Could closing the Gap have saved the Milwaukee Road?

Discussion relating to The Chicago & North Western, the Chicago, Rock Island & Pacific, the Chicago, Milwaukee, St. Paul & Pacific Railroad (Milwaukee Road), including mergers, acquisitions, and abandonments.

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Postby Otto Vondrak » Wed Jan 17, 2007 11:08 am

Why was the system designed with a gap in the first place? Wasn't there a cost savings to be realized by eliminating as many engine and crew changes and possible?

Anyone seen any of these books? I've always had an interest in the MILW Electric...

Electric Way Across The Mountains by Richard Steinheimer
Carbarn Press


The Milwaukee Road Under Wire by Karl R. Zimmerman
Quadrant Press

The Milwaukee Electrics by Noel Holley <--- I have this and need to read up.
Hundman Publishing

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Postby atlpete » Sun Feb 04, 2007 2:12 am

As I understand it the "gap" originated in the fiscal policy of the "St Paul" to study, evaluate and implement the great electrification on a division by division basis. Basically steep grades, tunnels, labor costs associated with double-heading and helper districts in the steam era etc. of the respective Washington and Montana lines made the investment justifiable on a depreciable cost basis by accounting division, the comparatively flat run between the two initially didn't, at least as much.
Though management clearly intended to fill it in, cost of capital, depressions, recessions, war, dieselization, recieverships etc. kept it from ever happening.
IMO filling in the gap wouldn't have done anything other than maybe prolong the operation west of Othello with the elimination of the intermediate engine changes. The forces leading to the demise of the Milwaukee in general certainly hastened the demise of electrification, but the real culprit, as with Conrail's decision to kill electric freight operations, are the economies of diesel power and standardized parts and maintenance, related specifically in the Milwaukee's case to the superb SD-40.
Those familiar with Holley's excellent volume, will remember his sad account of how cash poor the Milwaukee was in the seventies and as a result how deferred maintenance hobbled operations on the Pacific Extension in general and specifically the mountain divisions, as derailments became an almost daily occurence, often with catastrophic results for the equipment, lading and eventually the line itself, towards the end it wasn't good times by any stretch.
IMO Steinheimer's book, photographically is on par with the best of O. Winston Link, not familiar with the Zimmerman's volume though.
Cheers.
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby Friskens » Sat Nov 01, 2008 1:00 pm

Since the Little Joe:s was already using standardized parts (same traction motors as contemporary mainline diesels using GE equipment) and didn't have the moving parts a diesel locomotive have (engine+generator set) and on top of that Joe:s provided regenerative brakeing (savings up to 17% on flat country, in Switzerland RhB that runs in mountainous (GW Bush spelling alert) terrain accounts a whopping 50% electricity savings with Regenerative braking) something you can't match in the fuel economics of a diesel. On top of it all a Electric locomotive has a longer lifetime mostly because of the main diffrence from a diesel, the combustion engine part is worn out quicker then the rest of the locomotive.

Conrails commitment to electrification was a minor one and thus fully understandable they abandoned it. Clique electrifications with several diffrent systems isn't an ideal situation.

The MILW with "the gap" closed would have had an entire "main-line run" electrified something that would have been a much better alternative.

The Joe:s had also lasted at least into the 1980:s if comparison with the ones in CSSSB can be made. MILW:s SD-40:s was probably more a contribution to the MILW:S downfall then to any "economics" of diesels. As other sources noted here the 39 Million spent on diesels would have closed the gap and paid for new electric loco:s, letting the already bought ones be used on the Lines East, and branch dutys.

However as "atlpete" pointed out the MILW had other problems, managmental and recieverships etc that blocked any long term thinking. Ignoring ROW maintainence to attract merger partners etc etc. On approving the BN merger the ICC counted on MILW to be a counter force in the area, competition wise but they ignored that obviously.

