I suggest you read Stan Johnson’s The Milwaukee Road’s Western Extension, specifically page 23.
I do not understand what you think is wrong with rebuliding cars under an equipment trust. Will you please explain?
Mac
This is what I got out of Ploss’s book The Nation Pays Again. I’ve posted this before but it’s really worth reiterating 'cause it’s quite interesting.
When the Milwaukee Road emerged from bankruptcy, they did something unusual from an investment perspective.
The Company paid off their debts by issuing a bunch of preferred shares. What made these shares unusual was that they had voting rights whereas most preferred shares don’t.
It was stipulated in the stock sale that if the Company failed to pay the dividends on these shares for more than two consecutive quarters, the preferred shareholders had the right to call a meeting of the board and oust the management.
This was something like a “poison pill” that helped destroy the Company. Top level management and board members naturally would go to any ends to keep their jobs so when money began to get tight in the late 1950s, they started taking money out of track maintenance to keep paying the dividends. The New York Central and the Pennsy and later Penn Central made a similar error although those were not preferred shares with those kinds of voting rights in that case.
As business continued to deteriorate, it turned into a vicious cycle. It became more and more difficult to find money to pay the dividends with and finally they were performing virtually NO maintenance west of the Twin Cities.
Presumably, management erroneously assumed that railroad troubles in the post World War II era would be temporary and fleeting. Alas, they were not. America came dangerously close to losing our privately owned rail system. In the end there was somewhat of a happy ending but not for the Milwaukee or the Rock Island line.
There is nothing wrong with it and I made no such statement. I stated they had a propensity to use it which I should have said use almost exclusively and crowding out new car purchases.
I’m not going to read that, you know why? You can google the history of the Anaconda mining company and not a single mention of the Milwaukee Road or any Anaconda mining interest driving the company to build the PCE. If was true and not just one persons opinion, it would be part of the written history of Anaconda Mining or at least of Montana…nowhere to be found.
Butte, Anaconda and Pacific is still running today and happily using BNSF and UP. Haven’t seen any online complaints about their rates or operation.
https://www.up.com/customers/shortline/profiles_a-c/bap/index.htm
I think I know how this whole thing got started. There is a grain of truth in it but, well, lemme explain.
According to Thomas Ploss there was a manager who was high mucka-muck at the Milwaukee Road while the PCE was abuilding. He had a conflict of interest since he also owned a lot of stock in the copper company. This guy (I don’t have his name in front of me) was the one responsible for buying a lot of the wire and hardware for the electrification.
Well, guess what? The copper company charged the Milwaukee Road rates that were far, far above normal so that this guy could pocket some of that money.
But did the Milwaukee own the copper company or vice versa? I dont’ believe so.
My experience is that there is a LOT of history that does not show up in a google search. I’m also a bit skeptical of corporate histories, e.g. McDonalds saying that the first store was in Illinois while in reality the first store was in San Bernardino.
Stan Johnson wrote that Anaconda was pretty much taken over by William Rockefeller and Henry Roger by the time that plans were first being made for the PCE, who also had connections with the directors of the Milwaukee Road. Anaconda was also interested in increasing the market for copper and railroad electrification was thought to be a significant new market for copper - the Milwaukee used several thousand tons.
FWIW, BNSF has not served Butte or Anaconda for several decades as it is MRL territory. The fact that BNSF was giving good service to that area in the 70’s does not necessarily mean that the NP was giving good service in the 1900-1905 time frame.
One final comment - Why the PCE was built is a different question than whether or not the PCE should have been built.
A tiny drop in the bucket given the nationwide interurban building craze sponsored by Edison’s apprentice…Samuel Insull to use surplus electricity with the various Insull lines and power utilities and construction of Interurban lines across the country.
Milwaukee went with electrification as part of the tail end of that promotional craze at that time as well as it saw cheap hydro power as a solution to fix the complications of using steam power in extreme cold weather in the mountains. It had to change out steam power every x amount of miles so changing out electrical power less often was looked at as improvement in operations.
So I view the electrification in the historical context of the promotion of electrification and not the promotion of copper.
