The Chicago Great Western Railway

This evening I was studying a route map of the Chicago Great Western Railway for the first time.

From looking at the map, I was struck by how beautifully the CGW knit together some of the most important cities in the Midwest: Chicago, Omaha, Minneapolis-St. Paul, and Kansas City. (See the map below.)

According to the Wikipedia entry on the CGW, the railroad was a very efficient operation. It was also rid of its passenger trains by 1962. Those are two very big pluses for a 1960’s-era railroad in my mind.

For whatever reason, the CGW merged with the Chicago & Northwestern in 1968.

Naturally, I wonder: Was a merger really necessary? And could it have survived without merging?

A related question: Could it be a viable regional railroad today?

The Wikipedia entry says that the directors felt it had to merge in the 1960’s or else perish. But I wonder if that was true or just a perception; did the financials really bear that conclusion out? Here is the Wikipedia quote:

Upon the failure of a merger opportunity with the Soo Line Railroad in 1963, the board of the Great Western grew increasingly anxious about its continued viability in a consolidating railroad market. Testifying before the Interstate Commerce Commission in Chicago, President Reidy claimed, “The simple fact is that there is just too much transportation available between the principal cities we serve. The Great Western cannot long survive as an independent carrier under these conditions.”

The CGW, therefore, was open to a merger with the Chicago and North Western Railway (CNW), first proposed in 1964. After a 4-year period of opposition by other competing railroads, on July 1, 1968, the Chicago Great Western merged with Chicago and North Western.


Chicago Great Western system map:

[IMG]http://i1214.photobucket.com/albums/cc481/mytrainsaccount/cgwmap.jpg

I just noticed an earlier discussion from 2008 with some relevant commentary.

Go to thread: Ex-CGW trackage in the 70’s

I also noticed this book on the CGW: The Corn Belt Route: A History of the Chicago Great Western Railroad Company, by H. Roger Grant.

Thanks.

Consider the competition. Chicago-Omaha-C&NW, MILW, CB&Q, ROCK, IC. The UP solicited for the C&NW route and sent traffic without shipper specified routing the same way.

Chicago-Minneapolis-C&NW, SOO?, CB&Q, MILW.

Chicago-Kansas City, MILW, Rock Island and (the 800 pound gorilla in the room) Santa Fe.

As noted in the previous thread you linked, by the 1960’s the CGW was generally running only one daily through freight and local trains providing no more than one daily stop at on line businesses. As noted by MP173, they reported an OK profit in the last full year of operation, but one can infer from the train speeds and the power-FT’s- used on the through freight trains, they were probably looking at huge needs for capital expenditures that couldn’t be supported by the cash flow.

I suspect that the board looked at the capex needs and the general downward trends for rail freight traffic of the era and concluded that the sale/merger was going to produce the best result for stock and bond holders.

The SOO did have a line from Chicago to Minneapolis. I have no idea how good it was, though.

Soo System map

It’s interesting that the CGW tried to merge with the SOO. There was no duplicate trackage between the two roads except the Chicago to Minneapolis routes. The two roads served totally different regions. So that would have created a new system with impressive reach – from Winnipeg to Kansas City.

The CGW and the C&NW, on the other hand, went to all the same places. So the 1968 merger with the C&NW apparently was just a move to consolidate competition.

C&NW system map

I imagine the SOO merger was regarded as somewhat risky. But the system map of a merged CGW/SOO is intriguing.

Interesting to study the CGW map shown above. You will note that the “800 pound gorilla” (Santa Fe between Chicago and Kansas City) does not even show up on their map. Those who are informed acknowledge that Santa Fe was, and BNSF is, the dominate carrier between these cities because of its direct route, and because that segement has been maintained and improved through the years since it was created in the late 1880’s.

To take this on another tangent. There was serious talks between the SOO ,CGW and the Katy about traffic routing betwwen the Twin Cities and Texas coast. Had the that taken place then Niether railroad would have been taken over by anyone, The Three of them together would have proved too strong and would all would still be independant

The CGW routes were not all that great. The Twin Cities-Chicago routing had too many miles, and the only real connection in Chicago was the IHB. The CGW had lots of ‘terminal’ issues as they many times were the last line built. The KC line was very poorly constructed, and had terrible connections via the MP to get into town - lots of delays. The Twin Cities-Omaha line via the Hayfield cutoff actually was shorter than the Northwestern’s ‘Omaha West’ route - but traffic between those terminals has always been meager.

