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Chicago & Northwestern Railroad

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Posted by bobwilcox on Thursday, October 6, 2005 3:26 PM
QUOTE: Originally posted by MP173

Bob:

Did you buy enough?

ed



No.
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Posted by Murphy Siding on Thursday, October 6, 2005 10:24 PM
QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by up829

QUOTE: Originally posted by Murphy Siding

I'm reading a good book called "The Tootin' Louie", a History of the Minneapolis & St. Louis Railway. I'm up to the part about Ben Heinneman-later to play a big part in the future of C&NW. From what I've read so far, he seems like one tough hombre. Was he good for the C&NW?


In the early years, he was very good for the Northwestern, but he was also an empire builder and deal maker. He wanted to merge the C&NW, Milw, and RI into one large midwestern railroad, well before the BN merger or the UP went after the RI. There was an aborted merger with the Milw and although he managed to torpedo UP's acquisition of the RI, afterwards IMO he became more interested in Northwest Industries, C&NW's parent and holding company for a number of diversified companies. The railroad went into decline, there were no buyers, and it was spun off to the employees.


Thanks to Larry Provo the empoyees who bought stock made a great deal of money. I can always tell if someone worked for the Northwestern at this time if they can answer this question correctly without any further information : Did you buy enough? Answer : no.


What did Larry Provo do for the railroad and employees?

Thanks


IMHO Larry Provo was the strongest CEO the C&NW had in the Post War period. Without him the CNW would have gone the way of the MILW and CRIP. He got the railroad focused toward the future which meant getting rid of the losses on comuter service, getting rid of the branchlines and getting in bed with the UP. He put together a very good set of managers including Jim Wolfe and Ed Burkhart. In the process some of us made a lot of money.


Did he go on to work for UP,or retire? I can't say I've heard his name before, unless the CNW yard in Chicago is named after him? Provo Yard?

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Posted by bobwilcox on Friday, October 7, 2005 7:30 AM
QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by bobwilcox

QUOTE: Originally posted by up829

QUOTE: Originally posted by Murphy Siding

I'm reading a good book called "The Tootin' Louie", a History of the Minneapolis & St. Louis Railway. I'm up to the part about Ben Heinneman-later to play a big part in the future of C&NW. From what I've read so far, he seems like one tough hombre. Was he good for the C&NW?


In the early years, he was very good for the Northwestern, but he was also an empire builder and deal maker. He wanted to merge the C&NW, Milw, and RI into one large midwestern railroad, well before the BN merger or the UP went after the RI. There was an aborted merger with the Milw and although he managed to torpedo UP's acquisition of the RI, afterwards IMO he became more interested in Northwest Industries, C&NW's parent and holding company for a number of diversified companies. The railroad went into decline, there were no buyers, and it was spun off to the employees.


Thanks to Larry Provo the empoyees who bought stock made a great deal of money. I can always tell if someone worked for the Northwestern at this time if they can answer this question correctly without any further information : Did you buy enough? Answer : no.


What did Larry Provo do for the railroad and employees?

Thanks


IMHO Larry Provo was the strongest CEO the C&NW had in the Post War period. Without him the CNW would have gone the way of the MILW and CRIP. He got the railroad focused toward the future which meant getting rid of the losses on comuter service, getting rid of the branchlines and getting in bed with the UP. He put together a very good set of managers including Jim Wolfe and Ed Burkhart. In the process some of us made a lot of money.


Did he go on to work for UP,or retire? I can't say I've heard his name before, unless the CNW yard in Chicago is named after him? Provo Yard?


The yard is named Proviso or Beautiful Proviso to some. Larry Provo died in the 1970s after a very short bought with lung cancer. He was succeded by Jim Wolfe who also died of cancer.
Bob
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Posted by Murphy Siding on Saturday, October 8, 2005 1:42 PM
Who, or what was Proviso Yard named after?

