Chicago, Milwaukee, St. Paul and Pacific Railroad

The Milwaukee Road, officially the Chicago, Milwaukee, St. Paul and Pacific Railroad (CMSP&P RR) , was a Class I railroad that operated in the midwest and northwest of the United States from 1847 until its acquisition by and merger with the Soo Line railway in 1985–1986. 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. Construction began in 1906 and was completed in 1909. The route chosen was to be 80 miles shorter than the shortest competitor's, as well as better grades than many. It was an expensive route, however, since the Milwaukee, receiving no land grants, had to buy 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. 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 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

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 other railroads such as the Union Pacific Railroad, the Milwaukee instituted 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.

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 causalty. 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.

Regional railroad, 1981-1985

The restructured Milwaukee Road, Inc. ("Milwaukee II") proved no more profitable than the previous, losing money every year. Competition by other, larger railroads for control of the Great Lakes area attracted a bidding war for purchase of the railroad in 1984, with the C&NW and the SOO bidding up the prices. The railroad was sold to the SOO on February 21, 1985 and officially ceased to be as of January 1, 1986.

Passenger train service

Starting in November, 1955 the Milwaukee Road assumed joint operation of the Union Pacific's City of Los Angeles, City of Portland, City of Denver, and Challenger trains as well as the Union Pacific/Southern Pacific City of San Francisco.

The Milwaukee Road's streamilined passenger services are unique in that most of its equipment was built by the railroad at its Milwaukee Menomonee Valley shops including the four generations of Hiawatha equipment introduced in 1933-34, 1935, 1937-38, and 1947-48. Most striking were the "beavertail" observation cars of the 1930s and the "Skytop Lounge" observation cars by industrial designer Brooks Stevens in the 1940s. Extended "Skytop Lounge" cars were also ordered from Pullman for Olympian Hiawatha service in 1951. The Olympian Hiawatha set was later sold to the Canadian National Railway.

Trivia

August 26, 1999: The United States Postal Service issues 33-cent All Aboard! 20th Century American Trains commemorative stamps featuring five celebrated American passenger trains from the 1930s and 1940s. One of the five stamps features an image of The Hiawatha, known as "Fastest Train in America", as it traveled over 100 miles per hour on its daily run connecting Chicago, Milwaukee and the Twin Cities.

References

Derleth, August The Milwaukee Road: Its First Hundred Years (Creative Age Press, New York, 1948).
Schmidt, W. H., Jr. (1977) The singular Milwaukee - A profile, Railroad History (136) 5-129.

External links

Milwaukee Road Historical Association
The Milwaukee Road 4-8-4 #261
Milwaukee Road History at Milwaukee Public Library
Milwaukee Road history (Puget Sound Model Railroad Engineers)
All Aboard! 20th Century American Trains 1999 USPS Stamp Program
Milwaukee Road online
The Gene H. Lawson collection: The Milwaukee Road, a Museum of Pictures - fascinating picture collection along the Pacific Extension 1910-1980 approx.
University of Washington Libraries Digital Collections – Transportation Photographs An ongoing digital collection of photographs depicting various modes of transportation in the Pacific Northwest region and Western United States during the first half of the 20th century. Includes images of the Milwaukee Road.

1847 establishments | 1985 disestablishments | Chicago, Milwaukee, St. Paul and Pacific Railroad