Termination of B&M/MEC Joint Management

I have been having a conversation with edbear about the B&M leading to the bankruptcy. He asked me about whether I knew about the animosity which MEC employees held toward the B&M. This lead to me asking about the total split, and independent MEC management. This topic may be of interest here, so maybe Ed could explain it, rather than to me personally.

How did E.S. Miller get to power? I know he was in the Law Dept.? Since the split happened before McGinnis came to power, what made MEC become disenfranchised with Mr. French, and Mr. Rourke's management, especially after they had served for so long already? Was it the same issues which gave McGinnis the votes to take over B&M, such as low returns, no dividends, slow modernization?

Sorry to bait you, Ed, but I think there are many here who would like to know.

Excellent question/topic!

Maine Central published in 1976 a 16 page magazine outlining it's history and operations, the final two pages
being a chronology of construction, acquisitions, dispositions and so on. Maine Central came under the control
of Eastern Railroad in 1871, and the Boston and Maine in 1884 when Eastern became part of B&M. In 1907 the
New Haven gained control of the B&M and along with it the MEC, with Charles S. Mellen, president of the
New Haven, becoming president of the MEC in 1910. By 1914 both NYNH&H and B&M were in financial difficulty,
causing concern among some prominent Mainers, who formed Maine Railways Company to buy back MEC stock
from the B&M. Control was returned to local Maine interests in 1916. The following is a direct quote- "In late
1933 Maine Central became managed by Boston and Maine under a contract called a " Co-operative Agreement."
Despite the fact that operations were as one, with combined operating revenues of $100 million, the two never
enjoyed annual savings much in excess of $100,000 while serious detriments of the common management were
apparent. In the early 1950's Maine Central again began to pull back to independence and in 1955 completed
the separation at a time when pro forma annual savings to Maine Central had shrunk to a mere $40,000."
E. Spencer Miller was elected president in 1952. I've never seen specifics presented but the insinuation was
that business decisions and financial charges were made that favored the B&M, with the MEC being used to
prop up the combined system.

As happens in a divorce, quite often the root of the problem is money. The MEC had its own Board of Directors which in effect appointed the B & M management to be their management. The MEC went into the Great Depression with a number of financial problems which the B & M never either had or had divested itself of. The Maine Central had just written off two ventures into two foot gauge territory, the Sandy River and the Bridgton. It still owned the Mt. Kineo and Samoset Hotels. It had a small fleet of steamboats to serve Bar Harbor (and other resort locales) which were made redundant when a causeway was built to Mt. Desert Island. It was still expanding some years after the B & M reached its peak mileage with the lease of the Fitchburg in 1900. The MEC was still building then with the Washington County, Somerset and Portland & Rumford Falls coming into its system somewhat later. Its seasonal summer traffic went to high class resorts that catered to high fare Pullman passengers, not the Revere, Salisbury, York or Old Orchard Beach types. When highways and autos improved enough, their owners could forgo Pullman or parlor entirely. Look at a MEC employee timetable from 1930s. Most mainline sidings were connected only at one end. Probably a short passenger train had to head in or back out rather than a freight, but it was not a fast railroad. I believe the Miller group got hold of the MEC on the promise of money. When Miller took over, MEC had a preferred stock issue of 30,000 shares with a 5% cumulative dividend. Arrears in 1949 were $85 per share. When Miller took over, the regular dividend had resumed starting in 1950 and some of the arrears were being paid. 1952 had arrears down to $80 per share. It would have required $2.4 million to clear up the arrears. MEC used some of its excess cash to reduce the number of shares and keep the dividend current and work down the arrears. MEC people had a lot of animosity toward the B & M. It probably was a combination of a number of things. MEC diesels wore the same paint scheme as B & M units. GRS searchlight signals like the B & M used were used to replace semaphores on the MEC. The 1947 lightweight car purchase from Pullman-Bradley was identical to the B & M's purchase. The Joint Facility Manager of the B & M told me there were people at the MEC who wanted to get even with the B & M. I worked at B & M 1968-86. When Guilford bought the B & M, June 30, 1983, it already owned the MEC (except for whatever preferred stock was still outstanding). Guilford installed the Chief Mechanical and Chief Finance Officers of the MEC to corresponding positions on the B & M. I don't remember about the Chief Engineer. I wound up working for a guy who told me "now we're getting even." Just like some mis-guided social programs, they were getting even not with the people who allegedy did them wrong, but whoever happened to be there at that moment.

