BN merger

[zidane]

Was the BN merger a merger of equals or did the GN buy the NP and then with their combined stock in the CB&Q, merge the Q into the already combined GN NP system. When the merger happened, was the NP bankrupt?
If any GN fans read this: who controlled the GN, James Hill or J.P. Morgan? I always thought it was James Hill, but I have heard it suggested that J.P. Morgan was the mover behind the scenes for the GN.
Thank you.

[Anonymous]

I suppose you could call it a merger of equals.The Burlington Northern merger combined the Great Northern,Northern Pacific,Chicago Burlington & Quincy and Spokane Portland & Seattle railways into one company.The SP&S was originally leased by BN,then officially merged into the system in the early 1980's,even tho it's equipment was repainted as tho it was wholly owned.

The original idea of the combined systems was tried between the GN and NP after Hill and his associates gained control of the NP after the Panic of 1893.Then was tried again in 1901 after GN and NP gained equal control of the CB&Q.The BN merger of March 2,1970 was begun in 1955 and was to be known as the Great Northern Pacific as the GN and NP were the main partners of the system,then the CB&Q wanted in on being recognised as an equal in the merger and the name stretched to the Great Northern Pacific & Burlington Lines.Then in 1968 the advertising firm of Lippincott & Margulies(the same firm that revamped Rocky and gave us the beautiful GN Big Sky Blue scheme) came up with the Burlington Northern name inspired by the Chicago Burlington & Northern that CB&Q used to gain access to the Twin Cities.

More later.

Bill B
Iowa

[JimValle]

There is some question as to the relative quality of the NP and the GN in pre-merger days. The NP was built by Henry Villard and partners to secure federal land grants. It was surveyed and built as cheaply and rapidly as possible and once it reached the Pacific Coast there had to be a lot of rebuilding and realigning and it was never considered a really good plant. The GN was built later by the Hill-Morgan interests. It was better engineered and more carefully put together. The two roads were roughly parallel and served the same Northwestern region of the country so combining them constituted a monopoly threat in the old days. In BN days the old GN right-of-way was the favored route and some of the NP mainline was mothballed so, to some extent, I'd say they were not "equals"

[Anonymous]

James Hill built and owned/ran GN, in answer to your question about that.

[Anonymous]

Jim made some good points about the GN and NP.However,I don't believe J.P.Morgan came into the picture until the 1901 purchase of the CB&Q and formation of the Northern Securities.The original associates that purchased the St.Paul & Pacific and expanded it into the St.Paul,Minneapolis & Manitoba and then the Great Northern were James J.Hill,Norman Kittson,Donald Smith,and George Stephen.George Stephen was the Vice President of the Bank of Montreal where most of the financing came from to purchase,rebuild,and expand the St.Paul & Pacific along with Kennedy(first name escapes me) of New York who lined up Dutch investors.
Also,GN was built better than the NP,but still had some realignment work done,tho not to the extent the NP needed.Witness the first and second Cascade tunnels,the Columbia Falls to Jennings(later Stryker to Jennings due to the Libby dam project of 1966-70)relocation from Haskell Pass,Spotted Robe Montana realignment,and Chumstick Washington realignment to name the major ones.

Have a good one.

Bill B
Iowa

[mudchicken]

Lest you forget, CB&Q brought C&S + FW&D+QA&P into the merger with them. They controlled both railroads from 1908 onwards, owning two-thirds of the stock in each. Otherwise all that coal goes Denver to Texas by some other route. Had the Wyoming coal boom hit 10 years later, BN would not have been there to reap the rewards.

Frank Overton's books (long out of print) make an interesting read on C&S/FW&D/CB&Q's evolution.

[Anonymous]

I know this was not part of the original question, but what about the BN and the ATSF merger. Was that a merger of equals? Or did one of them just outright purchase the other? [?]

[Anonymous]

I know that I worked on The S P & S when I was young and it was a well built and well run railroad under the family management and when the NP took over it went downhill in a hurry!!! and what a great river level route it is!!!

[trainfan1221]

I always would have liked to see what the SP&S could have done if they lasted, seemed like an interesting little railroad.

[dmoore74]

QUOTE: Originally posted by mudchicken

Lest you forget, CB&Q brought C&S + FW&D+QA&P into the merger with them. They controlled both railroads from 1908 onwards, owning two-thirds of the stock in each. Otherwise all that coal goes Denver to Texas by some other route. Had the Wyoming coal boom hit 10 years later, BN would not have been there to reap the rewards.

Frank Overton's books (long out of print) make an interesting read on C&S/FW&D/CB&Q's evolution.

QA&P was part of the Frisco, not the CB&Q. It did become part of BN after BN merged the Frisco.

[Anonymous]

The CB&Q was used for to Fluff up the NP Balance Sheet by Shorthauling NP and then giving most of the Traffic to BN.

