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Montana Coal and the Milwaukee Road

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Posted by arbfbe on Tuesday, September 20, 2005 1:50 AM
QUOTE: Originally posted by nanaimo73

Originally posted by futuremodal
. They managed to grab the Montana Central from J.J.Hill which took them from Harlowton (mile 1335) to Lombard (mile 1430).

This site has a lot of interesting maps from the 1800's http://memory.loc.gov/ammem/gmdhtml/rrhtml/rrhome.html




OOPS, but no. The Montana Central ran from Pacific Jct just west of Havre to Great Falls, Helena, Boulder and Butte in Montana. Jim Hill kept control of that line and the GN operated it until after the BN merger. What the MILW did get control of was the Montana Railroad which ran from Lewistown to Harlotown to Lombard. and a connection with the NP. The CM&PS abandoned most of the line through 16 mile canyon and rebuilt at a higher level.
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Posted by nanaimo73 on Tuesday, September 20, 2005 1:19 AM
QUOTE: Originally posted by futuremodal
I have also wondered whether it was deemed necessary to utilize the Twin Cities as part of the PCE, or if the planners ever considered bypassing the Twin Cities, instead shooting straight WNW out of Chicago or Milwaukee? If the latter, then the lines through the southern tier of South Dakota would have been favorably located for being part of a PCE.


Once the CMSP&P decided to head to Puget Sound, I am sure they wanted as much on line business as they could get. Passengers as well as freight.
They had a mainline in place from Chicago through Milwaukee to Minneapolis taking them to Cedar at mile 423 which did not need upgrading. From Cedar the line continued to Evarts at mile 802 which would need upgrading but was in place. They managed to grab the Montana Central from J.J.Hill which took them from Harlowton (mile 1335) to Lombard (mile 1430).

This site has a lot of interesting maps from the 1800's http://memory.loc.gov/ammem/gmdhtml/rrhtml/rrhome.html

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Posted by arbfbe on Tuesday, September 20, 2005 12:16 AM
QUOTE: Originally posted by Mark_W._Hemphill

QUOTE: Originally posted by arbfbe

Certainly the coal deposits are larger than just the Powder River Basin fields and indeed continue on north into Canada. Some of those areas straddling the MILW mainline could have been developed with the MILW becoming a major hauler to the upper midwest. Montana early on passed a coal severance tax to cushion itself against the boom and bust cycle of meneral production as well as to insure abandoned mines would be reclaimed when the wealth had been removed. The hard rock mining industry has left a long history of just walking away from toxic mine and mill sites leaving the state with tens of millions of dollars in work to do to make these sites safe again. Wyoming has not elected to impose this tax and their coal is more competitive in energy markets than Montana coal. This could have been a problem with coal along the MILW tracks.


Al: It would be interesting to see just how much this burdens the Montana PRB coal vs. Wyoming PRB coal on a delivered BTU basis.


The best comparison at the moment is between the mines at Colstrip, MT and Kuehn, MT. The Colstrip mines were once owned by Montana Power and had to pay the into the Coal Severance Trust Fund. The mine at Kuehn is owned by the Crow Tribe and had to pay into the Coal Severance Trust Fund until they won their case in the courts exempting them from the state tax. The mine at Kuehn which was barely competitive with Colstrip when both were getting hooked suddenly become very popular with the consumers when they could sell their product without adding the tax. There is no place on either line to meet trains except at the mines. On the Kuehn line there is usually an empty train waiting at the balloon track switch for the load to finish and get ready to depart. That allows about 3 loaded trains per day and it has been that way since the mine became tax exempt.

The coal severance tax is probably a good thing for the state but it does kink the competitiveness curve with the Crow Nation and the state of Wyoming.
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Posted by Murphy Siding on Monday, September 19, 2005 8:15 PM
I would think that the time of the PCE planning, Minneapolis was allready an important rail center for the Milwaukee Road. Only logical to include it in the grand scheme.