Your again mistaken on whom BAP interchanges with. It interchanges with BNSF at Butte and Silver Bow, MT…which maybe ex-NP but the line is owned by BNSF not MRL and BNSF is listed at the interchange railroad not MRL. You can even see it on the BNSF map located here. I initially thought it would have been very shortsighted of BNSF Management to turn over one of the largest mineral areas in the United States to MRL and so that is what prompted me to look.
BNSF retained all rights to Butte, MT including the line ownership and some distance outwards from that city. Also, still not buying into the theory they were unhappy with NP rates. They were unhappy with one railroad in MT and that is why they built the BAP to begin with. They had the money to extend the BAP anywhere they wanted…why would they push Milwaukee to build for them, does not make any sense. Also they had an interchange with UP which you really only need one competitor NOT two, to lower rates. Further most of the unrefined ore an
If that’s the Henry Huttleston Rogers I think it’s supposed to be, you might look at the nearly-contemporary Virginian electrification for similarities and differences…
BN leased the Butte-Garrison line to the Montana Western about the time the mine closeed in the '80, but then got it back in the early 2000s. I would imagine they retained trackage rights and first right of refusal.
This view is almost entirely incorrect.
But, to “know that” requires an educated understanding of “what happened.”
That education can be found in the “Max Lowenthal Archive” at the University of Minnesota, and in the transcripts of testimony taken in the Senate hearings held in 1925-1926, about which Lowenthal wrote his book, “The Investor Pays” in 1933.
I spoke with Max Lowenthal in 197
I assisted Stan Johnson with that book, and wrote the Forward. Meticulously researched and well written, it is well worth the read. Never discount the usefulness of a viewpoint and a history infomed by eduction and experience.
Best regards, Michael Sol
I read in a history about John Rockefeller that he was involved in financing the Milwaukee Road’s extension. IIRC, it said the line was to be built to Everett, Wa.
John D. Rockefeller rarely got involved in William’s various investments. However, he did make a significant exception for the Pacific Coast Extension, and invested $7 million in it, upon the advice of his personal financial advisor. See, Confidential Letter, re: Analysis of Milwaukee Road, H.E. Cooper to John D. Rockefeller, November 6, 1908.
Note: this is how “real” history is done.
Best regards, Michael Sol
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[quote user=“TRR”]
John D. Rockefeller rarely got involved in William’s various investments. However, he did make a significant exception for the Pacific Coast Extension, and invested $7 million in it, upon the advice of his personal financial advisor. See, Confidential Letter, re: Analysis of Milwaukee Road, H.E. Cooper to John D. Rockefeller, November 6, 1908. Note: this is how “real” history is done.
Except that the John D. Rockefeller in question is John D. Rockefeller JUNIOR (see end of letter), a nephew of William Rockefeller. So as far as I can see, JDR Senior had no investment in this railroad.
Whose history? We have all the meeting minutes of the railroad in the Milwaukee Public Library collection. Why on earth would I travel to read up on a conspiracy theory with no evidence in the public record. What your alleging is completely illegal and the individuals involved could have been prosecuted for it because at a minimum it should have been recorded in the public record (no citation by you), Further it would have been available to bankruptcy trustees of the railroad since the PCE and related expenses were cited as reasons for bankruptcy…yet evidence on the decision making leading to it was suppressed (never mentioned by any bankruptcy trustee or presented as evidence to get more favorable reorg terms).
The biggest part of the story which makes me think it is all untrue is Anaconda Copper rarely contracted with Milwaukee Road for haulage, preferring NP and GN and even more so, most of Anaconda’s ore haulage wa
The letter was “cc:d” to John D. Rockefeller, Jr. The original is addressed to “Senior.”
Upon a closer re-reading I see you are right. My apologies.
Upon a still closer re-reading you would find that, indeed, the memo was addressed solely to JDR Jr, as was the following note.
Cooper references in the latter that, in the interim between the two, JDR Jr. had told him he was forwarding the memo to his father.
The concern, therefore, is to research whether there is any record of that communication between Jr. and Sr., or subsequent action on Sr.'s part to purchase stock (whether or not inspired by the memo or any further inquiry or research into the opportunity). While Mr. Sol is probably not as avid a Rockefeller scholar as he is a PCE one, this information might already be known in secondary materials or railroad correspondence, and it might be interesting to see if there is evidence in William’s contemporary correspondence too.