea was to route empties eastward via Stampede, with the occasional low-priority eastbound and westbound manifest, freeing up the Gorge and Cascade Tunnel for more higher priority westbound grain trains and intermodal, and eastbound intermodal and manifest trains.

Until I see Stampede Pass used by eight to 12 trains a day, as BNSF originally estimated would take place by 2000, and I realize "estimated" can be a dangerous word to place too much emphasis on, then I'll concede that Cascade Tunnel is facing capacity issues.

Hindsight is 20/20, of course, but BN management -- if the former Frisco cabal that took over could be called management -- screwed the pooch by not aggressively upgrading MILW's Snoqualmie Pass line after purchasing it and then proceeding with abandoning Stampede Pass. The MILW has better grades, curvature, and more than adequate clearance in Snoqualmie Tunnel for double-stacks. Of course, foresight in the early 1980s was not something that BN could have been accused of with much hope of accuracy. It's often rumored that one former BN president woke up daily wondering what he was doing wrong: the railroad was still in existence.

[martin.knoepfel]

Dave: Something like the FL9. Of course, the FL9 are too old - if they exist at all. But Metro North aquired newer diesels equipped for the lines into Grand Central.

A similar engine for the Cascades-tunnel would of course need a gear designed for heavy mountain railroading. I guess, 50 mph top speed is enough.

My plan of operation would be: before entering the Cascades-tunnel, the engines changes from diesel to electric traction. note: not all engines on the train have to be dual-mode since the existing ventilation should not be removed.

of course, the dual-mode-engines have to be able to run in mu with diesel engines.

[chemung]

Martin,are you thinking of the New Haven FL9,diesel on the road and third rail electric into New York's Grand Central?

Dave W.

[martin.knoepfel]

I wonder whether laying a third rail in the Cascades-tunnel would be a cheap way to increase capacity. BNSF could then buy some regearde passenger-diesels with third-rail-shoes and put them onto their trains. note: one doesn^t need to replace all diesels on a trains. exhaust from diesel engines has to be reduced only to the degree that length between sidings defines line-capacity.

[Anonymous]

This is a great discussion, with many intelligent contributions.

Someone mentioned that CM&St.P missed an opportunity in 1905 to secure what became the SP&S's route on the north bank of the Columbia River. I partly agree; however, James Hill would have blunted any attempt by CM&St.P's to secure the Columbia River route. CM&St.P didn't set out to build the PSE until 1906. By then it was too late.

One other point I want to raise: Over the years there's been talk that BNSF could revive part of the PSE between Ellensburg, Wash., and Lind, Wash., where at both places the former NP and MILW routes intersected (no junctions however). The idea would be to shorten BNSF's route and time over the Stampede Pass route between Interbay (Seattle)/Tacoma and Yardley (Spokane), without encountering delays at Pasco, Wash.

Trouble is, a part of the MILW right of way under consideration passed through the heart of Central Washington University, and there are now expensive new campus buildings residing on the right of way. BNSF would have to build a new alignment north of Ellensburg, where new home construction is already proceeding at a rapid rate. The Ellensburg-Lind route for BNSF becomes less practical with each new subdivision. The right of way is still intact west and east of town -- getting around the Urban Growth Boundary and battling the NIMBYs isn't, in my opinion, worth the effort for BNSF at this time.

[MichaelSol]

SP looked at Milwaukee during the 1970s; the transcontinental line was a big attraction; the sagging fortunes of the Midwestern portion however, presented insurmountable obstacles. Milwaukee officials did note that its interchange with Santa Fe was substantial; they had a natural traffic connection ....

[Anonymous]

QUOTE: Originally posted by railman

QUOTE: Originally posted by futuremodal

I had often thought that the Santa Fe might want a shot at the Pacific Northwest. I believe that desire was one of the reasons for the aborted Santa Fe/SP merger. Likewise, Milwaukee must have been longing for some kind of entry into the lucrative Califronia market throughout its existence.

To anyones knowledge, was there ever an effort by SF or CMStP&P for a Santa Fe-Milwaukee merger?

Now that would have been a paint sceme to lay eyes upon.

Anyone for Warbonnett Orange? Ooops, I think BNSF already did that one!

[railman]

QUOTE: Originally posted by futuremodal

I had often thought that the Santa Fe might want a shot at the Pacific Northwest. I believe that desire was one of the reasons for the aborted Santa Fe/SP merger. Likewise, Milwaukee must have been longing for some kind of entry into the lucrative Califronia market throughout its existence.

To anyones knowledge, was there ever an effort by SF or CMStP&P for a Santa Fe-Milwaukee merger?

Now that would have been a paint sceme to lay eyes upon.

[Anonymous]

I had often thought that the Santa Fe might want a shot at the Pacific Northwest. I believe that desire was one of the reasons for the aborted Santa Fe/SP merger. Likewise, Milwaukee must have been longing for some kind of entry into the lucrative Califronia market throughout its existence.

To anyones knowledge, was there ever an effort by SF or CMStP&P for a Santa Fe-Milwaukee merger?