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Posted by Anonymous on Monday, September 19, 2005 6:35 PM
QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by nanaimo73

I would guess the C&NW would have been granted trackage rights from Minneapolis and joint ownership would have started at Aberdeen, where the C&NW had a line up from Huron ( I don't know if it was there in 1905).
Would Michael know ?

Bentonite area
http://terraserver.microsoft.com/image.aspx?t=2&s=14&x=177&y=1552&z=13&w
Terminal
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=708&Y=6210&W
The bend in the river
http://terraserver.microsoft.com/image.aspx?T=1&S=14&Z=13&X=172&Y=1554&W
Thing
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=653&Y=6171&W



nanaimo73 has that right.


Thanks, guys. I have also wondered whether it was deemed necessary to utilize the Twin Cities as part of the PCE, or if the planners ever considered bypassing the Twin Cities, instead shooting straight WNW out of Chicago or Milwaukee? If the latter, then the lines through the southern tier of South Dakota would have been favorably located for being part of a PCE.
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Posted by Murphy Siding on Sunday, September 18, 2005 9:12 PM
QUOTE: Originally posted by nanaimo73

I would guess the C&NW would have been granted trackage rights from Minneapolis and joint ownership would have started at Aberdeen, where the C&NW had a line up from Huron ( I don't know if it was there in 1905).
Would Michael know ?

Bentonite area
http://terraserver.microsoft.com/image.aspx?t=2&s=14&x=177&y=1552&z=13&w
Terminal
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=708&Y=6210&W
The bend in the river
http://terraserver.microsoft.com/image.aspx?T=1&S=14&Z=13&X=172&Y=1554&W
Thing
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=653&Y=6171&W



nanaimo73 has that right.

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Posted by Murphy Siding on Sunday, September 18, 2005 9:10 PM
QUOTE: Originally posted by bobwilcox

The bentonite mines were not on the Northwestern. The stuff was trucked to Belle Fouche and loaded into rail cars at that location.


I'd have to disagree with you. As of two years ago, the lines still go all the way to Colony for bentonite. Look on terraserver. The topo map shows the lines as CNW. The Milwaukee, at one time trucked bentonite to Rapid City to load on rails-at Murphy Siding![:D]

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Posted by nanaimo73 on Sunday, September 18, 2005 8:39 PM
I would guess the C&NW would have been granted trackage rights from Minneapolis and joint ownership would have started at Aberdeen, where the C&NW had a line up from Huron ( I don't know if it was there in 1905).
Would Michael know ?

Bentonite area
http://terraserver.microsoft.com/image.aspx?t=2&s=14&x=177&y=1552&z=13&w
Terminal
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=708&Y=6210&W
The bend in the river
http://terraserver.microsoft.com/image.aspx?T=1&S=14&Z=13&X=172&Y=1554&W
Thing
http://terraserver.microsoft.com/image.aspx?T=1&S=12&Z=13&X=653&Y=6171&W
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Posted by Anonymous on Sunday, September 18, 2005 8:26 PM
Murphy and nanaimo - If I have this straight, it is both your opinions that if the PCE had been a joint project of CNW and CM&StP, the line still would have started at Mobridge rather than somewhere in SW SD? If so, in your opinion(s) how would the CNW have connected to the Mobridge route?
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Posted by bobwilcox on Sunday, September 18, 2005 7:31 PM
The bentonite mines were not on the Northwestern. The stuff was trucked to Belle Fouche and loaded into rail cars at that location.
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Posted by Murphy Siding on Sunday, September 18, 2005 7:09 PM
QUOTE: Originally posted by nanaimo73

The C&NW was pushing west through Wyoming at the time to link up with the Central Pacific and had reached the eastern approaches to South Pass at Lander in 1906.
The line from Belle Fourche to Colony was not built until 1948.
There was a railroad called the Wyoming and Missouri River RR with ran from Belle Fourche 20 miles west to Aladdin, Wyoming from 1898 until 1927.
I believe the CMSP&P wanted to go through Butte using the Montrana Railroad (Lombard-Harlowton-Lewiston) and going through Rapid City would have been out of the way.