The CGW traffic through the 50’s was based on lots of ‘meat’ business, and local on-line business. Like most roads, that local business dried up by the 60’s(trucking), and the meat packing business model went from large integrated plants to smaller regional plants that shipped basically in their state and produced ‘boxed’ meats. The shipment of hanging sides of beef in reefers was gone, and by 1965 - those strings of Swift/Armour reefers on the head end of the Southbound time freight out of South St Paul were gone.

The failed SOO-CGW merger of 1962 left the CGW with few options. The CNW-CGW merger was just part of the overall CNW plan to combine the best parts of several Grainger roads. The CGW diesel fleet was actually in pretty good shape - the large fleet of freight F’s were being supplanted by GP30 & SD40 purchases in the 60’s.

Would a SOO-CGW merger ‘worked’? The routing looked good, but the Rock Island ‘Spine Line’ was better, and the Rock Island and the SOO worked together on Twin Cities terminal transfer operations(Rocky-Soo Transfers) as soon as the CNW-CGW merger took place. By 1970, the BN merger took place and the entire ‘connections’ map out of the Twin Cities had to be re-thought.

Jim

A question that begs asking: What if the CGW merged with the SOO and did survive? If that happened, could possibly another route have been abandoned that is now currently in use?

Great contributions, everyone.

I like that giant wye in the middle of the system (Oelwein - Clarion - Austin). At least on paper, the CGW makes a good-looking system.

I’m still asking myself, could the CGW have survived without a merger? There are definitely small midwestern roads that are viable, like the Iowa Northern today. So, I am thinking, “maybe”.

Searching the web, I found some interesting commentary on other forums:

“Chicago Great Western was a very well run and efficient railroad, often overlooked! It’s too bad it was absorbed into C&NW, which pretty much dismantled nearly everything CGW. I always thought a hookup with KCS or Santa Fe would have been better for shippers and the general public. CGW service was slow, but reliable as many of their shippers often commented on. C&NW brought changes that ultimately brought service reductions and outright elimination.”

“An end-point merger with the Santa Fe would have probably been the best, allowing Santa Fe direct access to the upper Midwest. MKT was still too weak at the time (1967) to be much of a force. KCS presented an ideal candidate and in fact was under Deramus control at the time.”

(posted by atsf3751 here)

Now, that is what you call a “locomotive” a beauty to behold.

I recall reading somewhere that CGW selected the 2-10-4 type engine because of its large firebox, which made it possible to get a train over grades without helpers. The CGW owned 36 of the 2-10-4 type: http://www.steamlocomotive.com/texas/?page=cgw

Bill Warrick produced a video several years ago entitled, “The Granger Roads” which featured some film clips and information about the Chicago Great Western and its competitors, that was aired on RFD-TV.

The main problem mentioned is that there were too many parallel railroads competing for too few customers. Lines mentioned in the video as being in direct competition with the CGW are the Santa Fe, Burlington Route, and Rock Island.

As a result of farmer complaints about alleged price fixing among the railroads, Granger Laws were passed by each state, and these laws eventually resulted in creation of the Interstate Commerce Commission.

One rail historian says in the video that at that time it was impossible to travel for 12 miles in any direction in the state of Iowa without encountering a railroad line.

In my view, the CGW’s survival as an independent would have required a substantial infusion of capital. It appears that would have required someone with deep pockets,an extremely high tolerance for risk and a lot of patience. Even though the railroad was turning a profit, just “sticking is out” probably would have found it suffering the same fate as the Rock Island, only much sooner. In terms of physical condition, it appears to have been the worst of the competing lines. Keep in mind that over the subsequent decades, the Milwaukee Road’s Omaha Line was abandoned, and both the IC’s Iowa line and the Rock Island’s Chicago-Omaha line were hanging by some very thin threads. While I concede that the latter two under their respective ownerhips of CN and Iowa Interstate seem to be doing OK, I doubt that their market share is 10% of the total movement in the Chicago-Omaha corridor.

In today’s world, a intact CGW may have found itself serving grain unit tran shippers, ethanol plants and possibly a coal fired power pant or two, and could be riding the current big wave of rail business. But then, maybe not. Even if forseen, from 1966 it would be decades before these big new markets would come to pass. That is a long time burning up cash.