Thanks

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Posted by Anonymous on Saturday, October 8, 2005 3:45 PM
Don't know who/what Proviso was named for but it was openned in 1929. I googled it looking for some more but found nothing right off hand other than what the definition of proviso is-- "A clause in a document making a qualification, condition, or restriction." I don't think thats it.
Although their is a neighborhood/township called Proviso in the Maywood area around the yard.
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Posted by Anonymous on Saturday, October 8, 2005 11:25 PM
It is located in Proviso township so I suppose it was named after that.

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Posted by Bob-Fryml on Sunday, October 9, 2005 3:01 PM
A friend of mine who hired-on in train service with the C.& N.W. in Marshalltown, Iowa back in the late 1960s told me that one of the first rumors he heard was, "It's only a matter of time before Union Pacfic takes us over." That happened officially in 1995.

In 1972 the C.& N.W. went "Employee Owned." Financially, during the four or five years of employee ownership, the railroad lived pretty much a hand-to-mouth existence and worked extremely hard to bring whatever pennies it could to the bottom line. When the railroad went into the power market it largely purchased second hand units. Rail and crosstie replacements were abysmally low. But here's the amazing part: a $10,000 investment on the day the company went "Employee Owned" was worth a cool million the day the company went public again. Given the generally mediocre condition of the property and all of the moribund branchlines the company was saddled with, to my way of thinking there is no way on God's green earth that any rational person could accept that the value of C.& N.W. stock could increase a hundred fold in such a short period of time. If there was ever an example of irrational exuberance, this was it!

As to why the U.P. waited so long to merge, a previous contributor to this thread expressed the right idea: too many money losing branchlines. Had U.P. grabbed the railroad before the Interstate Commerce Commission liberalized its abandonment formulas, the politics of abandoning those lines would have been hysterical. Hundreds of communities and many dozens of shippers would have righteously insisted that "Certainly a rich and powerful railroad like Union Pacific can afford to keep our branch line going." Multiply that kind of pleading by dozens of highly-taxed, light-railed, worn-tied, inadequately-bridged subdivisions and industrial leads, and it's no wonder that Uncle Pete held off.

Question for Bob Wilcox. In the last two or three years of its independence I seem to recall that the C.& N.W. acted as a sub-contractor of sorts for Union Pacific with respect to a series of Chicago - Council Bluffs high-speed container/trailer trains. The trains moved on a Chicago - West Coast tariff that specified Union Pacific the entire way. Union Pacific set the schedules and U.P. officers at Wood Street (?) managed the terminal operation for these trains. Just exactly what was the arrangement and how did it work?
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Posted by bobwilcox on Sunday, October 9, 2005 3:08 PM
QUOTE: Originally posted by Bob-Fryml

A friend of mine who hired-on in train service with the C.& N.W. in Marshalltown, Iowa back in the late 1960s told me that one of the first rumors he heard was, "It's only a matter of time before Union Pacfic takes us over." That happened officially in 1995.

In 1972 the C.& N.W. went "Employee Owned." Financially, during the four or five years of employee ownership, the railroad lived pretty much a hand-to-mouth existence and worked extremely hard to bring whatever pennies it could to the bottom line. When the railroad went into the power market it largely purchased second hand units. Rail and crosstie replacements were abysmally low. But here's the amazing part: a $10,000 investment on the day the company went "Employee Owned" was worth a cool million the day the company went public again. Given the generally mediocre condition of the property and all of the moribund branchlines the company was saddled with, to my way of thinking there is no way on God's green earth that any rational person could accept that the value of C.& N.W. stock could increase a hundred fold in such a short period of time. If there was ever an example of irrational exuberance, this was it!

As to why the U.P. waited so long to merge, a previous contributor to this thread expressed the right idea: too many money losing branchlines. Had U.P. grabbed the railroad before the Interstate Commerce Commission liberalized its abandonment formulas, the politics of abandoning those lines would have been hysterical. Hundreds of communities and many dozens of shippers would have righteously insisted that "Certainly a rich and powerful railroad like Union Pacific can afford to keep our branch line going." Multiply that kind of pleading by dozens of highly-taxed, light-railed, worn-tied, inadequately-bridged subdivisions and industrial leads, and it's no wonder that Uncle Pete held off.