[:I] Imagine the surprise, in 1948 when bentonite is discovered in Wyoming! Right there by the main line too![;)]

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Posted by nanaimo73 on Sunday, September 18, 2005 6:27 PM
The C&NW was pushing west through Wyoming at the time to link up with the Central Pacific and had reached the eastern approaches to South Pass at Lander in 1906.
The line from Belle Fourche to Colony was not built until 1948.
There was a railroad called the Wyoming and Missouri River RR with ran from Belle Fourche 20 miles west to Aladdin, Wyoming from 1898 until 1927.
I believe the CMSP&P wanted to go through Butte using the Montrana Railroad (Lombard-Harlowton-Lewiston) and going through Rapid City would have been out of the way.
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Posted by Murphy Siding on Sunday, September 18, 2005 6:14 PM
QUOTE: Originally posted by futuremodal

Is the Belle Fourche southwest of Colony inaccessable to a water level grade? Is it in a steep twisting canyon, or something like that which would make it extremely difficult to build a rail line using early 1900's construction methods?


I checked this out-to see if my memory was still working. (It is![:)]). From Colony, the Belle Fourche River goes (or comes from, actually) somewhat southwest toward Morecroft,WYO. This goes through a very rugged area of the northern Black Hills. The river, in a lot of places is at the bottom of rocky canyons. The canyons are filled side to side with river, or depending on rainfall that year, river and silt. Many places are as squirrely as a pigtail. So, in general, I'd have to say no, on routing the PCE down to the PRB. Had the Milwaukee started the PCE at Colony, I think they would have headed due west/northwest, hitting the mountains at about the same place. That they decided to start at what is now Mobridge,S.D., leads me to believe that this was thought to be a better route. It's also on about the same latitude as Minneapolis. The Rapid City line would have put them further south.

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Posted by MichaelSol on Sunday, September 18, 2005 4:48 PM
Preserving the Miles City Gateway never made any sense. I remain convinced that it was more a matter of breaking down the political opposition. South Dakota wouldn't holler and scream if they thought MILW was going to preserve service through the state, so during the Lines West abandonment proceedings, the opposition was reduced to as few states as possible by offering that MILW "intended" to preserve service east of Miles City.

Insofar as traffic, with the shutdown of Lines West, MILW lost 9-11 MGT of high revenue freight over that line, reducing it to about 2.5 MGT of mostly coal and wheat actually generated on-line at Miles City and points east. Yet, they knew very well that in order to continue hauling the coal, they would have to invest heavily in new ballast, ties, and welded rail; those coal unit trains were tearing that jointed track apart.

Rebuilding was justified if the track was carrying 12-14 MGT of high revenue as it was before, but not at less than 3 MGT.

I doubt that the Ortonville/Miles City line was ever seriously considered as a viable line after the 1980 Lines West shutdown. I can't imagine that GTW had any reason to see it differently.

Best regards, Michael Sol
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Posted by nanaimo73 on Sunday, September 18, 2005 2:38 PM
Michael,
The CMSP&P embargoed their line west of Miles City on February 29, 1980 and pulled back on March 15th. In mid-March the ICC rejected the Milwaukee II reorganization plan which included the mainline from Ortonville to Miles City and branches to New England, North Dakota and Sisseton, South Dakota. The Milwaukee Road filed to abandon their track west of Ortonville during the middle of 1981 after they were unable to get federal funds to fix the line (page 13, 8-81 Trains). During November of 1981 officials from the Grand Trunk Corporation toured the system. The Ortonville to Terry line was sold to South Dakota in early 1982 for $37,700,000. On May 24th, 1982 the Milwaukee Road announced a letter of intent with GTC to transfer its stock ownership for $250,000,000 of assumed debt. This would lead me to believe the GTC could have had the line to Miles City but did not want it. Would you agree ?
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Posted by MichaelSol on Sunday, September 18, 2005 1:34 PM
Interestingly, in 1977 or so, the largest single investor in the Milwaukee Road since William Rockefeller, Odyssey Partners, purchased its stake based upon the perception of its senior partner, former Oppenheimer Funds Partner Leon Levy, that coal was going to be the significant commodity of the future, given the oil shock, the direction of oil prices, and the abundance of coal in the United States.