[MichaelSol]

As a follow-up, and a note regarding the "junior" company in the merger, the originally agreed upon terms of the Milwaukee-CNW merger contemplated that Milwaukee Road shareholders would own 63% of the new company based on the market capitalization of the two companies. The Milwaukee was perceived, both by the market and analysts, as the significantly stronger of the two companies when these terms were agreed on in 1965.

Milwaukee shareholders would own the significant majority of shares in the new company. Tough sell to the CNW. CNW agreed to these terms only upon the condition that CNW have the majority of the board members on the new board, at least until the first election of new directors. CNW's strength in this regard was the fact that the CNW shares would be voted by one very large shareholder: Northwest Industries. Milwaukee shareholders were widely dispersed. The seeds, perhaps, of the Chicago Milwaukee Corporation.

Ironically, CNW's decline in value after that point meant that by 1970, when the ICC ordered that the stock exchange be modified to reflect the change in relative values, such a re-evaluation would have changed more than just the stock exchange ratio.

The Milwaukee ownership of the new company would have increased significantly under the ICC order, so much so that the agreement to have a majority of CNW directors, already difficult to justify under the former arrangement, would have been untenable under a new exchange proposal. Shareholder lawsuits would have been successful: the dominant company's shareholders should be able to control the new company.

The delicate balance of ownership vs control, carefully structured to satisfy both companies, could not survive the ICC's order, despite the agreement of both companies to proceed. More than a decade later, the same ICC would tout its respect for "private industry initiative" and its reluctance to interefere with such initiative.

Best regards, Michael Sol

[Anonymous]

I think your "deferred maintenance" theory is true throughout the railroad industry, and was not just confined to the Milwaukee. Everytime a Class I needs to "sex up" it's stock reports, it is usually at the expense of ongoing maintenance.

All in all, it's extremely unfortunate the Milwaukee disappeared from the scene. We could use another railroad here in the Pacific Northwest.

[MichaelSol]

The Milwaukee Road under the chairmanship of Leo Crowley had adopted in the early 1960s the idea becoming common among railroad executives that 1) passenger traffic was going to be a permanent drain on earnings, 2) that the ICC was never going to offer rate flexibility that would permit acceptable rates of return for the industry as a whole, and that 3) merger and consolidation offered the best hopes of decreasing operating expenses relative to revenue.

The revenue effects of the Interstate Highway System were just beginning to be felt by those railroads in the East and Midwest most affected by highway competition. The two most influential directors at North Western, Ben Heineman and Morton Weinress, saw, as I think Crowley did, that four railroads in the Midwest competing for a shrinking share of the relatively short-haul traffic most subject to diversion by highway competition was a recipe for disaster. CNW's average line-haul at that time, if I recall correctly, was something on the order of 150 miles. A rule of thumb on traffic diversion then was that anything under 700 miles was subject to diversion if it could be carried by a truck.

CNW's line-haul problem was that it was in essence a large marshalling yard for the Union Pacific Railroad, which obtained the long haul revenues from CNW's efforts. No amount of marketing was going to change the fact that CNW spent a higher proportion of revenue on handling freight than any of the transcontinentals. Even the Q and the Rock Island were somewhat better off in this regard. The Milwaukee had a better line haul average than any of the other Midwestern roads by virtue of its Western extension. However, what that better line haul obscured was the fact that Milwaukee traffic in the Midwest was, with the completion of Interstate Highways 90 and 94, perhaps the most subject to highway traffic diversion of any of the four Granger roads and that, without the transcontinental line, Milwaukee probably had a shorter line haul average than even North Western.

It is useful to note that the Interstate Highway System through Wisconsin, linking Chicago and St. Paul/Minneapolis, was completed in 1969. Milwaukee Road reported its first post WWII loss in 1969. Probably no coincidence.

However, Milwaukee had that transcontinental line. CNW Director Weinress, in particular, saw the Milwaukee Road as a potentially very strong property, and particularly if the Milwaukee and CNW could merge and the transcontinental traffic of both Midwestern lines diverted to the Milwaukee's Pacific Coast Extension.

Recall that Milwaukee had a "stealth" provision requested in the Northern Lines Merger proceedings: access to Portland. That condition was not nearly so important vis-a-vis the merging northern lines as it was a significant aspect of the combined MILW-CNW system. The new Company would compete directly with UP for UP's most valuable freight, that freight for which UP was the direct connection in the Pacific Northwest. And the Midwest shippers would be located entirely on the MILW/CNW system. The Milwaukee Road transcontinental line would replace the UP as the high value, long haul carrier of transcontinental freight to the PNW and in the northern tier, and UP would be relegated to a bridge carrier serving SP.

For the first time in its history, CNW could obtain the long haul from its own transcon freight. That fact alone, without regard for consolidation of facilities and operating cost saviings, would have generated significant new revenue for the combined company. The Union Pacific might have looked like a very different company today had it lost that traffic and Milwaukee gained the traffic.