Greetings Hans
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby QB 52.32 » Thu Nov 06, 2008 7:22 pm

De-electrification, abandonment of the Pacific Extension, and, the fact that MILW did not merge to form a transcon, nor be purchased by a "steamship interest" occurred because of the basic tenets of railroad economics and traffic flows, plain and simple. The high fixed costs of electrification requires very high traffic density to be worthwhile as an investment or for re-investment, let alone support a long-distance railroad with light traffic density/little on-line traffic; to this day it hasn't made sense for a transcon merger given traffic flows and the economic advantage of interchanging originated traffic to multiple, competing options; and, it would not be economically advantageous for a steamship line to limit itself to one railroad/one route over the long-run...leveraging competitive options leads to lower pricing (costs) for anyone using rail transportation. If electrification provided benefits large enough to have kept the MILW PE alive, let alone find new applications during the past 25 years, then we would have seen it happen. Obviously, it has not provided the ROI necessary to justify its investment during this more-recent era of U.S. railroad economics.
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby Friskens » Sat Nov 08, 2008 12:52 pm

You do realize they where essentially getting it _FREE_ with some minor strings so your economics are sort of invalid :-D pre-oil crisis the payback time would have been 11 years with oil crisis the payback time would have been 4 years, however you maybe missed that part?

Got to agree with you that the transcons merger suggestion wasn't a ideal situation to create, better to interchange with other roads@chicago/Louisville.

With BN:s creation as mentioned earlier MILW:s traffic situation in the West improved significantly as essentially ICC had set em up to be BN:s main competitor in the area with access to thier customers essentially.

As i figure it its was either BN or MILW who would have made it to today and BN obviously had the sharper bordroom staff, but MILW had the advantage of having only 1 mainline to maintain, and would probably have eaten BN alive in efficency alone, if they kept their track in shape that is.

Greetings Hans
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby QB 52.32 » Sat Nov 08, 2008 4:14 pm

Friskens wrote:You do realize they where essentially getting it _FREE_ with some minor strings so your economics are sort of invalid :-D pre-oil crisis the payback time would have been 11 years with oil crisis the payback time would have been 4 years, however you maybe missed that part?


I just saw your post regarding GE's proposal, but it was on a different thread. What was GE's motivation to offer to close the gap with an interest free loan, especially during that inflationary period? Is it possible that MILW's board was looking at other costs inherent with the electric operation that might have been overlooked/unknown/de-emphasized by someone promoting (ie., selling) the plan ? What parallels, if any, can be drawn with Conrail's shift away from using electric over to diesels? Thanks!
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby Friskens » Sat Nov 08, 2008 7:29 pm

GE would have a huge PR benefit ofc from this but as i understand it they calculated in the cost of in 10 - 20 years new locomotives had to be purchased and minor renewals on other parts of the electrical system, and they knew MILW was in a Cash crunch and this would in essence solve part of it making em a viable customer for the future aswell. There was also others that did independant analysis of the cost vs diesels and also settled on the fact that it was cheaper with the electrics, however this was ofc since MILW already had the electrification up and running.

And Inflation = good for this sort of thing, even if GE had to borrow the money (yeah right! weekly allowance for PR probably cowered it, remember GE is and was BIG back then already) the loan would have essentially been reduced to nothing with the help of inflation (need an example?).

Well you missed one big part here, MILW:s managment wanted Lines West shut down (personally i'd say BN had something to do with it or some one with intrests in said company(s), they basically made the most cash out of MILW:s Lines West shutting down) either cause fixing the rails cost to much after years in the 60:s ignoring maintanence too have the company look good on paper so any merger "victims" would be intrested, even Soo line buying lines East later had to borrow heavily to repair the almost completly run down eastern MILW network. One thing someone inside did was double the maintanence cost for Line West, but even with this the Lines West made some money and without it it almost looked decent, this was discovered after Lines West was abandoned ofc by the ICC (profitable lines wheren't allowed to be abandoned those days as i understand it. Anyone know?)

*Bah* this is starting to feel like another one of my massive rant posts *sigh* good you read this far anyway!

Other then that Conrail also had electrification there wasn't many parallels to be drawn, i think in the end Conrail made more money out of thiers cause they had it up and running during the oil crisis of the early 70:s. On top of that they where a mess ran by the goverment and had tons of redundant lines and a mix of locomotives from many failed railroads, probably picking what was best out of what was left, i know they abandoned some electric lines early favoring other parallel lines on a better state of dis-repair while other electric lines where left to the end and now are ran by CSX / NS / Amtrak (only amtrak running actual electric trains though) so can't make much out of it really, maybe there is some CR fan here that can enlighten us?