Levy was the kind of guy that could follow up on his research by calling up somebody like James Schlesinger, then Secretary of the Department of Energy. Schlesinger agreed with Levy that coal was in for a significant upsurge in development and use, and more importantly, that this held tremendous significance for America's then-moribund freight rail industry.

Levy inquired further, and found that from the perspective of the Department of Energy, one of the railroads that would benefit most, because of its strategic location atop and near several major coal fields in the Central and Western United States was ... the Milwaukee Road.

Levy flew to Chicago and met with Company accountants and basically, "looked things over." He saw a railroad with a big future as a going concern, that it could sell its enormous real estate assets and internally finance rebuilding and renovation of the system.

Oddyssey Partners then acquired nearly half of the outstanding shares of CMC, the holding company of the Milwaukee Road.

Best regards, Michael Sol
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Posted by Anonymous on Sunday, September 18, 2005 12:23 PM
QUOTE: Originally posted by Murphy Siding

I'll do some research on that. Also,consider that DM&E now has the line into Colony. I've never seen anything to suggest that DM&E thought it was an easy way into the PRB


Actually, I spoke with a guy named Anderson from DM&E a while back in an inquiry as to why DM&E chose to approach the PRB from the south (via a longer line in terms of all new construction) rather than approaching from the Colony area. He stated that indeed DM&E did analyze both routes, but decided on the southern route due to its proximity to higher quality PRB coal. A more northerly entrance (in addition to eventually tapping down into the southern PRB fields) would have also opened up the northern Wyoming and Montana PRB fields for easier development, but the coal there is of lower quality and has a higher sodium content. Since the southern PRB is their goal, the southern line is the most direct.

However, don't count out more RR construction into Montana's PRB just yet, as coal demand is exceeding expectations, and if national energy policy maintains it's preference for coal over the long run, even the Montana fields will have enough national value to justify such infrastructure expenditures.

So even though DM&E did seriously consider a Belle Fourche (I assume a northern DM&E route would have followed the Belle Fourche), that doesn't answer the question of whether CNW or a joint CNW/CM&StP line west of the South Dakota - Wyoming border would have gone that way or headed northwest toward Miles City.
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Posted by Murphy Siding on Sunday, September 18, 2005 12:04 PM
I'll do some research on that. Also,consider that DM&E now has the line into Colony. I've never seen anything to suggest that DM&E thought it was an easy way into the PRB

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Posted by Anonymous on Sunday, September 18, 2005 11:56 AM
Is the Belle Fourche southwest of Colony inaccessable to a water level grade? Is it in a steep twisting canyon, or something like that which would make it extremely difficult to build a rail line using early 1900's construction methods?
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Posted by Murphy Siding on Sunday, September 18, 2005 11:48 AM
Dave: You're correct on the geography, but you'd have to see how hilly yhe area is to understand. That might be part of the reason that CNW ended at Colony?

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Posted by Anonymous on Sunday, September 18, 2005 11:19 AM
QUOTE: Originally posted by Murphy Siding

Dave: I believe the Milwaukee ended at Chamberlain, on the Missouri River at the time-big river/no bridge. Evarts was a place a few miles south of what became Mobridge, where the Milwaukee had the same situation-big river/no bridge. At the time, I think CNW went all the way up to Belle Fourche, S.D., maybe all the way to the bentonite mine at Colony, Wyoming. It's doubtfull that the PCE would have taken off from western S.D., skirted the Black Hills and headed west to Gillette Wyoming. The countryside from the S.D. / WY state line is rugged, big,rolling hills. It would difficult to build a line there now. 100 years ago, it would have been darn near impossible. I-90, west of Sundance, WY has hills so steep as to be difficult for cars and trucks to climb! A railroad there then, or now would be unlikely.