There was a natural jockeying for shareholder advantage, as the shareholders of course had to approve the merger. Crowley made sure that healthy dividends were paid out during the time this proposal was on the table. I doubt that he fooled anyone at North Western about it, but it made him look good to Milwaukee shareholders and as the man to lead the Milwaukee to its ultimate salvation through merger with the North Western. Unfortunately, the wheels were coming off of the North Western at this time and its stock value was plummeting. Crowley kept Milwaukee stock at a pretty good price through his dividend strategy.

North Western didn't have the resources to do the same thing, and as the price of shares of the two companies continued to diverge, the ICC -- after approving the merger upon one set of terms and share exchange value -- ordered the two Companies to re-value the stock exchange proposal involved to account for the diminished value of North Western stock.

For North Western, this made approval by its shareholders, having seen the value of the transaction go up in smoke, problematic. It presented a difficult hurdle for management to be forced to concede to company shareholders that their management of the railroad company had greatly harmed the value of North Western stock so badly, vis-a-vis that of the Milwaukee Road. So, CNW management was more or less forced to withdraw by virtue of the ICC order.

Well, Crowley had been raiding the company maintenance accounts for the ca***o pay the dividends. This had been going on for nearly seven years while the merger proceedings drug on and on during those days when the ICC never saw a merger case that it couldn't deal with in 10 or 12 years or so.

This came to my attention when Worth Smith mentioned to me one day that, well, Milwaukee had all this deferred maintenance because it never generated enough money to properly maintain the railroad. This comment underscored for me one of the advantages of a strong institutional memory in a company, and one of the dangers of "outside" management that is so forward looking to the future, it has no idea why it is where it is at the present.

I went back and compiled Milwaukee's historical maintenance figures, during the 1950s when it was generating a profit, and yet still engaged in numerous improvement activities throughout the system, and plotted maintenance expenditures against the dividend policy. As Milwaukee began to come up against Interstate Highway competition in the 1960s, it was clear that the illusion of profitability was being maintained at the sacrifice of deferring maintenance. Those stockholders were going to be happy stockholders and support Crowley when they saw that they were assured a good valuation ratio in the proposed CNW merger stock exchange.

The strategy was much more risky than it reasonably seemed at the time. At the time, this was a friendly merger: both sides were in favor. CNW's two most influential directors were very strongly in favor of it. Crowley did everything he could to assure shareholder approval at Milwaukee. Shippers supported it. The long haul revenues obtained after merger would easily pay for any deferred maintenance accrued. It was a natural companion merger to the UP-Rock Island, and to the NP/GN/CBQ merger proceeding. So the ICC order sending everything back to the drawing board, and North Western's understandable decision to withdraw at that point were quite a shock to Milwaukee Road. It was not one of the plausible alternatives anticipated by Crowley.

The Midwest Rail Crisis was already gaining momentum. The industry had proposed what really were the obvious solutions long before the crisis hit. The Milwaukee and North Western would combine and operate a transcontinental system. UP and Rock Island would give UP competitive access to the Midwest it was losing in the Milwaukee/CNW tie-up. CBQ/NP/GN would absorb the remaining Midwest carrier. Each of the three mergers would have produced strong systems. There would have been no Midwest carriers left to have a crisis.

However, the ICC's unwillingness to deal with the merger proceedings placed before it in the 1960s virtually guaranteed the debacle that would occur in the 1970s, including the loss of the Rock Island and the Receivership of the Milwaukee. CNW barely escaped. In 1977, North Western reported approximately $969 million in deferred maintenance, far more than the Milwaukee, more than the Rock Island, more than any other Class I railroad in the country.

I went back to Smith with my findings. Deferred maintenance had been an intentional policy at a time when Milwaukee Road had the resources to maintain its system and simply chose not to, in pursuit of a merger strategy. Cash was simply siphoned out of the system to pay off stockholders. There was no Plan "B" in case the merger fell through. When the deluge of traffic came, there was no system to support it.

I finally got a short note back: "your analysis is right on the mark."

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by wrwatkins

If the picture of the Milwaukee track at Hilldale south of Tacoma (link on the first posting of this topic) is indicative of their MOW travel must have been like Mr. Toad's Ride at Disneyland. Was this how the entire line was at the end?

Pretty much. If you look at some of the other photos in this series you can also see it. This was all mainline track that had practically no maintenance for maybe 15 years. Most of the ties had been under the rail for twice as long as was usual. When the change to diesel-electric was made the biggest problem was keeping the heavier diesels on the track. I often wonder if this was one reason they weren't able to find a merger partner. All they had to offer was the roadbed. The track would have to be entirely rebuilt. No small feat at any time!

[arbfbe]

I don't think that the Flathead Tunnel has any more capacity than the Cascade tunnel, about one train per hour. They could install more internal doors or larger fans to decrease the flu***imes. Reducing the head times to 40 minutes could increase capacity at this bottle neck by 50%, 30 minutes could double the capacity. This would be the cheapest route to increase capacity on the old GN lines. Flushing the tunnels is moving tons of air through a restricted space. Just like taking trains over the mountain more horsepower works wonders. Currently the prime movers at the Flathead tunnel are 35 series 2500 hp engines from EMD. If the fan blades will take the additional stress they could be upgraded to 70 series engines at 4400 HP.