Greetings Hans
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby QB 52.32 » Sun Nov 09, 2008 1:18 pm

Thank you, Friskens, for your response(s). I see, too, that these issues are spread over 3 threads, which I have subsequently read. Very interesting, to say the least. Putting any political maneuverings and/or shananigans aside, and with an 8 train/day peak of interline received traffic originated from short-hauled carriers (SP, BN) in a regulated environment moving via a ROW subjected to deferred mtce., makes me wonder if the powers-to-be saw the inevitable handwriting on the wall...how do you justify the re-investment in the infrastructure and how would deregulation have affected their long-term (traffic) prospects on the PE since they did not generate a great deal of traffic themselves? Even 6-8 trains of traffic at "peak" (then, subsequently down to 2) over that length of route just doesn't seem to offer long-term viability. Perhaps, like many tragedies, it was just the confluence of bad decisions, fate, antagonists and unfavorable trends that lead to this sad outcome. In any regard, it's got me thinking and interested in learning more about the situation and what transpired.
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby Otto Vondrak » Mon Nov 10, 2008 12:03 pm

It seems like one of the strengths of the Lines West was the fact that it covered great distances and stopped at few towns. While this generated little on-line traffic, it made running trains easier and was an ideal candidate for electrification. What a waste to see this line revert to the wilderness!

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Re: Could closing the Gap have saved the Milwaukee Road?

Postby Friskens » Wed Nov 12, 2008 4:32 pm

Traffic was actually booming when MILW:s 1977?(need to check) bankrupcy hit, 176 mil in incomes from Lines West alone, however 60 mil in derailment costs and something in the same amount in liabilitys for damaged goods! None the then very poor railroad could afford. BN:s merger was slowly turning traffic over to MILW:s shorter and faster more direct route to StP/Chi, and they where given access to traffic from BN branchlines that earlier only crossed the MILW never interchanged with it. It took 55 hours from Tacoma to Chi in those days over the MILW:s line fastest route available.

the 6-8 trains a day was and is plenty enough to motivate both investment and reinvestments, some current lines around the US runs only 1 pair of trains a day and still maintains almost equal amounts of trackage lenghts. Remember that the further you haul something the more you make, 1 car on the PE provided on avarage 1000$ while on Lines East the same one car only gave a avarage of 100$ a day. With 20% of the personell cost and 25% of the lenght of the network
a car on PE was giving a 900% better return on investment, *sigh* should have been a no-brainer for the MILW board i guess but it was too difficult math i guess when you where blinded by quick fixes.


Funny thing is that one present company, skims ballast of the RoW and calls themself "better at turning thier pennies for RoW maintanence" then competitors, claims multi billion dollar profits, above the accustomed 11% return that other railroads are making (in a booming economy RR cost more to run and need to make larger investments thus the profits stays roughly the same, even with the increase in traffic), but this is ofc only a personal observation nothing that you need to worry about! :-D on a side note they are also beeing sued for cartel:ing fuel surcharges, even though they had insured themself from price hikes from the suppliers with long term contracts which they even had a noticed about in thier investor section ... *doh*

Greetings Hans
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby lvrr325 » Thu Dec 18, 2008 12:27 pm

No, but only because after 1959 the Milwaukee was run by shortsighted fools playing games to keep the balance sheets looking good while only interested in merger with another road. When they should have been maintaining the mainlines, abandoning the unprofitable granger branches and concentrating on bridge traffic from the west coast to Chicago and (later) Louisville. The Lines West was profitable as late as 1977, particularly after they were able to access the SP at Portland. If someone ever writes an in-depth book on the failure of the Milwaukee Road, it should be titled "This Is Not How To Run A Railroad" ...
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby vermontanan » Tue Mar 31, 2009 8:15 pm

BillN wrote:3) Was the Milwaukee Roads route from the Pacific to the Midwest the "shortest and fastest" as stated in wikipedia?

Kind of hard to think the road with the "best" route would not be able to turn some kind of profit.