According to my atlas, the Belle Fourche river and the original CNW line paralleled each other heading northwest to Colony, wherein the CNW ended and the Belle Fourche turns to the southwest into the PRB within 20 miles of Gillette. The ex -CB&Q (BNSF) line runs west/northwest through Moorcroft on to Gillette. Moorcroft is on the Belle Fourche. So it should have been relatively easy to run a rail line from just north of the Black Hills into the PRB near Gillette by simply following the Belle Fourche river. Then it could have easily paralleled the CB&Q on into the Billings MT area.

If the CNW line to Colony existed at the time of the Milwaukee PCE startup, and if Rockefeller had somehow managed to make the PCE a joint effort between Milwaukee and CNW, logic says they would have started the joint PCE from whichever railroad had the farthest westward extension already.

I do wonder whether such a line would have headed west/southwest into northern Wyoming, or whether it would have headed northwest into Montana and Miles City. The original alignment of U.S. Highway 212 at one time headed north/northwest into MIles City rather than it's current alignment heading due west to the Crow Reservation. I know that sometimes highway planners from the early 1900's used old railroad surveys (if not actually parallel to railroads) to plot the alignment of the original U.S. Highway system, and I wonder if the highway 212 planners had used a survey of a CNW line to Miles City as their basis for the original 212 alignment.
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Posted by nanaimo73 on Sunday, September 18, 2005 9:11 AM
Back on page 1 arbfbe mentioned the Tongue River Railroad. It appears to me this project is dead. Here is some reading for anyone interested.
http://www.epa.gov/fedrgstr/EPA-IMPACT/2003/August/Day-22/i21550.htm
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Posted by bobwilcox on Sunday, September 18, 2005 3:34 AM
The C&NW had thought about building west from Lander, WY to hook up somewhere with the SP. When the Big Four sold the SP to Harriman that idea would no longer fly becuase it was presumed Harriman was not interested in shorthauling the UP.
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Posted by Murphy Siding on Saturday, September 17, 2005 9:53 PM
Dave: I believe the Milwaukee ended at Chamberlain, on the Missouri River at the time-big river/no bridge. Evarts was a place a few miles south of what became Mobridge, where the Milwaukee had the same situation-big river/no bridge. At the time, I think CNW went all the way up to Belle Fourche, S.D., maybe all the way to the bentonite mine at Colony, Wyoming. It's doubtfull that the PCE would have taken off from western S.D., skirted the Black Hills and headed west to Gillette Wyoming. The countryside from the S.D. / WY state line is rugged, big,rolling hills. It would difficult to build a line there now. 100 years ago, it would have been darn near impossible. I-90, west of Sundance, WY has hills so steep as to be difficult for cars and trucks to climb! A railroad there then, or now would be unlikely.

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Posted by Anonymous on Saturday, September 17, 2005 1:38 PM
QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by futuremodal

On another one of those "may have already been answered some time ago" questions, I have read where one of the MIlwaukee's board members (a guy named Rockefeller) had pushed for the original PCE project to be a joint effort between the Milwaukee and CNW. At the time of the onset of Milwaukee's PCE construction, what was the farthest westward extent of the CNW line through South Dakota, and would a joint venture have necessitated a more southerly starting point in southwestern SD? If so, wouldn't that have put a CMStP&P/CNW PCE right through the northern portion of Wyoming's PRB?

The Milwaukee had undertaken tentative exploration surveys, in 1900, for a line to either San Francisco, Portland, or the Puget Sound. In 1901, Milwaukee Chairman Roswell Miller and the new President of the Milwaukee, Albert Earling, had agreed to dispatch surveyors west to determine the costs of building a transcontinental line to the coast, using the Northern Pacific as a model.

Board member William Rockefeller allegedly believed that the Milwaukee should build to the southwest, toward California. Earling and Miller were cool to that idea, believing that, because of its location, Seattle was destined to become the premier shipping port on the coast, simply because it was closest to the Orient and Alaska. There may be some doubt expressed about Rockefeller’s desire to built southwest. Rogers and Rockefeller were in the process of completing their buyout of the Anaconda copper properties in Butte in 1901, and as early as April of that year, Rockefeller voted to authorize a railroad survey from Evarts to Butte, and an alternative survey route from Chamberlain, through Deadwood, to Butte. No Minutes of the Milwaukee Board of Directors suggested construction to California.