[Anonymous]

QUOTE: Originally posted by M.W. Hemphill

The GN still has excess capacity to this day. The Milwaukee Road, even if it's track were perfect, and the two routes were pitted against each other right now, wouldn't be able to compete in the long term. It wouldn't even be able to compete right now. The Milwaukee's costs were just way too high.

I question this point -- that the GN route has excess capacity today. Capacity is limited to the weakest point on the system. For today's ex-GN route one would be the Cascade Tunnel which is limited to 1 train per hour for tunnel ventilation. Looking at the Wenatchee AEI reader from Oct. 2-4, 20 trains went over Stevens Pass each day. Yesterday, 23 trains went over the pass. There doesn't appear to be much excess capacity. Also, this leads to the question of why did BN/BNSF reopen Stampede Pass if there is capacity on the ex-GN, not to mention the ex-SP&S along the Columbia.

And regarding the MILW's poor track conditions, I believe the attempts to merge with the CNW in the 1960s were to blame. The MILW reduced track maintenance funding in an attempt to boost the bottom line and increase their liquid assets so the company would look more attractive to CNW's shareholders. When the merger was rejected after 10 years of trying, the track structure was in need of much work. With the increased traffic from the BN merger conditions, the track was beaten to a pulp, which in turn, wrecked their ability to compete with BN or UP. Maybe Mike Sol could speak to this?

Brent

[Anonymous]

If the picture of the Milwaukee track at Hilldale south of Tacoma (link on the first posting of this topic) is indicative of their MOW travel must have been like Mr. Toad's Ride at Disneyland. Was this how the entire line was at the end?

[MichaelSol]

Regarding Milwaukee Road's looking at alternative routes. Milwaukee surveyors, after 1901, looked at every mountain pass between Lost Horse (south of Hamilton, Montana), and Mullan Pass (on the Montana-Idaho border north of Lookout Pass). I have in front of me the surveys of the Northern Pacific and Union Pacific over Lolo Pass, and descriptions of the Milwaukee surveys.

All three railroads looked very closely at the Lolo Pass/Lochsa River option. The Union Pacific survey shows a considerabe tunnel over Lolo attempting to make it feasible, as does Northern Pacific. NP went so far as to purchase the ROW easement, which still exists on property titles up Lolo Creek and still belongs to the BNSF.

Anyone familiar with the Idaho side of Lolo Pass will agree as to why none of the three railroads went that route. It is a box canyon. It has virtually no stable valley floor for 70 miles. The Lochsa River follows an extremely winding, tortuous path in its fast drop to the Clearwater. It would have entailed a 1.8-2.4% grade of nothing but excavation and bridges attempting to put a line down that canyon entailing an enormous amount of curvature alongside a river that, in the spring runoff, "owns" that valley.

On the map, the route looks interesting.

Three railroads looked at it. Three railroads went elsewhere.

Best regards, Michael Sol

[Anonymous]

I BOUGHT A SMALL HOUSE/CABIN IN RINGLING, MONTANA THAT ONCE WAS A LINE SHACK ON THE MILWAUKEE ROAD USED BY EMPLOYEES. MY WELL WAS USED BY THE MR TO WATER THE STEAM ENGINE SWITCHERS, I'M TOLD. THIS HAS AWAKENED AN INTEREST IN THE MR IN MONTANA. DOES ANYONE HAVE ANY OLD PICTURES OF THE MR IN RINGLING, MONTANA THAT THEY WOULD CARE TO SHARE?

[arbfbe]

More for Futuremodal

I have left a couple of your questions without answer. The Gateway cities made available as a result of the BN merger seemed like a good idea for the MILW. Robert Downing spoke at a recent GN or NP Historical convention to that very topic. He had a dollar figure for the additional revenues they expected the MILW to earn from these 11 new gateways. I do know that post merger the MILW added one train each way on the transcon line. It was obvious traffic went up. Without a doubt the MILW picked a poor route out of Portland. Tight curves and helper grades are not the way to make traffic pay the bottom line. I doubt trackage rights all the way from Spokane to Portland was ever considered. It might have been interesting if it had been asked for. Probably MILW management thought they were asking for the moon as it was and didn't ever expect the BN to agree so easily to the 11 gateways they asked for. In retrospect you could say the MILW asked too low a price for merger protection. They should have asked for far more so there was at least some negotiation and foot dragging by the BN. You know when you sell a used car or your house that if the first buyer takes the price you didn't ask enough.

Dieselization. The Mechanical Department pushed for that for years. The MILW had two factions, the Mechanical Department that controlled all the steam and diesel locomotives and the Electrification Department that controlled the substations, the trolley lines and the electric locomotives. You can imagine the Mechanical Department wanted ALL the locomotives under their control. Every time it looked like the electrics were gonners Lawrence Wylie and his team made them better locomotives. They could also point out they were paid for not like any new diesel purchase. The boxcabs were designed for 15 years service and ran for almost 60 years, 1914 - 1973. No diesel has ever survived that long in mainline service.

