What if the Milwaukee Road didn't de-energize the Pacific Extension

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Another "what if"....the Rock Island merged with the Rio Grande and Western Pacific? Instead of a 'CZ', we could have had a 'CR' or "California Rocket"...
On second thought...that combination would have been buried by the UP+C&NW or MILW, so....never mind...
 
Another "what if"....the Rock Island merged with the Rio Grande and Western Pacific? Instead of a 'CZ', we could have had a 'CR' or "California Rocket"...
On second thought...that combination would have been buried by the UP+C&NW or MILW, so....never mind...
But then if you threw the MILW into the mix you could have the CRH! California Rocket Hiawatha! *Grin*
 
My point is, that to the management of the Rock Island and Milwaukee Road, any merger wouldn’t do, only a merger with the Union Pacific would do (although the Milwaukee would have accepted BN). They were blinded to any other possibility that would have made some business sense. The Rock Island, Milwaukee Road, and Chicago & Northwestern were in a war of attrition with each other to become the UP's route to Chicago. Only one of them needed to survive to give the Union Pacific direct access to Chicago and the Northwestern was the one that survived long enough to be the one. The other two were sold for parts and the Pacific Extension wasn't needed by BN at the time, thus it's loss. If the Rock Island had picked a different partner to merge with, like the SP, it would have (hopefully) been a wake up call to the Mikwaukee Road's management that they should pursue other options, but that never came to pass.

This to me is also a very sad point. That the two dying railroads that had links between Chicago and Omaha saw that link as they only thing worth saving of themselves. The Rock Island for example not only met the SP in New Mexico, but it also cross with it or the Cotton Belt in Texas, Louisiana, Arkansas and Missouri, but none of those links were seen as valuable as their connection to the Overland Route at Omaha. In the context of the Milwaukee, whether or not the Pacific Extension was worth anything to them or anyone else was irrelevant, they only saw their connection at Omaha as worth anything. And from the sounds of it, a BN merger was just an easy way to put them out of their misery.
 
But then if you threw the MILW into the mix you could have the CRH! California Rocket Hiawatha! *Grin*
Ha ha...
There actually was a “Zephyr Rocket” joint operation between St. Louis and St.Paul...😎
The Burlington and Rock Island also ran thru trains between Ft. Worth and Houston
 
So, we agree. Much of the Milwaukee Road route should have been kept by a nationalized operation. I have said that a proper "USRA" operation would have combined the NP and Milwaukee to get the best bits of each, and scrapped the GN.

I don’t agree on other’s speculation. We have no idea about a “nationalized operation” or anything else that hasn’t actually happened. But in the realm of reality and privately-run railroads, we know that superior operating characteristic (grade, curvature, on-line business, supporting routes, etc.) do matter and that’s why the GN route was the clear choice for the primary transcontinental route across the Northern Tier, and why the Milwaukee Road is gone.

I'll make a point you may not appreciate because of your myopic focus on for-profit freight operation: when passenger routes are designed, grades are much less of a worry. Curves are much more of a worry, of course. The same is true with light freight, which again, you weren't thinking about in the 1980s because you'd lost all the business to trucks.

The primary worry for a passenger route, however, is actual access to cities. And for most freight routes, this is also the primary issue.

The NP route and the Milwaukee Road route both have pros and cons in different places, with the NP route arguably being better. (The NP route, of course, was downgraded and mothballed in parts.) They both actually stop in cities on the way, though.

The GN route has no intermediate points. (OK, fine. Grand Forks.) It's fundamentally a "flyover" route. And that makes it fundamentally a *bad route*. (Yes, it probably has the best Rockies pass. This is why NP's Rockies pass was abandoned. But that's a small part of the route.)

The NP’s “Rockies Pass” never was abandoned. Mullan Pass is still in use. Service over Homestake Pass is discontinued, but it is not abandoned. The NP operated passenger trains over both, but the Homestake Pass route was never designed to be anything but secondary. You know not of what you speak.