Question for Bob Wilcox. In the last two or three years of its independence I seem to recall that the C.& N.W. acted as a sub-contractor of sorts for Union Pacific with respect to a series of Chicago - Council Bluffs high-speed container/trailer trains. The trains moved on a Chicago - West Coast tariff that specified Union Pacific the entire way. Union Pacific set the schedules and U.P. officers at Wood Street (?) managed the terminal operation for these trains. Just exactly what was the arrangement and how did it work?


I left the Northwestern in 1982 and never worked in Intermodal. However, I did the marketing on soda ash. The Northwestern gave their rate making power of attorney to the UP after the Iowa Lines (BN, CNW and IC) had crashed their portion of the revenue to their marginal costs post Staggers. The did not have a poa from the BN or IC.
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Posted by Anonymous on Sunday, October 9, 2005 3:33 PM
QUOTE: Originally posted by Bob-Fryml
In 1972 the C.& N.W. went "Employee Owned." Financially, during the four or five years of employee ownership, the railroad lived pretty much a hand-to-mouth existence and worked extremely hard to bring whatever pennies it could to the bottom line. When the railroad went into the power market it largely purchased second hand units. Rail and crosstie replacements were abysmally low. But here's the amazing part: a $10,000 investment on the day the company went "Employee Owned" was worth a cool million the day the company went public again. Given the generally mediocre condition of the property and all of the moribund branchlines the company was saddled with, to my way of thinking there is no way on God's green earth that any rational person could accept that the value of C.& N.W. stock could increase a hundred fold in such a short period of time. If there was ever an example of irrational exuberance, this was it!

The stock in the original "employee ownerership" was split the first time as a 60-to-1 deal, meaning that everyone that invested in the first offering made $60 for every $1 invested. Many officials (and a few in operating) invested very heavily at the beginning; there were many rumors that certain "elite" officials and their freinds were privy to insider information, and knew the split would likely happen. Many became millionares overnight.

The second split was, if memory serves, a 4-to-1 split; I believe there was another split, but I am not sure.

When word got out about the $$$ made by the officials (while the operating and other departments were working with bubblegum and string trying to hold the place together), employee morale went so low as to actually go into negative numbers.

BTW-I'm kidding about the negative numbers, but not about the rest.
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Posted by bobwilcox on Sunday, October 9, 2005 4:31 PM
I don't think the potental was such a secret. However, it was obvious from the porpectus the company was very levraged (95/5 debt to equity).

When the prospectus for the IPO came out I asked Merrell Lynch their opinion. They offered to loan me an amount equal to my annual salary if I would pay them an interest rate equal to two points over prime and pledge the stock as collateral. I wish I had borrowed up to the maximum but hindsight is 20/20.

Also, we in the Marketing Department knew the revenue forecast for the next year was agressive but realistic. We knew from our fellows in the Operating Department the expense forecast was realistic if we brought in the traffic. Revenue and cost budgets at the Northwestern were a very serious affair with career consequinces if you missed by more than 2% without a plan to close the gap.
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Posted by Murphy Siding on Sunday, October 16, 2005 10:50 PM
I just finished the book "The Northwestern" by Roger Grant. It appears that both Heineman and Provo were strong, aggresive leaders. It sounds like Heineman was a real fireball. Ironically, CNW had considered buying UP in the 1890's,when UP's fortunes were down, and CNW's were up. That would have been interesting. Do you think CNW would have kept those American flag stickers clean?[;)]

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Posted by Chris30 on Monday, October 17, 2005 9:33 AM
"The Northwestern" by Roger Grant. Excellent book. Roger Grant is a very good author and I have read several of his books.

CC
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Posted by Murphy Siding on Monday, October 17, 2005 12:19 PM
QUOTE: Originally posted by Chris30

"The Northwestern" by Roger Grant. Excellent book. Roger Grant is a very good author and I have read several of his books.