Actual mileages are:

Chicago to Seattle:
BN, via Oregon, Anoka, Casselton, Havre, Wenatchee 2181
BN, via Oregon, Anoka, Prosper, Havre, Wenatchee 2177
MILW, via Malden 2178
C&NW/UP via Boone, Blair, Kuna 2421

Chicago to Tacoma:
BN, via Oregon, Anoka, Casselton, Havre, Wenatchee, Seattle 2221
BN, via Oregon, Anoka, Prosper, Havre, Wenatchee 2217
BN, via Oregon, Anoka, Casselton, Havre, Ritzville, Vancouver, WA 2361
MILW via Malden 2207
C&NW/UP via Boone, Blair, Kuna 2381

Chicago to Portland:
BN, via Oregon, Anoka, Casselton, Havre, Ritzville, Wishram 2234
BN, via Oregon, Anoka, Prosper, Havre, Ritzville, Wishram 2230
MILW, via Malden, Tacoma, Maytown 2361
C&NW/UP, via Boone, Blair, Kuna 2237

Chicago to Longview, WA:
BN via Oregon, Anoka, Casselton, Havre, Ritzville, Vancouver, WA: 2260
BN via Oregon, Anoka, Prosper, Havre, Ritzville, Vancouver, WA: 2256
MILW, via Malden, Tacoma, Maytown 2312
C&NW/UP via Boone, Blair, Kuna 2283

St. Paul to Seattle:
BN, via Anoka, Casselton, Havre, Wenatchee 1751
BN, via Anoka, Prosper, Havre, Wenatchee 1747
MILW, via Malden 1768

Chicago to St. Paul:
CB&Q via Oregon, Winona Jct. 427
C&NW, via Madison 410
C&NW, via Milwaukee 408
CR&IP, via West Liberty, Manly 514
MILW, via Portage, Winona 410
Soo, via Waukesha, Owen, Chippewa Falls 449


Chicago to Billings:
CB&Q via Ottuwma, Council Bluffs, Omaha, Alliance 1392
CB&Q via Ottumwa, Louisville, Alliance 1374
CB&Q/NP via Oregon, St. Paul, Staples, Bismarck 1310

St. Paul to Seattle:
GN, via Willmar, Fargo, Havre 1783
GN, via Osseo, Alexandria, Grand Forks 1818
GN, via Willmar, Kindred, Havre 1776
GN, via Osseo, Alexandria, Prosper, Havre 1765
NP, via Butte, Dixon 1892
NP, via Helena, Dixon 1894
NP, via Helena, St. Regis 1922
MILW, via Spokane 1782
MILW, via Malden 1768

St. Paul to Longview, WA:
GN, via Willmar, Fargo, Havre, Wenatchee, Seattle 1926
GN, via Osseo, Alexandria, Grand Forks, Havre, Wenatchee, Seattle 1961
GN, via Willmar, Kindred, Havre, Wenatchee, Seattle 1919
GN, via Osseo, Alexandria, Prosper, Havre, Wenatchee, Seattle 1908
GN, via Willmar, Fargo, Havre, Pasco/SP&S, Vancouver, WA 1857
GN, via Osseo, Alexandria, Grand Forks, Havre, Pasco, Vancouver, WA 1892
GN, via Willmar, Kindred, Havre, Pasco/SP&S, Vancouver, WA 1840
GN, via Osseo, Alexandria, Prosper, Havre, Pasco/SP&S, Vancouver, WA 1839
MILW, via Spokane, Tacoma, Maytown 1916
MILW, via Malden, Tacoma, Maytown 1902
NP, via Butte, Dixon, Auburn 1991
NP, via Helena, Dixon, Auburn 1993
NP, via Helena, St. Regis, Auburn 2021
NP, via Butte, Dixon, Pasco, Wishram/SP&S, Vancouver, WA 1899
NP, via Helena, Dixon, Pasco, Wishram/SP&S, Vancouver, WA 1901
NP, via Helena, St. Regis, Pasco, Wishram/SP&S, Vancouver, WA 1929

St. Paul to Spokane:
GN, via Willmar, Fargo, Havre 1453
GN, via Osseo, Alexandria, Grand Forks 1488
GN, via Willmar, Kindred, Havre 1446
GN, via Osseo, Alexandria, Prosper, Havre 1435
NP, via Butte, Dixon 1496
NP, via Helena, Dixon 1498
NP, via Helena, St. Regis 1526
MILW via Harlowton 1473
Soo/CP/SI via Harvey, Moose Jaw, Dunmore, Yahk, Eastport 1476