These railroad surveys were authorized a matter of days after the Northern Securities dust-up had failed to secure control of the Northern Pacific.

However, E.H. Harriman and the Milwaukee then entered into a joint-use contract of the Union Pacific system. This would have allowed the Milwaukee Road to run its own passenger and freight trains over Union Pacific lines to the coast. The contract, dated October 7, 1902, was between the Milwaukee and the Union Pacific, Southern Pacific, Oregon Short Line, and the Oregon Railroad & Navigation Company. It opened up the Milwaukee’s passenger and freight traffic through Omaha and Kansas City, “granting to this company the option of through car service for both passengers and freight; agreeing that the service shall be equal in all respects to the highest class if similar service conducted by either of the parties jointly with any other connecting carrier; that the rates of charge for transportation service, and the facilities employed and provided for the purpose of soliciting, carrying and delivering traffic, and the means used to advertise the through line shall be equal in all respects to those made by either of the parties."

However, this agreement, quite novel for its time, proved unsatisfactory to Miller. He had a tremendous distrust of Harriman, and within three weeks of the agreement, observed that "everything depended upon the good faith of the Union Pacific road, in carrying out the contract." Two weeks after that, he had apparently concluded that the Union Pacific could not be trusted to honor its agreement. A quarter of a century later, Percy Rockefeller, William's son, told the Interstate Commerce Commission that he did not believe that "the Union Pacific ever quite played fair with the St. Paul in that connection."

In 1904, the Company purchased land for terminal facilities in Tacoma and Seattle. The dissolution of the Northern Securities Company seemed to provide an opportunity to again acquire control of the Northern Pacific, but the U.S. Supreme Court approved a Morgan plan of stock distribution which effectively stymied any possibility of control or even influence. This opinion was handed down in March, 1905 and published during the first part of April, 1905. As a result, on April 27, 1905, the Board of Directors appointed a committee consisting of Peter Geddes, H.H. Rogers and Roswell Miller to acquire the right of way for the “Pacific Extension.” Rogers was a Standard Oil officer, and President of the Anaconda Copper Mining Co.. Geddes was a Director of the Union Pacific.

The Pacific Railway Co., a Milwaukee subsidiary, was already building facilities in the Tacoma area, and was directed to complete construction of its Tacoma terminal facilities and Puget Sound rail lines.

In July, 1905, Rockefeller discussed with W. K. Vanderbilt of the Chicago & Northwestern the prospects of a joint line to the coast. After the Milwaukee's experience with the Union Pacific, Miller was not favorable to joint operations.
On November 4, 1905, Miller advised Earling that Rockefeller had finally agreed with Miller's view, and that arrangements for construction should commence. This wasn't true; Rockefeller was still in discussions with Vanderbilt. The Milwaukee Board, under Miller's influence and Rockefeller's absence in Europe, approved the construction of the Pacific Extension.

Rockefeller was pretty much paying for the project out of his own pocket, which he did, but he clearly had wanted to share the burden with another railroad, and also gain the benefits of joint transcontinental traffic. He could see that the CBQ/GN/NP tie-up was backwards. The then-relatively thin traffic on the transcontinentals was shared with the midwestern line, and the transcontinental traffic generated by the midwestern line split between the two parents. What made more sense was two midwestern carriers operating a transcontinental line. Each would contribute to the transcontinental traffic making a much healthier transcontinental system. That's what Rockefeller was attempting.

Advised of Miller's actions, Rockefeller blew a gasket and threatened to fire Miller as Chairman. But, the project was underway.

William Rockefeller was the co-founder, with his brother John D., of the Standard Oil Company.

Best regards, Michael Sol



Thanks again, Michael. None of the railfan-type history texts have that level of detail.

I know where Chamberlain is, so that must be where the farthest westward extent of the Milwaukee truncated at the time, but where is Evarts? What was the farthest westward extent of the CNW at the time?