CC


I agree [:)]. What else has he written?

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Posted by Chris30 on Tuesday, October 18, 2005 10:27 AM
Roger Grant books that I have read are the Northwestern, The Corn Belt Route (Chicago Great Western) and a book on the Erie / Erie-Lackawana. I think that there are a few more.

CC
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Posted by Murphy Siding on Tuesday, October 18, 2005 12:50 PM
QUOTE: Originally posted by Chris30

Roger Grant books that I have read are the Northwestern, The Corn Belt Route (Chicago Great Western) and a book on the Erie / Erie-Lackawana. I think that there are a few more.

CC


Thanks. Just added those to my list of books to find.[:)]

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Posted by Anonymous on Tuesday, October 18, 2005 1:21 PM
Grant's book on the Eire/ EL makes for some good reading.
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Posted by Murphy Siding on Tuesday, October 18, 2005 9:52 PM
What was the CNW 's biggest legacy that it left to UP, and to American railroading in general?

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Posted by nanaimo73 on Wednesday, October 19, 2005 1:38 AM
Is the train control system still in place across Iowa, and is there still a different system on the UP proper further west ?
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Posted by spbed on Wednesday, October 19, 2005 8:04 AM
The ICC wanted competition in the basin so they picked the CNW since they had the "cowboy" line in Wyoming. At 1st the CNW was to extend the "cowboy line. Then the UPRR said they would build a connector to accept the coal trains & CNW being strapped for $$$$ accepted less revenue to have the coal routed CNW then UPRR then CNW again in eastern Nebraska.

I know this cause I was doing biz with CNW at the time I was told to buy CNW stock since once the announcement was made CNW would go higher. Today I am a very happy fellow for that decision. [:o)][:)]

Originally posted by Murphy Siding

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Posted by Murphy Siding on Wednesday, October 19, 2005 12:27 PM
QUOTE: Originally posted by spbed

The ICC wanted competition in the basin so they picked the CNW since they had the "cowboy" line in Wyoming. At 1st the CNW was to extend the "cowboy line. Then the UPRR said they would build a connector to accept the coal trains & CNW being strapped for $$$$ accepted less revenue to have the coal routed CNW then UPRR then CNW again in eastern Nebraska.

I know this cause I was doing biz with CNW at the time I was told to buy CNW stock since once the announcement was made CNW would go higher. Today I am a very happy fellow for that decision. [:o)][:)]

Originally posted by Murphy Siding



I've read this a couple times of on this message board, that *The Government* asked CNW to go into the Powder River Basin. I've yet to see it in any book though. (?) Logically, why wouldn't the ICC have asked a railroad with stronger financial standing to do it? Especially, if one could be allready found in Wyoming? (UP)?

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Posted by spbed on Wednesday, October 19, 2005 12:44 PM
I'm just giving you the story. You would have ask the ICC why they chose CNW over UPRR. It maybe the data base for ICC does not go back that far but it was in the mid 70s & I guess you can go to a Chicago library & go thru the archives & I am sure you will find it. Maybe you can archive one of the Chicago newspaper for that era also. Something like that that was a life changing experience as I wrote you you tend to remember. I also remember one of the CNW VPs bought himself a ring that would make a SB ring look small. I still even remember that person name[:p][:)]

Originally posted by Murphy Siding

Originally posted by spbed

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Posted by daveklepper on Wednesday, October 19, 2005 12:46 PM
Because they were afraid that Up was already too powerful. I think this was during a Democratic Administration, also, and despite Averal Harriman having served a Democratic President (Truman) the UP has generally identified with the Rps., if my memory is correct.
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Posted by spbed on Wednesday, October 19, 2005 12:47 PM
In the ICC eyes I would suspect/guess due to CNW ownership of the"cowboy" line which was also in Wyoming the ICC considered them a "Wyoming" carrier like the UPRR. [:o)][:p]

Originally posted by Murphy Siding

Originally posted by spbed
[

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Posted by daveklepper on Wednesday, October 19, 2005 12:57 PM
Proviso Yard's name had little to do with Larry Provo and predated his top job. It was simply a contracton of the words "provisions" or "providing", that this was to be the yard that would provide America with a large amount of goods by handling a whale of a percentage of the nation's freight.

