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Over the years I have read about several tragedies befalling
railroads, such as the Penn Central disaster, the northeastern rail
market collapse during the 1970s, and the Rock Island debacle of the
1970s.
However, none, not even the PC collapse, truly compare to
the bizarre, dumbfounding, and needless loss of the Chicago, Milwaukee,
St. Paul & Pacific Railroad, better known as the Milwaukee Road,
during the 1970s (and even worse that it was allowed to be torn up and
sold piecemeal after bankruptcy). I have been studying the Milwaukee
for a few years now and it is just stunning what the management, and
proceeding bankruptcy court, allowed happen to the railroad.
While
the Penn Central is often given the most celebrity status in terms of
how not to run a business, let alone a railroad, not even it can truly compare to the events
that led to the Milwaukee's undoing.
Here was a railroad that
not only had multiple (and ample) opportunities to pull itself out of a
future bankruptcy but also the chance to completely dominate western
railroading, even after the Burlington Northern merger of 1970 (which
combined four railroads the Chicago, Burlington & Quincy; Great
Northern; Northern Pacific; and Spokane, Portland & Seattle). Not
only did the Milwaukee dominate the Port of Seattle and moved nearly
80% of its originating traffic but also nearly 50% of the total
container traffic originating from the Northwest in general. The
Milwaukee Road, being the farthest stretching railroad in the lower 48
states prior to 1980 (it stretched from Louisville, Kentucky to
Seattle), also had a lucrative chance to interchange traffic with the
Southern at Louisville, Kentucky to move freights heading to Chicago as
well as to the Pacific Northwest but turned down the opportunity as it
did not want to spend the necessary maintenance to upgrade what was
essentially a branch line.
Further still was chance in the 1970s
for the Milwaukee to completely overhaul its western electrified lines
and close the "gap" between Avery, Idaho and Othello, Washington with
General Electric funding the entire project. However, again, the
Milwaukee declined yet another golden opportunity (and, of course, when
on to rip down the wires after 1974 just after oil prices skyrocketed).
The Milwaukee also had the chance to purchase the C&NW outright in
the 1970s but declined the offer. If one takes the time to read about
what happened to the Milwaukee Railroad, beginning in 1970, one cannot
help but come away with an honest belief that the railroad's management
had simply given up on railroading and wanted anything to be out of the
industry.
To top all of this, the CMStP&P began refusing
traffic during the 1970s (as they claimed they did not have adequate
car supply although there were hundreds of cars sitting in storage), to
the tune of over $64 million in a single year! Perhaps most
dumbfounding of all, however, was the discovery (after the bankruptcy)
of expenses being double-entered in the books. After the ICC figured
proper numbers for the railroad's books during its final years, even
after all of the opportunities turned away and traffic refused over Lines
West, during its last year of operation the route still made profits of nearly
$3 million.
In any event, what could have been with the Milwaukee
is startling. Having eleven gateways in the west to interchange traffic
as a result of the BN merger (one of which was the Southern Pacific
began sending the Milwaukee enormous amounts of traffic), a Pacific
Northwest main line that was the fastest and most efficient, a
domination of traffic originating out of Puget Sound, the opportunity
to ally with the Southern Railway and operate trains between
Chicago-Atlanta and points further west with its advantageous
connection to Louisville, and a chance to purchase the C&NW to
further increase its traffic base, the Milwaukee Road would very likely
have ruled supreme in the Midwest and Northwest and there is also a
very good possibility that it would have done so to such a degree that
there could be one more Class I railroad still operating today,
continuing to give the current operator in the Pacific Northwest, the
BNSF Railway, significant competition.
In all and everything
aside, the allowance of the bankruptcy court to sell off and abandon
the Milwaukee's western lines, even after it was proven they were still
profitable is perhaps most tragic of all. This can likely be
contributed to the perception railroads were given by the public during
this period in American history. However, the result of the Milwaukee's
downfall and loss of its key western line to the Northwest coast has
cost three state's their railroad and an important route upon which
shippers, and our economy as a whole, could still very much use to move
intermodal and other freight points east and west. For more reading about
the railroad's collapse please visit the below resource.
The Milwaukee Road
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