A diesel is just an electric locomotive that uses a diesel prime mover to get electricity rather than an overhead wire. It is a cheaper way to get an electric locomotive if the overhead lines have not been installed. The MILW lines were already in when dieselization happened but the mechanical department did not want to give the electrification department control over their purvey of locomotives. There is no reason that newer electrics could not have been built on the chassis of Alco/GE FAs, EMD SD9s or any other diesel chassis. 90% of the components an electric unit needs can be found on the diesel. You have to replace the prime mover with a transformer and resistance grids and you have what you need. There are AC and DC issues but those were solved long before the MILW needed to electrify. The GN opted for diesels account their electrification didn't go anywhere. There was simply too much swapping of locomotives and lineside maintenance for such a short haul when put up against the diesel's effeciency. Electricy handled all the MILW mainline freights on the Rocky Mountain and Coast divisions well into the 1960s when they were supplanted by GP9 diesels used to boost the electrics in the mountains. Purchase of enough diesels to replace the servicable electrics on the MILW would have cost more than the salvage from dismantling the electrification.

I have wondered what would have happened if someone on the MILW management team had the foresight in about 1970 to announce the MILW was going to become an intermodal powerhouse. No boxcar traffic would be accepted, Tide Flats Yard would be ripped out an turned into an intermodal terminal. This is exactly what happened after the MILW was gone, too bad they didn't get to it first. There is always that pesky problem of the common carrier obligatiions to contend with. Perhaps if SeaLand or a consortium of ocean shipping companies had bought the MILW and made it a private railroad land bridge it could have worked.

[espeefoamer]

At one time the Milwaukee and Rock Island were discussing a merger. If it had happened,would it have saved either,or both railroads?Would the lines be around today?

[arbfbe]

Martin,

Yes, that is the $64 question. From evidence that has been presented on other forums by Mr Sol and others MILW managers in the mid 1970's did exactly the opposite of what their own consultants told them to do. They cut off the profitable lines to focus on the money losers. As I said earlier any management in the 1970s could have done better.

Right now there is no physical way to rebuild the MILW mainline in too many places west of Terry, MT. BN management had the opportunity to acquire parts of the MILW where that row was superior to the old NP alignment and opted not to. Running time on the MRL between Missoula and St Regis is over two hours while the MILW could do it in about 75 minutes. MRL has to live with numerous 25 and 30 mph curves while the MILW line had passenger speeds of 60 and 70 mph along most of that route.

[martin.knoepfel]

If the long-haul business of the MILW subsidized its branch lines in the mid-west, why didn't they abandon these ones and keep the transcon running?

looking forward: would it be cheaper to rebuild the MILW instead of double-tracking the GN. (single track with long sidings is not equal to doble track.)

[MichaelSol]

Well, Milwaukee Road will remain controversial, if nothing else.

Milwaukee Road's decision to build out West was prompted by the desire of its owners, who also owned the Anaconda Copper Mining Co and its timber resource arm, to obtain reliable service from Butte, Montana to the midwest. While many people have opinions on the operating characteristics of the final transcontinental line, the fact is that every engineering study ever done was reflected in the ICC's determination in its Northern Lines Merger case that the Milwaukee Road's transcontinental operation had "superior grades and shorter mileage" than NP/GN/CBQ would have. Now, this was a conclusion made after testimony from the respective engineering departments of the railroads involved, and after review of that testimony by the FRA and ICC staff.

I will disagree with the proposition that the transcontinental line was a "high cost" operating proposition. To the contrary, every economic study ever done on the system showed that the Milwaukee's transcontinental operation was a very efficient operation, both from the standpoint of operating costs per mile of line, and from the standpoint of net contribution to the overall operating revenue of the Milwaukee Road as a system. After 1968, all net operating revenue earned by the Milwaukee Road as a system came from its transcontinental operation. In essence, it subsidized increasing losses on the Midwestern portions of the system. Between the time the Northern Lines Merger conditions, including the Billings and Portland entries, took full effect, and the filing of the Receivership Petition in December, 1977, the transcontinental operations contributed an additional $354,000,000 in gross revenue to the overall Milwaukee system as a direct result of and benefit from the merger conditions. Subtract that revenue from Milwaukee's earnings during that period, and it is transparent that as a Midwestern Railroad alone, Milwaukee would have been in receivership much, much earlier than it was. Only its strength as a transcontinental system kept it going for as long as it did.

Historically, the marginal costs per dollar of revenue of operation of the transcontinental portion of the Milwaukee system were approximately 65% of the marginal costs of operating the Midwestern portion of the system. It was able to accompli***his by being, in reality, what rail planners envisioned as an idealized kind of a rail system: the great bulk of traffic originated and terminated at the ends of the line, with very little handling in between.