With regard to freight traffic, all of Northern Idaho, Montana, Wyoming, and the Dakotas are “flyover” country. In general, it matters not a lot what cities are accessed in these states. The main purpose of the railroad in these states is to get shipments from the real major population centers (none of which are in those states) to the West Coast and vice versa. Therefore, the Great Northern route is primary conduit for such traffic. Freight traffic doesn’t care whether it’s passing through Havre or Billings – it just wants to get across Montana, which is the fourth-largest state, but just recently cracked a population of a million.

The ex-GN route across North Dakota has more online business than the ex-NP route. In Montana, 90+% of the shuttle grain facilities are on ex-GN trackage. On the ex-NP route, Montana Rail Link operates the equivalent of about one train daily each way to handle its local business between Billings, Laurel and Missoula, including the BNSF interchange at Garrison. West of Missoula, except for a local and the gas local, traffic is such that it’s handled on BNSF run-through trains. The vast majority of traffic on this route today are cars that just want to get across Montana.

Freight routes matter for passenger trains in the United States because outside the Northeast Corridor and a few other short segments, passenger trains rely on freight train infrastructure being available. The history of Amtrak is rife with instances of trains being rerouted or discontinued because freight traffic was insufficient or the line was being abandoned.

Your contention that the GN route is “bad” as a passenger route is not born out by history or reality. From near the end of WWII to the beginning of Amtrak, GN always offered the faster service, the greater frequency, the superior amenities and was the primary route for mail and express – never the NP or Milwaukee. Early on, part of this was the demand to just get across states like Montana and North Dakota the fastest way possible. But GN solidified is status as the primary passenger carrier with its feeder network to Vancouver, BC, Winnipeg, and Duluth, where GN trains were always the most-frequent and featured the best onboard service. This carried over to Amtrak, where 50 years ago this month, the GN route (mostly) was chosen for the lone Chicago-Seattle train due to higher existing ridership. For most of the past 30+ years, the Empire Builder (on the ex-GN route, primarily) has been Amtrak’s most-ridden long distance train. Of course, there has been no corresponding train on the ex-NP or ex-MILW route through the Dakotas and Montana to compare it with, but the mere fact that the Empire Builder is better patronized than other routes (all of which serve a larger on-line population) suggests that no other route between Chicago and Seattle/Portland could guarantee better patronage.

The Empire Builder shows that on-line population is not the sole determiner in ridership. Lack of alternate transportation, direct access to a major national park, reliability in an area with severe weather, and historical usage by online communities all play a role. The ex-NP route has bus and air service, and is paralleled by an Interstate highway. It serves more online population in Montana to be sure (again, that’s largely irrelevant), but fares poorly against even the non-air competition. The bus is 5 hours faster than the last NP North Coast Limited (on a schedule that could not even be replicated today), and driving is 9 hours faster. The Milwaukee Road route was completely “bad.” Its population base in South Dakota was less than the GN or NP, and west of there, it had little exclusivity in service (in 1970, for instance, the Milwaukee exclusively served only three communities with more than 3,000 people west of Mobridge, SD…and two of those were on branch lines. West of Miles City, its route was even slower than the longer NP. No wonder its passenger train service went away (west of Deer Lodge) in 1961, and no wonder how the whole railroad did the same 19 years later with few negative effects.
 
The survival of the GN route is a *historical accident*, due to short-term thinking and very specific oddities in the business environment at the time the Milwaukee was being scrapped and the NP downgraded -- specifically, the fact that nearly all business had been steered to trucks by government policy, and railroads were taking the scraps of the heaviest and slowest traffic, and were also abandoning most of the short hauls even on that traffic -- and the company which owned it made it their priority because it was the route the management had started out on -- BN management was GN management.

Fact check:
President and CEO: Louis Menk, off the NP
Vice President and later CEO: Norman Lorentzen, off the NP
President, Resources Division, C. Robert Binger off the NP

The reality is that top management was shared by the GN and NP and other positions from all the predecessor roads. While many GN routes were indeed used as the primary routes of the merged company, superior operating characteristics clearly show the “why.” It also shows why NP terminal facilities such as in Portland, Spokane, Minneapolis, and Duluth were used in preference to that of the GN.

Another complete fabrication.

It's not a route which actually supports anything much in the states it passes through, though. It's left BNSF in a funny position, begging governments for handouts to upgrade a route which doesn't provide much local service. It usually gets the handouts.

