Chicago,
Milwaukee, St. Paul and Pacific Railroad - (en)
The Milwaukee Road, officially the Chicago, Milwaukee, St. Paul and
Pacific Railroad (CMSP&P RR) (AAR reporting marks MILW), was a Class I
railroad that operated in the midwest and northwest of the United States
from 1847 until its acquisition by the Soo Line railway on January 1,
1986. The company went through several official names and faced bankruptcy
several times in that period. While the railroad does not exist as a
separate entity anymore, it is still commemorated in buildings like the
historic Milwaukee Road Depot in Minneapolis, Minnesota and in railroad
hardware still maintained by railfans, such as the Milwaukee Road 261
steam locomotive.
History
The Milwaukee Road appeared as the Milwaukee and Waukesha Railroad when
incorporated in 1847, but soon changed its name to Milwaukee and
Mississippi. After three years, the first train ran from Milwaukee to
Wauwatosa, Wisconsin, and the first passenger train ran on February 25,
1851. In 1874 the name was changed to Chicago, Milwaukee, and St. Paul. By
1887, the railroad had lines running through Wisconsin, Minnesota, Iowa,
South Dakota, and the Upper Peninsula of Michigan.
Expansion
In the 1890s, the Milwaukee's directors increasingly felt that they had to
extend the railroad to the Pacific in order to remain competitive with
other roads. A survey in 1901 estimated costs to build to the Pacific
Northwest as $45 million. In 1905, the board approved the Pacific
Extension, now estimated at $60 million. The contract for the westernmost
part of the route was awarded to Horace Chapin Henry of Seattle.
Construction began in 1906 and was completed in 1909. The route chosen was
to be 18 miles shorter than the shortest competitor's, as well as better
grades than some. It was an expensive route, however, since the Milwaukee,
receiving few land grants, had to buy most of the land or acquire smaller
railroads. In addition, the five mountain ranges that had to be crossed (the
Saddles, Belts, Rockies, Cascades, and Bitterroots) required major civil
engineering works and the use of additional locomotive power. The
completion of 2,300 miles of railroad in only three years was a major feat.
Some historians question the choice of route, however, since it bypassed
some population centers and passed through areas with limited local
traffic potential. Much of the line paralleled the Northern Pacific
Railroad. It was primarily a long-haul route.
Electrification
The Milwaukee soon found that operation of steam locomotives over the
mountain passes was difficult, with winter temperatures that reached -40°F.
Electrification seemed to be the answer, especially with abundant
hydro-electric power in the mountains and a ready source of copper on-line
at Anaconda, Montana. In 1914, electrification began between Harlowton,
Montana and Avery, Idaho. The first electric train ran in 1915 between
Three Forks, Montana and Deer Lodge, Montana. The system used was 3,000
volt DC overhead line.
In 1917, the board approved the construction of a separate electrified
district between Othello, Washington and Tacoma, Washington, extended to
Seattle in 1927. The two electrified districts were never connected, but a
total of 656 route-miles (1,056 km) of railroad were electrified, making
it the largest electrified railroad in the US.
The electrification was successful from an engineering and operational
standpoint, but the cost of building the Puget Sound Extension and
electrification had cost $257 million, not the $45 million the road had
originally budgeted for reaching the Pacific. The debt load and reduced
revenues brought the road to bankruptcy in 1925.
Reorganised as the Chicago, Milwaukee, St. Paul and Pacific Railroad
Company in 1927, the company had hardly a chance to make anything of its
fresh start before the Great Depression hit. Despite innovations such as
the famous Hiawatha high speed trains that averaged over 100 mph, the road
again filed for bankruptcy in 1935. The Milwaukee operated under
trusteeship until December 1, 1945.
Postwar
Chicago, Milwaukee, St. Paul and Pacific Railroad train No. 4, the Pioneer
Limited, passes near Deerfield, Illinois on June 22, 1946.Relative success
followed the war. The railroad dieselized in the mid 1950s, replacing most
steam locomotives by 1955 and retiring the last in 1957. Other
modernizations included modern freight yards. In association with Union
Pacific Railroad, the Milwaukee took over operations of the "Cities"
— the City of Los Angeles, the City of San Francisco, the City of
Denver, the City of Portland, as well as the all-coach Challenger from the
Chicago and North Western Railway.