Even at that, the idea that Milwaukee "missed" the big cities is an interesting one. Which ones?

A traveler on the GN in 1910 could rattle a long, long ways after leaving St. Paul before he encountered a real "city" in the form of Spokane, and then he had to wait until the Coast before he saw another one. Milwaukee in the meantime served the largest mineral producer between the Twin Cities and the Coast, passed through better agricultural land, accessed more forest products industries, and had a very high quality transcontinental traffic, even if the tonnage was smaller than its competitors.

Most western railroads missed having many population centers on their transcontinental systems because of the simple fact there weren't many such centers between the Mississippi River valley and the West Coast. What is interesting about discussions about Milwaukee is how they occur in a vacuum without acknowledging that other railroads out west had many of the same characteristics, they were neither unique to the Milwaukee nor "explain" any of Milwaukee's unique circumstances.

In general, Milwaukee got a lion's share of forest products traffic out west because of its particular location, and carried over twice the tonnage of Anaconda Copper Co shipments as either the GN or NP, because of its close relationship to that company. Milwaukee always had very good percentages of port traffic at Seattle and Tacoma, and most of that was transcontinental -- long haul.

Milwaukee had, in fact, looked closely at a mainline over Cadotte (not Rogers) Pass north of Helena, with the idea of finding a lower grade crossing of the Continental Divide than the crossing at Pipestone Pass. That mainline would have been Missoula to Melstone and shortened the existing line by about 150 miles and been able to offer a 1.0% westbound and 1.5% eastbound grade, although the survey engineer in charge suggested that, depending on traffic and how much the company wanted to invest, they could achieve something very similar to GN's crossing at Marias Pass, and being familiar with the project myself, it could have been possible to better the GN crossing. However, the economic and operating efficiency of the proposed electrification system exceeded the benefits that could be obtained by new construction and retaining steam power. The electrification system changed everything. Milwaukee could pull more tonnage at twice the speed up Pipestone as GN could move over Marias.

"Notwithstanding its superior grades and shorter route" the electrification permitted Milwaukee to multiply its advantages even further by decreasing its operating costs considerably compared to its competitors, while doubling line capacity compared to its competitors.

Best regards, Michael Sol

[arbfbe]

Rogers Pass and Electrification

It makes no sense to shorten the electrification to just the mountain grades. Why maintain two types of locomotives when the electrics work so much better in the Montana climate. Harlo as a division change, steam came off and the electrics came on. When electrification was established the MILW was able to close roundhouses in Three Forks and Alberton. That wouldn't have happened if steam had been required to make the runs to Piedmont and Haugan. Then the steamers would have been pulled through the mountains which would require a crew on the steamer, a crew on the electric and a crew on the electric helper. With electrification only two crews were needed. The first mistake was not electrifying the Gap on the Idaho Division between Avery and Othello. The second mistake was not upgrading the electrification in the 1960's more than they did. I would posit that the electrification made up for the steeper grades on the MILW over the GN. The operating costs (not the capital costs) were so much lower for the electrics compared to the steamers that the MILW was at least even with the GN and NP if not ahead. That remained true through the end of WWII when the other roads were able to electrify with diesels. Then the grades were a competitive factor. Milw did well by building bigger electrics when they lashed up three or four of the original boxcabs. On the MILW grades a four unit set of boxcabs was rated the same as a set of 4 F9s and higher than FTs. The MILW retired or reassigned a lot of steam engines when electrification was implemented. The electrics worked better in the winter and the MILW ran absolutely NO carloads of coal or oil to power the electrics.

Yes, the MILW could have built NW from Summatra to Winnet to Great Falls then Augusta over Rogers Pass and along the Blackfoot River to Missoula. Instead they went to Harlowtown bought the Montana Railroad which was completely abandoned through Sixteen Mile Canyon in favor of a higher grade and headed to Three Forks forcing a climb and drop into Butte. Why? Consider the populations of the Blackfoot, Gallatin and Clark Fork valleys. Down from Rogers Pass you can find Lincoln, Ovando and Helmville. Totalled, including itinerant loggers and you might find 3,000 souls there. Three Forks is the MILW entry into the Gallatin Valley Bozeman, alone had more population than the line along the Rogers Pass route. Then you have Three Forks Whitehall and other towns like Willow Creek and Cardwell that added to the population count. Once over the mountains you find Butte with a population measured in the tens of thousands, the figure of 65,000 comes to mind. Down the River there is Deer Lodge, Drummond and even Bearmouth. The combination of these communities had a population many times the population of the Blackfoot Valley.

What could you find for business along the Blackfoot Valley? Logs, lots of logs. Unfortunately, they all went the short distance to the Blackfoot Milling Company at Bonner where they were cut and milled. The logs were low revenue compared to the finished product and the MILW got both even if they didn't build over the Rogers Pass line. The area around Helmville and Ovando is rich agricultural land. Unfortunately, the winters come early and the snows are deep. The growing season is too short for much other than hay. Hay is rarely shipped very far so other than some live stock and logs there is little traffic on this line. On the other hand the Gallatin Valley is rich in grain production and livestock. The Deer Lodge Valley is also a live stock exporting area. The revenues from these two valleys are major revenue sources to the MiLW. Any operating costs from a better line across Roger Pass would be overwhelmed by the revenue loss by not building the mainline via Three Forks and Butte and Deer Lodge.