Excerpt from Engineering-Contracting (1909)

The mandate has gone forth that no longer shall Chicago Great Western R.R. be known as the "Maple Leaf Route,‘’ and the emblem, the maple leaf, used for the past 15 years by this road, is disappearing from the letter heads and stationery of the company. It will also be seen no more on the box cars of the company. When the road was first organized, its owners and promoters intended to call it the Great Western, but another road, which was never built, had already been chartered under that name. The new road, however, absorbed the right of way and other property of the older road, but the charter still remained, and the nearest the owners could come was to call it the Chicago Great Western. The first emblem or nickname of the road was secured back in the latter part of the 80’s, when all the engine smokestacks were painted red, and this practice, taken in connection with the old fashioned funnel shaped stacks, was such a novelty that for several years the Chicago Great Western was known as the “Red Smokestack” road. When the old funnel shaped stacks were abandoned the company discontinued painting the stacks red and set about to secure a new nickname. About 15 years ago the company inaugurated a contest, offering a prize of $1,000 for the best emblem suggested. This prize was won by a traffic department employee, who submitted the maple leaf. The idea of the maple leaf was derived from the fact that the physical makeup of the Great We

I’m still asking myself, could the CGW have survived without a merger? There are definitely small midwestern roads that are viable, like the Iowa Northern today. So, I am thinking, “maybe”.

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With enough “ifs,” you can make anything work as a mental exercise. If CGW had somehow persevered through the ’70s, then perhaps nobody would have picked up Rock’s Iowa lines due to the additional competition, and then perhaps the traffic that’s developed of late on Iowa Northern and Iowa Interstate would instead be running on CGW. How CGW would have survived the ’70s, then the ’80s, then the ’90s, that’s hard for me to envision.

On the question of through traffic, I have difficulty envisioning anybody using CGW to get anywhere important. The BN merger put the Hill Lines traffic from the Twin Cities onto the CB&Q to get to Chicago. UP had agreements with North Western and Milwaukee to get traffic from Omaha to Chicago. SP got their own route into Chicago from KC in the early ’90s. Perhaps the biggest blow: Staggers, which ended the practice of splitting traffic up and sprinkling it among connections.

I’m just not sure these counterfactuals prove much of anything. CGW had major weaknesses, as Jim has pointed out, that made it poorly able to compete. The changing railroad environment forced the railroads to find a partner before the music stopped. Long-term traffic patterns in the Midwest were never going to justify the number of routes that existed. Something had to give. CGW gave. If it hadn’t, somebody else would have. But I suspect CGW’s weaknesses would have caused it to give out before others, even if it hadn’t merged with C&NW when it did.

Thanks for that reply, Andy.

(I made some edits to this post after re-reading your post.)

Yes, if CGW could have survived 20 or 30 years longer, then I think it would be doing well today, with business in the wind power industry, easements for transmission lines, ethanol, corn and soy. I am thinking we might see some abandoned CGW lines put back into use again to capture some of that business. I hope so.

Merging with with CGW gave the CNW access to Kanas City. When the CNW got the Rock Island’s Spine Line in the 1980’s, the CGW route to Kansas City was abandon.

If not for access to Kansas City, would the CNW have merged with the CGW?

To add to the ‘What If’s’, with the talk of the CGW merging with the SOO or surviving on its own into the post-Staggers era, was there any talk of the CGW merging with a eastern road? I would think the CGW would fit nicely in today’s CSX system, mostly for the Chicago to Minneapolis line. The CGW used B&O (now CSX) trackage rights to access Chicago from Forest Park. Maybe I’m wrong, but I would think the CGW trackage would be attractive to an eastern line wanting to extend their reach westward, particularly for intermodal business. The obstacle I see however is the low clearance, high maintenance, Winston Tunnel near Galena, IL, which was a major financial burden for the CGW. I guess we will never know.

Jeff

To survive as an independent they would have to almost totally rely on originating/terminating traffic. The consolidation of the surrounding players would’ve (and did) dry up bridge traffic. (The CN and IAIS have very little, if any bridge traffic between Chicago and Council Bluffs.) Maybe if deregulation would’ve occurred sooner and they could’ve achieved the productivity gains (reduced crews, elimination of agents/clerks, etc.) it might have been possible for them to survive to this day.

Still, a lot of the business they had isn’t there anymore. Not just lost to trucks, but gone completely. Railroads aren’t the only industries to have gone thru changes in the last 40+ years. Is what’s left (and what may have been left on lines the CNW abandoned) enough or is it too few and too far?

I think if they had stayed independent and survived to this day, the map of today would not look like the map of 1968.

Jeff