Heineman streamlined that commuter operations and drastically reduced its operating costs by dieselization, largely made possible by transferring diesels from long distance and country plug passsenger services that he fought (successfully) to discontinue, and by double deck coaches and push pull cab cars which cut some 60% of terminal costs. At the same time this presented a slick new image for the Chicago financial types that commuted on the Northwestern trains. The demise of the C&AE and CNS&M interurubans added more business of course and compensated for the loss of bussiness from the express highway system. He tried to maintain that he actually had a positive cash flow from the commuter business, the only railroad in the USA that could make that statement, but of course this discounted the depreciation of stations and part of the right-of-way.
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Posted by zardoz on Wednesday, October 19, 2005 1:01 PM
QUOTE: Originally posted by Murphy Siding

What was the CNW 's biggest legacy that it left to UP, and to American railroading in general?

The mystery of why they operated left-handed.
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Posted by spbed on Wednesday, October 19, 2005 1:11 PM
Well supposely that mystery was solved some time ago something do with ice at the passenger stations. You do know that the Cajon pass trains operate exactly the same way as the CNW trains used to?. [:o)][:p]

Originally posted by zardoz

Originally posted by Murphy Siding

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Posted by wctransfer on Wednesday, October 19, 2005 3:21 PM
Well, i have always liked the CNW, and just wondering if people want to talk abotut the CNW in St. Paul? Also, just food for thought, what was your favorite paintscheme the CNW had. I liked the regular ones, like on the SD40-2's and GP40's.

Alec
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Posted by jeffhergert on Wednesday, October 19, 2005 4:23 PM
QUOTE: Originally posted by zardoz

QUOTE: Originally posted by Murphy Siding

What was the CNW 's biggest legacy that it left to UP, and to American railroading in general?

The mystery of why they operated left-handed.


I acquired some old CNW employee system time tables recently. Reading thru some of them I came across a few short stretches of double track where it stated, "Trains will keep to the right." I'd have to go look, but I think it was on the line in Wisconsin near Altoona.
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Posted by Murphy Siding on Thursday, October 20, 2005 7:11 AM
QUOTE: Originally posted by spbed

The ICC wanted competition in the basin so they picked the CNW since they had the "cowboy" line in Wyoming. At 1st the CNW was to extend the "cowboy line. Then the UPRR said they would build a connector to accept the coal trains & CNW being strapped for $$$$ accepted less revenue to have the coal routed CNW then UPRR then CNW again in eastern Nebraska.

I know this cause I was doing biz with CNW at the time I was told to buy CNW stock since once the announcement was made CNW would go higher. Today I am a very happy fellow for that decision. [:o)][:)]

Originally posted by Murphy Siding



I'm not doubting what you say. I'm just wondering why this isn't in any books about CNW?. Wouldn't CNW want the world to know that Uncle Sam begged them to go into PRB?

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Posted by Anonymous on Thursday, October 20, 2005 7:44 AM
With respect to lefthand operation on the CNW I believe the story goes like this. Early on when they were single track the railroad built the depots to one side of the tracks. On the Milwaukee, and Wisconsin Divisions it was on the "compass" east side. On the Galena it was "compass" north side. When commuter service had to be increased to the point that double track was required, the only place to put that second track was of course on the side where the depot buildings weren't. The railroad decided to run the trains with the inbound trains on the "Left hand" side so commuters awaiting the arrival of their train would have the benifit of a depot building, thus the left handed operation throughout the system. However, up in Wisconsin where trains operated over subsidiary Chicago, Minneapolis, St Paul and Omaha, trains were operated "Right-handed."
It used to be an old story that the railroad was owned by the English causing the unusual operation.

Mitch

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