Railroad Consolidation - What should have happened?

This is a topic really for the bean counters and the operation experts but I would like to know what the railfans “in the field” think. We’ve ended up with NS and CSX in the East, and UP and BNSF in the West, with Canada still hanging on to CP and CN in the North. Plus the odd KCS and numerous regionals/shortlines. Should those consolidations/mergers have happened in other ways that may have been more beneficial to shippers, the railroads, and railfans alike? It seems that the Northeast and Midwest would have been better off if the merger movement there had centered around Pennsylvania and New York Central as the cores for separate railroads.

I’ll go out on a limb that the south and the mid-west would have fared better if the consolidation had formed around the cores of two strong, pretty well run railroads: Norfolk and Western and the Southern. One can speculate for hours on what roads should have gone into each of those. I would like to hear some opinions! Thanks.

The Georgia Observer

hindsight etc etc etc…

i think that Southern shudda had more in the upper levels of managment of NS…

i think the East shudda been a “big 2” in 1976…E-L\C&O…PC\B&O…which wudda fit N&W and SOU separately…unless you go back to 1965…then it shudda been a “big 3” NYC\B&O…PRR\C&O…E-L\RDG\N&W…unless etc etc etc…part of the problem in the east… was archaic thinking on the part of the railroaders in question…i mean the Chairmans and CEO’s coupled with a declining customer base left the soon to be bankrupt RR’s rudderless…Stuart Saunders and Robert Young excepted of course…

i think UP\SP was natural…kinda like BN in 1970…i mean Harriman basicaly built the UP\SP railroads and Hill built the GN\NP\CBQ\SPS

i think UP got to much pie…DRGW…MP…WP…CNW…mebbe UP shudda got CRIP back in the 60’s and the left rest to someone else???.. that coulda left 3 “big” lines east and 3 “big” lines west…3 corridors for truely transcon service in the 21st century

i think BNSF’s managment did great at the start…Krebs is a smart man…

the merger “woulda shudda coulda” can go back to the mid 1800’s realy…where would we be now???..watchin diesel freights

…and chasin steam

The above scenario would have left the middle to the CNW. That would have been fine with me!

[swg] sure…CNW take the “granger” lines with a DRGW\WP west coast line…snatch up a nifty MP or KCS for gulf access and WHAMO ya got a “big 3” RR under the CNW banner…[:P]

Looking at connecting Chicago to the Gulf, I’m not sure the IC-GM&O was weaker than a C&EI-L&N-ACL Florida line. THere may be other links missing in a Family Lines system.

Given the development of TVA power in KY, TN & other states, could it have been poosble for mor electrified lines like the VGN?. Could a higher speed route been developed from Chattanooga to Bristol, VA & other NE locations? Could there have been a new Southern Transcontinental to connect LA via Memphis to Savannah, Jacksonville, or some other southern port cities (norfolk?)? Feed the oil to the navy fleets??

shudda coulda wudda…[swg]

Shoulda, woulda, coulda…but a huge amount of fun in this!

I’ll see the “Big 3” and raise ya. Scroll back to, say, the late 30’s. In the NE US, six CHI-NYC trunks: PRR, NYC, B&O, Erie, NKP and WAB (each of the last two would need to merge with LV or DL&W to reach the Atlantic coast). In the west, six transcons to Pacific tidewater: AT&SF, SP, UP, MILW, GN and NP. (You might even add WP/D&RGW but I’d give the former to UP and the latter to SP.) In between, a surfiet of Granger roads to connect the two sets-surely enough to connect Chicago and Saint Louis to the jumping off points of Omaha, Tucumcari and Minneapolis (the ATSF and MILW having their own rails). Just mix and match! Presto! A half dozen trancontinental railroads.

In the SE US, how about L&N/ACL, IC/CofG/SAL and N&W/SOU(and probably FEC)?

Now, this is all look-at-a-map-and-connect-the-lines type of exercise. Traffic patterns, traditional interchange partners and a host of other factors would come to mind but the general intent of such a gouping (or something like it) would be to provide carriers that would minimize frequent interchanges of long haul traffic (which was much different in 1937 than 2007, I realize) by spanning the country and minimizing terminal delays the major cities like Chicago (since traffic going through the city would more often be under the control of one carrier) while still providing competition in the most densly populated area (the Official Classification Territiory) and on all the trancontinental routes (fewer “captive shippers”). To “equalize” the economic power or traffic base of these six lines, you might want to give the three “weaklings” the three SE US lines to “bulk up” their portfolio but that’s a whole 'nother consideration (though it might lessen Ohio River interchange delays).

One final note: I’d lump the NH, B&M, MEC and B&A into to pre-Guilford (or post-Mor

I knew I liked this guy…[:D]

The Milwaukee Road should have bought CNW and then bought out BN.

They had all the trappings of a class 1, but they acted like a regional. If only…

Canada may have wound up with two overlapping transcons, but the various events that led to the creation of one of them were not what one would call desirable.

I’ll trump you. What about the ICC plan of the 1920’s? And going from there…

greetings,

Marc Immeker

Over a 25 year period of proposals and counter-proposals, the MILW-CNW merger was consistently identified as the merger with the greatest potential benefits of any proposed North American rail merger – bar none.