More complete fabrication. BNSF has asked NOTHING for line upgrades. Period. In stark contrast to supporters of plans to revive the failed Milwaukee Road in the late 70s, wanting the state and federal governments to pitch in millions for a physical plant that couldn’t support itself. Historically speaking, the GN route has received by far the least “handouts” of any. The UP and NP were land grant of course. Both the GN and MILW had some predecessor companies who received land grants, but none in the actual construction of their Pacific Extensions. The difference is that the MILW used the land grant NP heavily to transport material to construct its railroad, as well as benefitting from paralleling the NP much of the way and not having to establish communities and services therein as that had been done by the NP – a huge benefit of land grants. And, the GN route does support a huge agricultural industry in North Dakota and Montana with a huge majority of those states’ unit grain/fertilizer facilities.

The GN route in Washington will be removed or seriously altered within my lifetime, though, because the flooding, mudslide-covered beach section is fundamentally non-viable. Pity GN/BN/BNSF ripped out all the parallel routes from Seattle north. I wonder what the reroute will end up being; it's impossible to afford the old dismantled parallel routes now that they're highly expensive urban Seattle real estate. Beach routes are an attractive short-term choice which never works out well in the long run.

Hard to argue with that, Methuselah. Text me in the hereafter and let me know if the flooding thing happens before the Yellowstone Caldera takes out the NP and MILW rights-of-way in Montana, since you’ll be around to see all that. And 130 years and counting is a pretty good long run so far, all the while saving the railroad scores of millions of dollars annually in operating costs, and accessing port facilities.

The survival of the GN route through North Dakota, Montana, Idaho, and Washington is just as much an accident as the survival of the BNSF route across Iowa, where the Iowa Interstate route (ex-Rock Island) is clearly the better route, but was just owned by the wrong company at the wrong time.

Nope. Just like in Montana and North Dakota, the BNSF route in Iowa gets the traffic where it wants to go: Across Iowa. CB&Q/BN/BNSF had the traffic. The Rock Island didn’t, and even the UP got cold feet when it came time to merge. The advantage of the C&NW and CB&Q routes is that they had their own bridges across the Missouri River to avoid the Omaha/Council Bluffs terminal area. BNSF avoids it completely except for Omaha traffic, and UP now uses both the UP and C&NW lines between Missouri Valley and Fremont directionally.

So regarding the Pacific Extension: The financials, once they were unearthed in bankruptcy court, showed that the Pacific Extension was the only profitable part of the Milwaukee Road. Hilariously, the worthless money-losing granger lines and the line east of Terry, MT, which have the underlying problem of *not actually having any cities en route*, were mostly picked up by other companies after the final bankruptcy, because they hadn't been scrapped. The conclusion is that the profitable line would also have been picked up by someone if they hadn't been lying about the accounting, mismanaging it, and eventually scrapping it.

Mark, you may never have been an investor; it does scare investors off when management presents books claiming that a business is losing lots of money, *even if it isn't true* (as in the case of the Pacific Extension).

Mark, the facts don't support you, even on the narrow question of whether the Milwaukee management's behavior was short-term sensible. It wasn't. There's no world in which abandoning the only profitable part of your railroad while retaining the unprofitable part makes the slightest bit of sense on the planet, even if the profitable part is less profitable than your competitors. Give it up.

Sorry, I don’t “give up” on reality, and you’re not one familiar with “facts.” Sure is funny that the claims by the Rock Island losing lots of money didn’t scare off the SP, C&NW and what would become the Iowa Interstate from acquiring huge swaths of that railroad. If the Milwaukee Pacific Extension was all that profitable – or profitable at all with a future of remaining so – someone would have stepped in to save it, and no one did. So, to accept your claim, I have to think that only the pro-Pacific Extension zealots were right, and everyone else – on the Milwaukee, the BN, the UP – hundreds and hundreds of professional railroaders that were totally familiar with its operation – were wrong. Nope.

The Milwaukee Road is an example of the fact that sufficiently incompetent management can wreck pretty much anything. There are numerous other examples.