[slsfrr]

QA&P was owned by the Frisco. Maybe you meant Burlington/Rock Island joint line. (Dallas to Houston)

[lwolohon]

I don't think that this was a merger of equals. The GN under James Hill in about 1903 tried to merge the NP, CB&Q & GN under the Northern Securtities. Which was later broken up by the Justice Department. After that the GN & NP were at least friendlyl competitors. The GN had the better route after the opening of the Cascade Tunnel in 1929. The GN crossed the Rockies, Marias Pass, & the Cascades, Stevens Pass on the lowest & most direct routes. After the BN merger the Ex GN route became the preferred route. Some of the ex NP route was mothballed, but the ex GN route couldn't handle all the traffic, so the mothballed ex NP was reopened still with the ex GN the preferred route.

James Hill was affiliated with J.P. Morgan, but Hill ran the GN.

[eastside]

QUOTE: Originally posted by zidane

Was the BN merger a merger of equals or did the GN buy the NP and then with their combined stock in the CB&Q, merge the Q into the already combined GN NP system.

In investment banking, there are two types of mergers. In a purchase of assets the acquiror purchases the acquiree, usually with some combination of the acquiror's stock and cash. This is a takeover. In pooling-of-interests the stock of the merging firms is pooled and shares are issued for the new entity. Usually this happens with firms that are about the same size. Even if the firms differ greatly in size, technically speaking, it's considered a merger of equals, though it sometimes happens that the executives of the smaller firm get a disproportionate share of positions. The BN and GN merger, I believe, was of the second type.

QUOTE: Originally posted by lrenee

I know this was not part of the original question, but what about the BN and the ATSF merger. Was that a merger of equals? Or did one of them just outright purchase the other? [?]

In that merger, announced in 1994, the BN purchased the ATSF. ATSF was the minnow in the pond at that time.

[jimrice4449]

I'm not really into the financial end of RRing but it was my understanding that the CB&Q and SP&S were both jointly owned by the NP and GN, which, were each owned by the same investors. Fear of that old bugaboo, monopoly, led to the requirement that all the RRs be operated as independent companies even though they were all tied together financially. This led to such inefficiencies as the GN handing over Portland cars to the SP&S in Spokane while the NP interchanged at Pasco and on the eastbound moves the NP handling the traffic to Scribner (about 5 miles west of Spokane) and the SP&S having to call a daily Scribner turn which presented the lucky railfan w/ a mainline movement powered by a Challenger running in reverse one way.
The merger permitted a rationalization of operating procedures and elimination of many duplicate facilities (some of which had to be un-eliminated later).

[jrbernier]

The GN was the financial strong man at the time of the merger. The GN controlled the NP, and the GN/NP controlled the CB&Q and SP&S. The GN has great land holdings(lumber) and a lock on Pacific Rim export/import business by controlling a lot of the rail access in Seattle. The NP sort of controlled the Auburn/Tacoma area, and the Milwaukee slipped into Tacoma in the Tide Flats area. What the NP had was great land grants that would later play into BN's control of the low sulfer coal business.
The 1970 merger allowed merchandise traffic to be routed on the 'preferred route' across Montana(ex-GN), and the NP mainline became the 'coal route' as the coal traffic boom hit. The interesting thing was that the CB&Q was larger than either of the controlling roads(GN/NP). I worked for the 'Q' back in the late 60's and we always got the new engines after the GN/NP got theirs(SD45's). We always knew who was in control, and many times we would see officials 'learn' on the 'Q' before they went on to bigger jobs on the GN/NP(Lou Menk for one).

Jim

[Anonymous]

The ATSF and BN merger was actually a purchase, with BN being the buyer. But, the result was actually the opposite. In buying the Santa Fe, BN was actually targeting acquisition of Santa Fe's management (Rob Krebs) as well as the physical plant. Santa Fe had proven itself to be one of the best in finding ways to run efficiently, especially in the intermodal arena. The combined company saw the mass pulling of golden rip-cords by former BN top officials, and the subsequent filling of many of the vacated positions by Santa Fe people.

[chad thomas]

And back when the BN was trying to buy the SF the UP launched a hostile takeover bid and drove the price of the SF up. I don't think UP had any real intentions of aquireing the SF but they knew they would end up getting the SP and that was another way stick it to the competition.

[ValorStorm]

QUOTE: Originally posted by JimValle

In BN days the old GN right-of-way was the favored route and some of the NP mainline was mothballed so, to some extent, I'd say they were not "equals"

Remember that all of the original NP mainline is intact and is still mainline. The "Funnel" in North Idaho is all Northern Pacific. The roughly parallel former GN in this area is mostly abandoned. What little of it that is still operated isn't mainline track.