Most interestingly, the guy who told me "we're getting even" never worked for the MEC during the period of joint management. He started at the MEC about 20 or so years after the agreement ended.

Some of this still doesn't seem like valid reasons to hate the B&M. From reading books like High Green, and Vanishing Markers, it sounds like French was really a Teddy bear at heart. He kept lots of lines and runs, which a hard nosed manager would have gotten rid of. Look what McGinnis did.

The joint equipment purchases made sense. I'm sure that Pullman, or EMD would give better prices on one large order. That way they didn't have to make two separate small orders, with different specifications. This is proven by some short line locomotive orders. I believe that Texas Mexican GP60 order was added to the SP/Cotton Belt orders. This way EMD was all set up. No custom work with changes to the assembly line.

I think the animosity was primarily in the General Office. End of 1956 B & M had 10,280 employees of which 1,995 were clerical/professional. At the same time the MEC's were 2,851 and 454 respectively. While Miller was elected President in 1952, it took several years for the break up to become complete. It was only the administrative and clerical forces that were really affected by the consolidation in 1933 and break up about 22 years later. B & M's Auditor of Passenger Receipts was located in the MEC General Office Building in Portland. A union agreement had to be worked out between the two roads and the BRAC (now TCU) union. Imagine being on the B & M payroll in Portland, either being hired off the street sometime during the period of joint management, or someone who had relocated to Portland in 1933 or sometime thereafter. You maybe owned a house, had kids in school and so forth. You maybe got told, your job was going to Boston and you had until such and such a date to get there. This was somewhat solved by giving all the affected people one bump. Some people didn't have the seniority to stay in Portland (or Boston) so had they had to move to the other city. But they still had the bump and those were so noted on rosters well into the 1970s. Some of the affected folks chose not to uproot families and found rooms or other people to share apartments in one city or the other and go home Friday afternoons and return late Sunday night or early Monday morning (when such service train service was available) for a number of years. This only really affected the General Office types and Operations, Mechanical and Engineering were set up differently. However, the General Office holds the key to the cash box and purchasing.

Also, maybe the MEC folks didn't like being bossed.

I recall reading Mr. Miller complaining that the MEC didn't need its 50% share of the 1947 P-S lightweight order. The article (B&M Bulletin? I believe he was still alive at the time of publication) said nothing about the seven E-7s, or whether the MEC should have bought any lightweight cars at all. The MEC's lightweight diners were sold in 1952; I wonder if that was before or after Mr. Miller became president.

Here is a thread on the history of Mr. Miller.
viewtopic.php?f=77&t=155340" onclick="window.open(this.href);return false;

"Mr. Miller's Locomotive" MEC 573 lives on as CSRX #573.
Here's a few details on that:
And the 573 was "Mr. Miller's Locomotive", (President of the Maine Central) and usually was the power on the MEC OCS trains.
It was the last MEC locomotive with a working steam generator to service the company office cars. The 573 is lucky to still
be around, as it was involved in an OCS derailment in Miles Pont VT in November of 1981, but was rebuilt. Thanks to Gil
Ford for the photos....

http://www.rrpicturearchives.net/showPi" onclick="window.open(this.href);return false; ... id=2945246

Several more photos here, scroll down.
http://www.rrpicturearchives.net/showPi" onclick="window.open(this.href);return false; ... id=2945246