They were in a bad position for some of the same larger reasons the Rock Island and eastern railroads were in a bad position: passenger-centric, online-traffic-centric railroads were all in trouble at the time due to aggressive government subsidization of roads and trucks; routes with curves and grades always have some disadvantage -- but the Milwaukee Road was not suffering from the larger problems as badly as the eastern roads or the Rock Island, and managed to inflict an astounding amount of their own problems on themselves. Their own management was their worst enemy. You may want to give them some slack for not seeing the future (the oil crises), but they couldn't even see the present (with their inaccurate accounting books).

But that means that ALL parties involved were “sufficiently incompetent.” Again, not likely. Especially with its myriad deficiencies and abundant competition. Conspiracy! Conspiracy!
 
It is interesting to think about why the Milwaukee wasn't included in the GN/NP monopolist merger, and it probably should have been; the answer is clearly merely historical accident. BNSF ended up buying up the line east of Terry. If the Pacific Extension had been intact, they probably would have bought it too. It could effectively be used to form an extra track on the NP route from Three Forks to St. Regis. Using Snoqualmie and Stampede tunnels directionally would have many advantages; the Milwaukee route from Ellensburg to Lind would be a shortcut with far fewer curves than the river-following NP route, though missing Yakima and Pasco. The St. Paul Pass route would probably still have been abandoned, certainly (the very nearby NP route was also abandoned), but the rest of the route? No way.

No way? Really? It happened, didn’t it? (Probably your single – among so many – reality-free statement!)

As for the “what if” of BNSF buying the MILW west of Terry “if still intact.” Never. Its worn out infrastructure notwithstanding, the line still didn’t have CTC, hot box detectors, power switches, sidings of sufficient length, etc. Much more cost-effective to upgrade existing routes that did not have that additional albatross. A Milwaukee Road merged into the BN would look very much like what we have today.

As for the BNSF buying the line west of Terry having to do with it buying the line east: It has nothing in common. It’s interesting that you use the term “monopolist merge.” This is of course erroneous because the Milwaukee simply could not compete due to its horrible profile and circuitous branch line network – and this term would only be remotely true someplace like Montana, where the Milwaukee missed most of the state’s rail business anyway. And of course the reason that BNSF ended up purchasing the Milwaukee trackage in South Dakota was that the Milwaukee wanted out and the state designated the BN as operator. The Milwaukee was the primary railroad in South Dakota – as much of a “monopoly” it turns out as the BN was Montana – or more. The Milwaukee had received some money to fix its main line across the Dakotas after 1980, but it wasn’t enough of a “handout” so the state of South Dakota stepped in to save the line and finance its upgrade (handout continued). With the state showing preference to the Milwaukee routes, C&NW abandoned and shortlined its remaining routes, and BN did the same, leaving the state with mostly ex-Milwaukee Road trackage. It actually worked out for the best for the state’s agricultural community as the state’s routes accessed more-efficient BN (later BNSF) routes at Appleton, Terry, Sioux Falls, and Sioux City – especially important in today’s unit-train operations, which would have been cost-prohibitive over the Milwaukee Pacific Extension. Nonetheless, it’s interesting that fabrications about the BN monopoly still exist, but the Milwaukee route’s monopoly in South Dakota never seems to come up….
 
The other option I could see happening is the Milwaukee Road getting bought by one of the predecessors of the Seaboard System and CSX maybe being a truly transcontinental system. The Milwaukee Road did dip into Indiana and got close to Cincinnati where the L & N ran, not to mention they both met in St Louis. I'm not familiar with the L & N or its history so I wouldn't know how viable that would be.

The Milwaukee went to Kansas City, not St. Louis. And they got to Louisville as a condition of the L&N taking over the Monon. By 1969, the L&N already had acquired their part (the MP got the Thebes bridge part) of the C&EI and had access to Chicago. The main purpose of getting trackage rights on L&N/Monon into Louisville was to interchange with the Southern. But this didn't work because the Milwaukee track was so bad across Illinois and Indiana. The Southern wanted to run an Atlanta-Chicago train via Louisville on a 48-hour schedule to compete with L&N, but the Milwaukee claimed that it would take 48 hours just on their portion of the run.