If I understand correctly, that would have made the PCE joint effort starting point somewhere in SW South Dakota (Wall? Rapid City?), then skirting the Black Hills to the north (I doubt they would have followed through on a Deadwood routing through the Black Hills), following roughly the later course of U.S. Highway 14 through Gillette WY (and there's your PRB coal connection), then parallel to CB&Q to Billings, then northwest to the Musselshell valley where it would take on the course of the PCE route eventually chosen.

Rockefeller seems like a pretty smart guy (smarter than JJ) to have envisioned the better consolidation of Midwestern traffic onto one transcon. It's too bad they didn't take his advice, or we'd still be seeing Orange (and green?) through the Idaho Panhandle.

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Posted by Anonymous on Saturday, September 17, 2005 1:19 PM
Regarding DM&E, I see things swinging in their favor. BNSF and UP have shown that they cannot keep up with coal delivery demands, future power generation clearly favors coal over natural gas and "renewables", and the recent spike in energy prices has forced the feds to consider more options for ensuring adequate supplies.

Most energy analysts now see that an abortion of the DM&E project would have negative implications for future power supply capabilities.
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Posted by Murphy Siding on Saturday, September 17, 2005 12:18 PM
QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by PNWRMNM

Bob,

Why is that?

Mac


I assume it it because lenders don't think it is a good business risk. It has been some time since the STB gave the DM&E a regulatory green light. I'm sure the DM&E has given Power Point presentations all over the world but still no financing.

Looking back before 1920 the habit of every railroad in the area rushing to a new mineral discovery was usually a disaster. Each new entry would come in, cut prices and every one would go broke. A classic example was Leadville, CO with three railroads. This was why railroads were advocates for requiring a showing of Public Convenience and Necessity in the Transportation Act of 1920. They wanted to stop "runinous competition" from too many rail carriers. The abandoment side of the same coin came to the fore with the rise of highway competition.



I will agree with Bob on this. I just don't the numbers work to get financing.

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Posted by MichaelSol on Saturday, September 17, 2005 10:40 AM
QUOTE: Originally posted by futuremodal

On another one of those "may have already been answered some time ago" questions, I have read where one of the MIlwaukee's board members (a guy named Rockefeller) had pushed for the original PCE project to be a joint effort between the Milwaukee and CNW. At the time of the onset of Milwaukee's PCE construction, what was the farthest westward extent of the CNW line through South Dakota, and would a joint venture have necessitated a more southerly starting point in southwestern SD? If so, wouldn't that have put a CMStP&P/CNW PCE right through the northern portion of Wyoming's PRB?

The Milwaukee had undertaken tentative exploration surveys, in 1900, for a line to either San Francisco, Portland, or the Puget Sound. In 1901, Milwaukee Chairman Roswell Miller and the new President of the Milwaukee, Albert Earling, had agreed to dispatch surveyors west to determine the costs of building a transcontinental line to the coast, using the Northern Pacific as a model.

Board member William Rockefeller allegedly believed that the Milwaukee should build to the southwest, toward California. Earling and Miller were cool to that idea, believing that, because of its location, Seattle was destined to become the premier shipping port on the coast, simply because it was closest to the Orient and Alaska. There may be some doubt expressed about Rockefeller’s desire to built southwest. Rogers and Rockefeller were in the process of completing their buyout of the Anaconda copper properties in Butte in 1901, and as early as April of that year, Rockefeller voted to authorize a railroad survey from Evarts to Butte, and an alternative survey route from Chamberlain, through Deadwood, to Butte. No Minutes of the Milwaukee Board of Directors suggested construction to California.

These railroad surveys were authorized a matter of days after the Northern Securities dust-up had failed to secure control of the Northern Pacific.

However, E.H. Harriman and the Milwaukee then entered into a joint-use contract of the Union Pacific system. This would have allowed the Milwaukee Road to run its own passenger and freight trains over Union Pacific lines to the coast. The contract, dated October 7, 1902, was between the Milwaukee and the Union Pacific, Southern Pacific, Oregon Short Line, and the Oregon Railroad & Navigation Company. It opened up the Milwaukee’s passenger and freight traffic through Omaha and Kansas City, “granting to this company the option of through car service for both passengers and freight; agreeing that the service shall be equal in all respects to the highest class if similar service conducted by either of the parties jointly with any other connecting carrier; that the rates of charge for transportation service, and the facilities employed and provided for the purpose of soliciting, carrying and delivering traffic, and the means used to advertise the through line shall be equal in all respects to those made by either of the parties."