St. Paul to Great Falls:
GN via Willmar, Fargo, Minot, Havre 1047
GN via Willmar, Kindred, Minot 1029
GN via Osseo, Alexandria, Prosper, Minot 1028
MILW via Harlowton 1129

St. Paul to Butte:
GN via Willmar, Fargo, Minot, Great Falls 1218
GN via Willmar, Kindred, Havre, Great Falls 1200
GN via Osseo, Alexandria, Prosper, Havre, Great Falls 1199
MILW via Harlowton 1115
NP via Bismarck 1118

Duluth to Seattle:
GN via Cass Lake, Devils Lake, Wenatchee 1790
GN via Brook Park, St. Cloud, Prosper 1828
NP via West Duluth, Staples, Butte, Dixon 1887
NP via West Duluth, Staples, Helena, Dixon 1889
NP via West Duluth, Staples, Helena, St. Regis 1917
NP via Superior, Staples, Butte, Dixon 1899
NP via Superior, Staples, Helena, Dixon 1901
NP via Superior, Staples, Helena, St. Regis 1929
MILW via West Duluth, Harlowton, Malden 1920


Lewistown to Seattle:
BN via Great Falls, Whitefish, Rock Creek, Rathdrum, Wenatchee 936
GN, via Great Falls, Whitefish, Eureka, Newport, Wenatchee 962
MILW, via Harlowton, Malden 901

Lewistown to Portland:
BN via Great Falls, Rathdrum, Ritzville, Wishram 978
MILW via Malden, Black River, Tacoma, Frederickson, Maytown 1083

Great Falls to Seattle:
BN, via Whitefish, Rock Creek, Rathdrum, Wenatchee 827
BN, via Whitefish, Rock Creek, Rathdrum, Ritzville, Vancouver, WA 1031
GN, via Whitefish, Eureka, Newport, Wenatchee 853
MILW, via Harlowton, Malden 1037

Great Falls to Spokane:
BN, via Whitefish, Rathdrum 501
GN, via Whitefish 523
MILW via Harlowton, Manito 742

Great Falls to Longview, WA:
BN via Whitefish, Rathdrum, Ritzville, Vancouver, WA 905
GN via Wenatchee, Seattle 996
GN via SP&S/Pasco, Vancouver, WA 929
MILW via Malden, Black River, Tacoma, Frederickson, Maytown 1176

Great Falls to Portland:
BN via Whitefish, Rathdrum, Ritzville, Wishram 869
MILW via Malden, Black River, Tacoma, Frederickson, Maytown 1219
MILW/UP via Malden, Marengo, Hinkle 1098

.
There were a few places where the Milwaukee was shortest, but many where it was much longer, including from the prime wheat growing area of Montana (Great Falls) to where most Montana wheat is shipped today (Portland area); some 350 miles further. In addition, the Milwaukee route was vastly inferior to the BN route with regard to profile. For instance, a grain train from Great Falls to Portland would encounter a grade steeper on the MILW between Great Falls and Lewistown than on the BN between Great Falls and Portland (and they were additionally much more frequent).
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby vermontanan » Tue Mar 31, 2009 8:18 pm

SooLineRob wrote:Regarding the original question, "closing the gap", in short, no.

Even the Chicago-Kansas City line was the shortest rail mile route between the two, and even that route didn't survive under a Class One.

...


Chicago-Kansas City:
ATSF: 449 miles
CB&Q: 466 miles
CRI&P: 495 miles
MILW: 504 miles
Source: Official Railway Guide
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby decisivemoment » Sat Apr 18, 2009 10:53 pm

An interesting thing with regard to this electrification is the 3000 volt thing. The "Little Joes" ring a bell? The fact they were originally intended for export to Russia ring a bell? It should. Almost the entire trunk network in Russia was electrified to 3000 volt, including the Trans-Siberian. It's gradually being converted over to 25kv, but this is a long process.
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Re: Could closing the Gap have saved the Milwaukee Road?

Postby neroden » Sun Oct 04, 2009 1:01 pm

lvrr325 wrote:No, but only because after 1959 the Milwaukee was run by shortsighted fools playing games to keep the balance sheets looking good while only interested in merger with another road.


This is a fairly good description. The sequence of boneheaded moves is legendary. It wasn't just one, it was one after another after another.
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