Also, a side note, freight taking some extra time to get somewhere (especially grain or rocks) isn't that big of a deal. So long as the freight shows up when its supposed to, things will be fine. The problem with a railway in decline is that reliability becomes an issue, which will hurt business a lot. Add skimping maintenance to the pile of problems they were facing. Getting absorbed into a bigger railroad would have helped with some of those problems. Even if their transcontinental line was barely profitable, being a part of a much larger system would make taking low margins on a train from the Pacific Northwest to somewhere outside of the Milwaukee Road's system potentially worth it. Its not just the amount that could have been made hauling a train over the Pacific Extension, but whether or not having it added to another railroad. And the thing is, it didn't seem like any other railroad thought that of the Milwaukee.

Well, "freight taking extra time to get somewhere" really is a big deal, especially today with unit trains. Longer cycle time takes more equipment, both cars and locomotives. That's extra expense, especially if you don't have them. In the case of locomotives, that decreases availability for other commodities, too, so everything suffers. In the case of unit grain trains on some railroads (and other commodities, too) "sets" of cars are sold for period of time or a number of trips. If the trip time goes from like 7 days for a round trip to 12 (like during extreme cold or a service interruption), that increases costs in the entire cycle. And then as you say, for a railroad "in decline" the situation is exacerbated.

There pretty much wasn't any long-haul traffic on the Milwaukee that BN couldn't move cheaper or faster, which was also exacerbated by the Milwaukee not being able to keep up with the BN installing ribbonrail, CTC, power switches, lineside warning detectors, and lengthening sidings. I think a lot of railroaders were able to look into the future and see how deregulation would price the Milwaukee out of most markets to the Pacific Northwest, and how things that we take for granted today such as a cabooseless operation would have been an expensive fix for the Milwaukee that had few power or even spring switches. The ultimate heavy lift.
 
Group,

I’d like to explain one more thing about the Milwaukee Road debacle that seems to be little discussed in railfan circles. I’m certain that Mr. Meyer will sharply disagree with me and that’s fine, it is what it is, I guess.

No, I actually agree with you, Fred. Freight railroading in general was between the proverbial rock and proverbial hard place. Such antics are indeed debatable because the exact outcome is not known if a different course was taken.

That's why I believe it's best to avoid all the what-ifs about accounting, politics, and personalities and focus on the facts and the constants: The Milwaukee had a high-cost operating main and auxiliary line network compared to the competition no matter who was in charge doing whatever. Conversely, if the route was known to be operationally competitive with the competition, someone would have stepped in and saved it. Just like the Rock Island. And it wouldn't have taken much, evidently....especially when one considers that the biggest chunks of the railroad ended up with the MKT, SP, and C&NW, not known at the time to be rolling in dough (or even moderately solvent in some cases!). But no one did that with the Milwaukee Pacific Extension. Enough said.
 
My point is, that to the management of the Rock Island and Milwaukee Road, any merger wouldn’t do, only a merger with the Union Pacific would do (although the Milwaukee would have accepted BN). They were blinded to any other possibility that would have made some business sense. The Rock Island, Milwaukee Road, and Chicago & Northwestern were in a war of attrition with each other to become the UP's route to Chicago. Only one of them needed to survive to give the Union Pacific direct access to Chicago and the Northwestern was the one that survived long enough to be the one. The other two were sold for parts and the Pacific Extension wasn't needed by BN at the time, thus it's loss. If the Rock Island had picked a different partner to merge with, like the SP, it would have (hopefully) been a wake up call to the Mikwaukee Road's management that they should pursue other options, but that never came to pass.

This to me is also a very sad point. That the two dying railroads that had links between Chicago and Omaha saw that link as they only thing worth saving of themselves. The Rock Island for example not only met the SP in New Mexico, but it also cross with it or the Cotton Belt in Texas, Louisiana, Arkansas and Missouri, but none of those links were seen as valuable as their connection to the Overland Route at Omaha. In the context of the Milwaukee, whether or not the Pacific Extension was worth anything to them or anyone else was irrelevant, they only saw their connection at Omaha as worth anything. And from the sounds of it, a BN merger was just an easy way to put them out of their misery.
Tom,

I seem to recall reading that the “You Pee” did express some interest in buying the Milwaukee. I suppose somebody could argue that it could’ve made a good fit for them. But it would’ve only taken one tour of the Railroad to see what kind of condition the Milwaukee’s track was in to forever change their minds. Indeed, I don’t know if such a tour ever took place or not but even if it didn’t, they probably would’ve gotten wind of the track condition somehow. It was pretty much common knowledge at the time at least by railroaders if not Wall Street.