However, this agreement, quite novel for its time, proved unsatisfactory to Miller. He had a tremendous distrust of Harriman, and within three weeks of the agreement, observed that "everything depended upon the good faith of the Union Pacific road, in carrying out the contract." Two weeks after that, he had apparently concluded that the Union Pacific could not be trusted to honor its agreement. A quarter of a century later, Percy Rockefeller, William's son, told the Interstate Commerce Commission that he did not believe that "the Union Pacific ever quite played fair with the St. Paul in that connection."

In 1904, the Company purchased land for terminal facilities in Tacoma and Seattle. The dissolution of the Northern Securities Company seemed to provide an opportunity to again acquire control of the Northern Pacific, but the U.S. Supreme Court approved a Morgan plan of stock distribution which effectively stymied any possibility of control or even influence. This opinion was handed down in March, 1905 and published during the first part of April, 1905. As a result, on April 27, 1905, the Board of Directors appointed a committee consisting of Peter Geddes, H.H. Rogers and Roswell Miller to acquire the right of way for the “Pacific Extension.” Rogers was a Standard Oil officer, and President of the Anaconda Copper Mining Co.. Geddes was a Director of the Union Pacific.

The Pacific Railway Co., a Milwaukee subsidiary, was already building facilities in the Tacoma area, and was directed to complete construction of its Tacoma terminal facilities and Puget Sound rail lines.

In July, 1905, Rockefeller discussed with W. K. Vanderbilt of the Chicago & Northwestern the prospects of a joint line to the coast. After the Milwaukee's experience with the Union Pacific, Miller was not favorable to joint operations.
On November 4, 1905, Miller advised Earling that Rockefeller had finally agreed with Miller's view, and that arrangements for construction should commence. This wasn't true; Rockefeller was still in discussions with Vanderbilt. The Milwaukee Board, under Miller's influence and Rockefeller's absence in Europe, approved the construction of the Pacific Extension.

Rockefeller was pretty much paying for the project out of his own pocket, which he did, but he clearly had wanted to share the burden with another railroad, and also gain the benefits of joint transcontinental traffic. He could see that the CBQ/GN/NP tie-up was backwards. The then-relatively thin traffic on the transcontinentals was shared with the midwestern line, and the transcontinental traffic generated by the midwestern line split between the two parents. What made more sense was two midwestern carriers operating a transcontinental line. Each would contribute to the transcontinental traffic making a much healthier transcontinental system. That's what Rockefeller was attempting.

Advised of Miller's actions, Rockefeller blew a gasket and threatened to fire Miller as Chairman. But, the project was underway.

William Rockefeller was the co-founder, with his brother John D., of the Standard Oil Company.

Best regards, Michael Sol
  • Member since
    December 2001
  • From: Crozet, VA
  • 1,049 posts
Posted by bobwilcox on Saturday, September 17, 2005 10:17 AM
QUOTE: Originally posted by PNWRMNM

Bob,

Why is that?

Mac


I assume it it because lenders don't think it is a good business risk. It has been some time since the STB gave the DM&E a regulatory green light. I'm sure the DM&E has given Power Point presentations all over the world but still no financing.

Looking back before 1920 the habit of every railroad in the area rushing to a new mineral discovery was usually a disaster. Each new entry would come in, cut prices and every one would go broke. A classic example was Leadville, CO with three railroads. This was why railroads were advocates for requiring a showing of Public Convenience and Necessity in the Transportation Act of 1920. They wanted to stop "runinous competition" from too many rail carriers. The abandoment side of the same coin came to the fore with the rise of highway competition.
Bob
  • Member since
    May 2003
  • From: US
  • 2,593 posts
Posted by PNWRMNM on Saturday, September 17, 2005 8:11 AM
Bob,

Why is that?

Mac

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