1960s
The whole railroad industry found itself in decline in the late 1950s and
the 1960s, but the Milwaukee was hit particularly hard. The Midwest was
overbuilt with too many competing roads, while the competition on the
transcontinental routes to the Pacific was extremely tough as well. The
premier transcontinental streamliner, the Olympian Hiawatha, despite the
innovative scenic observation cars was cancelled in 1961, becoming the
first visible casualty. The resignation of President John P. Kiley in 1957
and his replacement with the fairly inexperienced William J. Quinn was a
pivotal moment; from that point onward, the road's management was fixated
on merger with another railroad as the solution to the Milwaukee's
problems.
Railroad mergers had to be approved by the Interstate Commerce Commission,
however, and in 1969 the ICC effectively blocked the merger with the
Chicago and North Western Railway (C&NW) that the Milwaukee Road had
counted on and had been planning for since 1964. The ICC asked for terms
that the C&NW was not willing to agree to. The merger of the
"Hill Lines" — the Northern Pacific, the Great Northern, and
the Burlington Route — was approved at around the same time, and the
merged Burlington Northern came into being on March 3, 1970, completely
surrounding the Milwaukee Road.
Early 1970s
Almost immediately after the BN merger, the owners of the C&NW offered
to sell the railroad to the Milwaukee outright. The Milwaukee board
rejected the offer, even though it would have given them what they had
wanted throughout most of the previous decade, stating that they now
believed only merger with a larger system — not a slightly smaller one
— could save the railroad. Almost immediately, the road filed with the
ICC to be included in the Union Pacific merger with the Chicago, Rock
Island and Pacific Railroad. Nothing came of this, nor other attempts to
force the Milwaukee into other mergers against the desires of the other
participants.
Fortunately for the Milwaukee, the BN merger required opening more markets
to competitors, and in 1971-73, the MILW's traffic on its Pacific
Extension increased substantially, although the reverse was true on its
Midwest lines. The deferred maintenance on the railroad's physical plant,
however, which had been building up all through the 1960s as the road
attempted to polish its financial appearance for merger, was beginning to
cause problems. The road's financial problems were exacerbated by the
road's practice of improving its earnings during that period by selling
off its wholly owned cars to financial institutions and leasing them back.
The lease charges became steeper and steeper, and more and more cars
needed to be sold off in order to pay for the lease payments. The
railroad's fleet of cars was becoming older and older because more money
was being spent on finance payments for the old cars than on buying new
ones. This, in turn, contributed to car shortages that turned away
business.
De-electrification
In February 1973, and against the advice of studies conducted by both the
railroad and independent groups, the Milwaukee decided to scrap its
electrification scheme. The board of directors considered the
electrification scheme an impediment to its merger and consolidation plans,
and that the money required to maintain it would be better spent elsewhere.
The high copper prices of time, and the $10 million the railroad estimated
it would get for selling off the copper overhead wire, contributed to the
decision.
The surveys had found that an investment of $39 million could have closed
the "gap" between the two electrified districts, bought new
locomotives, and upgraded the electrical equipment all along the line.
Furthermore, the displaced diesel locomotives could have been used
elsewhere and thus reduced the requirement to purchase new, reducing the
true cost of the plan to only $18 million. General Electric even proposed
underwriting the financing because of the railroad's financial position.
Rejecting this, the railroad dismantled its electrification just as the
1973 oil crisis took hold. By 1974, when the electrification was shut
down, the electric locomotives operated at half the cost of the diesels
that replaced them. Worse, the railroad had to spend $39 million, as much
as the GE-sponsored revitalisation plan, to buy more diesel locomotives to
replace the electrics, and only received $5 million for the copper scrap
since prices had fallen.
The badly-maintained track, which was the part of the system most in need
of renewal, was never touched.
Decline to bankruptcy
Things didn't get any better after the electrification was dismantled. By
1977, much of the Pacific Extension was under slow orders due to the
condition of the track, and transit times had almost tripled. Cars needing
repair were being sidelined for lack of money, and locomotives needing
major service were being parked. The road filed for bankruptcy for the
third time on December 19, 1977.
The bankruptcy resulted in the Milwaukee abandoning the Pacific Extension
completely in 1980 and restructuring as a small regional line, which was
eventually taken over by the Soo Line in 1985. However, the ICC's auditors
discovered, too late, that for some reason the Pacific Extension's
expenses had been double-entered during most of the 1970s. Far from the
unprofitable boat-anchor the railroad and the bankruptcy trustees said it
was, the ICC found that the Pacific Extension had been returning a profit
to the railroad even through 1977 and 1978, at which time traffic was
severely down due to the road's problems.