If you note in today's world, HWY 200 follows the Rogers Pass route and I-90 (old US 10) parallels the MILW line into Butte. That is where the traffic still is. HWY 200 has seen quite a bit of traffic growth of late, mostly grain trucks headed to Lewiston, ID from the Lewistown, MT area. Much of this grain went out of the territory on the MILW via Lewistown and Harlowtown. Yes, a line from Vaughn, MT over Rogers Pass would have made sense for the MILW but not as the main but as an alternative mainline to enable moving northern Montana grain economically to either Pacific Coast Ports, the Mississippi River or Great Lakes Ports, which ever market could give the farmer the best price.

[CSSHEGEWISCH]

As far as the C&NW/MILW merger is concerned, it fell through long before it got to the ICC. Originally, the MILW was to be absorbed into C&NW. The financial condition of the C&NW deteriorated and the merger proposal eventually turned into a proposal by the parent company to sell C&NW to MILW, which didn't happen.

[Anonymous]

QUOTE: Originally posted by jeaton

So, I gather that you are saying that if the Milwaukee Board of Directors had paid attention to you, one of the US Big Four would be The Chicago, Milwaukee, StPaul and UNION Pacific.

Nope, it would have been the Chicago, Milwaukee & Northwestern. Remember that CNW was one of the suitors for the retrenched Milwaukee before the prize was awarded to SOO and CNW was digested by UP. If Milwaukee had managed to stay healthy with the prescription of Dr. Futuremodal, a marriage of CNW and CMStP&P would have been logical and perfunctory. Of course, by now the Milwaukee & Northwestern may well have been swallowed up by UP itself, unless the butterfly effect of a CM&N creation somehow caused the STB to wake up and realize that the West needs at least three Class I's to foster true competition, not the pathetic duopoly we're stuck with now.

I can see it now: The Chicago, Milwaukee, Santa Fe & Northwestern (CMSF&N); The Burlington Southern Pacific (BSP); and good ol' Uncle Pete all by himself (but having digested WP, D&RGW, MP, RI and having been granted trackage rights on the I-5 corridor over the former SP). That lineup would allow all three Western Class I's to access all the major Pacific Coast ports.

We're all familiar with monopolies and duopolies, but who ever heard of a triopoly? Now, the only way we can get the necessary three Western rail competitors is with Open Access.

[jeaton]

So, I gather that you are saying that if the Milwaukee Board of Directors had paid attention to you, one of the US Big Four would be The Chicago, Milwaukee, StPaul and UNION Pacific.

[Anonymous]

Revisit things a few decades later. Take the electrification for example. Was it necessary to electrify as much as they did? Why start the electrification in Harlowtown when the "real" grades/curvature/tunnels didn't start until 150 miles to the west at Piedmont (the start of the 1.9% grade up Pipestone Pass)? Why continue the electrification past Butte all the way to St Paul Pass and Avery, when the electrification on this second segment could have been limited to a Haugen MT to Avery ID segment, eliminating another 220 miles of electrification over what is essentially a water level grade between Butte and Haugen?

If the electrification had been limited to Pipestone Pass, St Paul Pass, and maybe Snoqualmie Pass, they could have eliminated at least 370 miles of electrification. Then there is the Othello to Snoqualmie Pass segment. They had the 2.2% grade up the east side of the Saddle Mountains which had to be electrified. There was 45 miles of needless electrification from Othello to Columbia River crossing at Beverly Junction at the base of the Saddle Mountains. Wouldn't it have been cheaper to forego electrification of that segment and reconstruct the Saddle Mountain grade into a 1% grade to reduce operating costs?

Fast forward to 1970. The NP, GN, CB&Q, and SP&S are merging into BN. As a concession to Milwaukee, BN grants rights for Milwaukee into Portland from Milwaukee's end of track at Longview WA. Why didn't Milwaukee hold out for comprehensive competitive operating access to the entire I-5 corridor from Portland to Vancouver BC, and get direct eastern access into Portland over the North Bank of the Columbia? Why not hold out for access to the CP at Sweetgrass MT over BN's north-south line through Great Falls? If that had happened, the Milwaukee might have survived at least until a merger partner came along.

How about this: When diesels came along in the 1940's, why didn't Milwaukee completely dieselize and scrap the electrification in the 1950's (as GN did on it's Stevens Pass electrification), rather than keeping the electrification through the 1970's? How much money would they have saved then?!

Here's another "just miss". The Milwaukee retrenched in 1980. The double stack boom started about 1984. With Milwaukee's ready made double stack clearance in all it's tunnels (from the electrification days), it would have given Milwaukee a foot up on the competition had it been able to stay afloat for a measly 4 more years!