Had it happened – and at one point the ICC had ordered it to happen – we would be having entirely different conversations today about “strong lines” and “leaders count” and whatnot and the supposed “inevitability” of outcomes.

The merger failed in 1955 because Ben Heineman took over the North Western and thought he could stand it on its own two feet (rails?) without the Milwaukee.

Heineman finally realized the error and came back to the table in 1963. After having been approved by the ICC, that merger failed in 1969 because one rail leader – the same Ben Heineman – got bogged down in unrelated matters and CNW’s (Northwest Industries) stock price tanked. One of those historical “accidents” that determines fates of companies – in that instance, Northwest Industries got into trouble, and the Milwaukee Road ultimately failed because of that. The butterfly effect in iron.

The third chance – the outright purchase of CNW offered to MILW by Heineman at a bargain, an absolute bargain – failed because, in Heineman’s words, William J. Quinn “would not take risks”.

The fourth chance was kiboshed in 1984 against all industry expectations by a Federal Court Judge who, according to CNW officials, “was in over his head” – and he was.

Ever since I saw a colour postcard of an EMD F unit in red with a white band storming south through snowy Oskaloosa Iowa I have been interested in de M&StL. Reading Don Hofsommers book* about the Louie leaves one with a few questions. I still wonder why Wabash or IC didn’t make a go for it in the late 50’s. Both were very active interchange partners.

GN/NP did a study in the 20’s. Of 4 possible partners for the Louie this was how they saw it:

1 M&StL with C&NW, rejected because it would lessen competition (how ironic in regard of C&NW’s policy under Heineman since 1955).

2 M&StL with IC, rejected because the ICC did not want IC extended northwest. But favourable in view of maintaining routes and channels of trade.

3 M&StL with Wabash, rejected because Wabash did not have sufficient strength to carry out acquisition.

4 M&StL with GN/NP/SP&S has more apparent advantages than any other combination suggested.

GN/NP would thus rid themselves (and the Burlington…) of a serious competitor because of the Peoria gateway.

On the thread about the 1200 trains in Chicago some proposed a belt line way out. M&StL tried to build one via it’s Peoria Gateway. Just after WW2 it was interested, in the Illinois Terminal (which would finally get it to St Louis), the Toledo, Peoria & Western and Pennsy’s Peoria - Terre Haute , Indiana line. The Louie loaned the PRR a three unit set of FT’s in 1946 for tests but nothing came of it.

Speculating about alternate history, always fun.

greetings,

Marc Immeker

  • Don L. Hofsommer, The tootin’ Louie, a history of the Minnepolis & St. Louis Railway, University of Minnesota Press 2005, ISBN 0-8166-4366-0

hillarious…ive been modeling a fictional Great Lakes Central System for 20 years in HO and now N…line runs al’la NKP St Louis/Chicago to Pittsburgh/Buffalo and in my modeled era of 1940 the LV was a subsidiary giving my as-good-as-Pennsy service a Gotham outlet [:D]

but really the ultimate “what if”…what if the South Penn was completed??? would the Pennsy still have become the giant it did???

wasnt the ICC was the USRA of the time…im diggin for the details but if i remember right it basically spilt the country into 4 pieces and put all the RR’s in each peice under quasi-public (Amtrak) control…Railroaders went bonkers crying “nationalization” and killed it…but i guess it was a close thing

I wonder how things would have worked out if Santa Fe bought the WP. Would that have set the stage for a merger with Rio Grande? Or how about SF + EL?

Yes, someone here provided me a link to the “Ripley Plan” from the 1920’s. Facinating and fun. It still left us with almost two dozen class 1’s but it’s fun to speculate what the current US railroad map would look like after moving from there!

No, no no…McMillen ABSOLUTELY made the correct choice back in early '85 in choosing the Soo Line to acquire the Milwaukee Road and NOT those CNW blood suckers. “In over his head”? I don’t think so. If anything, it was the outrageous greed and corruption at C

Well i am not an expert but i think the best combo would have ben grand trunk western and milwaukee road because it is an end to end merger. milwaukee road and soo line are more side by side in wisconsin. and in upper michigan.

Tom McMillen was always very cordial with me, and I considered him a friend of mine, but Tom McMillen, RIP, was completely out of his mind on this.

Here’s part of his opinion:

"Now, what is the matter with abandonment? Well, for one thing it costs jobs. People are going to be out of work that were working on the abandoned transportation system or routes. Another consideration that hasn’t been, really, considered very much but was mentioned by one of the Commissioners … is the matter of national security.

". … I would say that once a railroad is abandoned once a piece of trackage is pulled up and the land sold it isn’t going to be replaced. It is almost irresponsible under the international situation that we are faced with today to tear up pieces of a railroad system, which is probably the best in the world, for no better reason than a few million dollars in the bidding price.

“I must say that I think that national security is a very important consideration for keeping an extensive and more viable system of transportation …”1

The Soo Line, to its own great surprise, got the Milwaukee Road with Judge McMillen’s permission, the sale closing on February 20, 1985. The Chicago-Milwaukee Corporation, among others, appealed. The United States Court of Appeals has infrequently heaped sarcasm and scorn upon one of its own district judges, but it was obviously stunned by not only what McMillen had done, but how he justified it.

The Court summarized that the primary reason for the appeal was that the investors in the Milwaukee Road – represented primarily by the Chicago-Milwaukee Corporation – did not understand "why th