In his book The Nation Pays Again, Thomas Ploss threw in a neat anecdote. As he was learning the ropes at headquarters, some head honcho asked him, “Hey, you wanna go for a train ride?”

So he got the grand tour. He rode the Milwaukee’s passenger train out to Aberdeen South Dakota or somewhere which was actually a cut back of the Olympian that had been truncated. Then west of there they coupled the Company’s business car to the back of a freight train for the remainder of the trip to Seattle. Part of the time Ploss was riding in the cab of a “Little Joe”. He related to the reader the deteriorating condition of the track and the catenary supports.

Ploss discussed at length the aborted Milwaukee-C&NW merger that never was. The president (Quinn, I think?) was really pushing this but the irony of it all was that the C&NW didn’t have any freakin’ money, either. The condition of their Chicago-Council Bluffs mainline got so bad that it wasn’t much better than the Milwaukee’s track. They limped along until into the 1980s when they secured a federal loan for rail improvements. That helped turn the C&NW prospects around somewhat. In the end, the You Pee gobbled them up.

One thing that I’ve always wondered about is the possibility of a Conrail-Milwaukee merger. That would’ve been interesting if only the MILW could’ve limped along a bit longer until Conrail was sold in a IPO. As a single server provider of transcontinental service one could argue that it could’ve been turned into a powerhouse. It might’ve sparked an east to west series of mergers.

But once again there was that track issue. Virtually NO ONE it seemed wanted go out on a limb or jump off a cliff and try to fix it. So in the end, about the only option for management that was left was abandonment. They got painted into the corner at least in part with those preferred shares that I mentioned in an earlier post.

One sad anecdote that Ploss related, near the end of the book, he and his daughter Ariel attended an employee’s reunion in Montana after the road had been abandoned. It was really kinda sad to read.

Perhaps the only way this could’ve ever ended is the way it did. But are we really better off as a nation? In my own personal, humble and honest opinion, we are not. What could’ve been done? I don’t know. We live in a different environment today. If this were all transpiring today instead of the 1970s, perhaps someone could’ve found an answer with a better outcome.
 
Fred: As you believe that every railroad everywhere should be rebuilt, this was inevitable.
Mark,

Well, it is true that I could advocate and support the rebuilding of some lines but I don’t know about “every railroad everywhere”.

First of all, I’m not sure how practical that would be to rebuild any lines. Possible, yes, but not necessarily practical. I do know of one line in Texas that was rebuilt and another (also in Texas) that they were planning on rebuilding but I don’t know what the status is on the second line.

Could I support rebuilding all or even most abandoned rail lines? Hmmmmn. I have to be careful there. What about the abandoned Denver, South Park & Pacific? Or the West Side Lumber rail line? What about the Milwaukee Road’s Olympic Peninsula line that was only connected to the rest of the rail freight network by a ferry? Seeing some of those lines getting rebuilt would be fun but what would be the point? The kind of economic and market conditions that were in place at the time they were built no longer exist.

But here’s what I strongly believe although I know a lot of people will disagree with me: Our federal, state and local governments have spent a huge amount of money on our highway system. This had made it difficult for privately owned rail lines to compete with.

But it gets worse. Many states and local governments assess property taxes on railroad properties. You have to realize a fact here. High taxes discourage investment and if those taxes are punitive enough, they can actually ENCOURAGE disinvestment. That fact does not just apply to railroads but to a lot of businesses in general.

The county I live in in northeastern Indiana no longer has any rail freight access at all. How much of a role did property taxes play in that development? I can’t say but I’m skeptical that taxes had no effect.

I could add that at times the political and economic environment towards rail transport in the U.S. has been so hostile that the very fact railroads have survived at all is a testimony to the high efficiency of a steel wheel rolling on a steel rail.
 
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