[arbfbe]

Here I thought we were talking about construction and locating the MILW pacific extension. Think the late, very late 1800's. The MILW was a very successful midwestern railroad system. Great Lakes ports to Kansas City (albiet the KC line was barely competitive, in good weather) grain lines into SD, Chicago, Twin Cities, KC, Omaha. New construction to increase revenue sources in the midwest was done. The railroads had already overbuilt in their back yards. The MILW as the C&NW, SOO LINE and CB&Q had two choices, stay in the midwest or build toward new traffic sources. The line to the Pacific was the best choice and all these roads, even the SOO had surveys and plans to do just that. The roads were almost all half way there. The Soo to Whitetail, MT, the CB&Q to Casper, WY and Sheridan, WY and the C&NW to Colony, WY and west from Chadron. The MILW had two lines ending at Rapid City and Mobridge, SD. The CB&Q got subverted by the Hill lines and opted to abandon plans to build against the UP and take a split of the traffic by connecting with the Hill Lines at Laurel. The C&NW ran out of money and was no where in the world to build to any established seaport. The SOO? Well they had to compete with the GN and the CP for border traffic or build below the GN and compete with both the GN and NP. The MILW was half way there with a good line through the grain belt and access to lots of potential farm land and some established industrial customers. Competition? They could scoff at competition. Small towns in Iowa had two, three and maybe four railroads competing for the traffic there. What is competing with the NP in nearly every town and the NP, GN and the UP in places like Miles City, Butte, Spokane, Tacoma and Seattle. This was hardly the level of competition the MILW already faced in the Midwest. Perhaps the new markets seemed like a respite to MILW managers. Managers are optimists. Naysayers and pessimists do not get to take the reins. So optimistically, Butte, Missoula, Miles City, Spokane, Othello all could no would be as big as St Paul or Chicago. Imagine a city that size and NO water outlet for traffic. It is the end of the 19th century and the beginning of the 20th. People and business are optimistic about the industrial age and the new markets the rapidly developing west and the Pacific Rim nations offer. The MILW board was not made up of stupid individuals. They face two choices, stagnate in the midwest competing with half a dozen railroads in each area or build into new markets. Building into new markets had worked well for the MILW as well as the other midwestern railroads for almost 50 years. It was a proven albiet expensive business method. The other thing about managers is they stay with the proven formula until it doesn't work any more and then they try it again just to prove it doesn't work any more. Reputations have been built by constructing new lines. If Hill, Gould and others got there by building into uncharted territories then maybe, no it WILL work for the current management.

So it looks like the MILW was destined to reach the Pacific. That is if they could raise the money. People running the banks are not stupid. The MILW raised the money from these bankers who saw merit in another railroad to the Coast. Afterall, the MILW had the best system in place to distribute goods from the new territories. The GN and NP didn't even get into Chicago. The CB&Q was coopted by the Hill Lines. The C&NW had a similar distribution but their jumping off points were already too far south for connections to Seattle and too far north for the California ports. Besides the C&NW and SOO Line were not the financial pillars the MILW was. The UP did not reach Chicago and had to haul all of that pacific traffic south to Omaha before it went north. So why shouldn't the MILW move to build a competitive route to Seattle, the premier port in the Northwest? It would be the newest line there substantially better engineered and built than the nearest competitior, the NP. The NP had sections where the tracks faced 25 mph curves. NP steel and iron bridges had to be strengthened or replaced, nearly as expensive as building new ones. Parelleling the NP line would be a better choice than paralleling the GN. NP certainly had more traffic centers than the GN that was still trying to grow theirs. West of Butte there was assorted traffic sources, west of Whitefi***here was some lumber and little else. The lower line was the best choice.

So I think the MILW made the right choices given the information they had and the future they faced. From then on things went down hill. Cost over runs probably doomed the future of the line and the entire railroad. Could different management made a difference? Probably but maybe not in a positive sense either. The line was built and then the MILW had little choice but to ride it out and they did competitively for40 or 50 years. Then management was not likely up to the task. Could a different management made a difference then? Undoubtedly! No way but for the better.

Alan

[jeaton]

I had a very short period of employment with The Milwaukee Road, about three weeks, back in 1962. After a couple of 16 hour days on the Morton Grove Patrol, and working the Horicon-Fond Du Lac run, I realized that the job would never allow me to continue any undergraduate college work.

The crews I worked with were very good to a greenhorn, and I mean green. While I had a couple of years experience on the Illinois Central's suburban line, that offered just about zero for as preparation for working freight. My training consisted of about an hour in a trainmaster's office, a couple of trips on passenger trains between Milwaukee and Chicago, and an hour or so classroom for PRR rules training and testing at Union Station. (I passed the test!!) Of course, that would do in the days when there were four others on the crew helping to keep you in one piece.

Needless to say, I wasn't there long enough to experience the "fun" stuff, like working in bad winter weather or experience the inevitable "close call" or worse. Never-the-less, had I stayed there, I think I would have had that pride that Mitch speaks of.

Jay