CP's Purchase of MILW in 1980s

In the 1980s, what was the motivation for CP's purchase of MILW? They already had a line to Chicago via the old Soo Line; what was wrong with it? If CP wanted access to Kansas City, couldn't they had considered purchasing the northern portion of the Rock Island instead? Rock Island would have given them access to Kansas City and Omaha from the Twin Cities and Chicago, with the southern end of the Rock Island going to Southern Pacific. Dollars spent on MILW to not only purchase it but also to rebuild it could have been spent to enhance their existing Soo Line trackage along with improvements to the Rock Island as well. The big question: What did CP really gain by getting the MILW?

CPF363 wrote:In the 1980s, what was the motivation for CP's purchase of MILW? They already had a line to Chicago via the old Soo Line; what was wrong with it? If CP wanted access to Kansas City, couldn't they had considered purchasing the northern portion of the Rock Island instead? Rock Island would have given them access to Kansas City and Omaha from the Twin Cities and Chicago, with the southern end of the Rock Island going to Southern Pacific. Dollars spent on MILW to not only purchase it but also to rebuild it could have been spent to enhance their existing Soo Line trackage along with improvements to the Rock Island as well. The big question: What did CP really gain by getting the MILW?

Firstly, Soo Line Railway, rather than CP Rail System. Though CP held most of the stock, they primarily allowed Soo to do what it needed to do. In fact, I understand that the MILW purchase was one of the driving factors for CP to start exerting more control over the Soo.

The CN, ex-WC, ex-Soo, nee-WC Ry. line to Chicago is the most roundabout line still extant between Chicago and the Twin Cities. That, and the collection of Soo lines in northern Wisconsin had and has a fairly low traffic density, unlike the Milwaukee with plenty of online shippers and a much, much shorter and less heavily-graded line between the two metropolitan areas.

The Soo Line did try to purchase the Spine Line from St. Paul to Kansas City, and IMO that would have put them in a much better position to compete with the UP and BNSF. Less duplicate track to sell, a much more direct path, etc. However, the C&NW won that prize. For whatever reason either the Soo didn't try to gain the parallel C&NW-owned CGW/M&StL route as a condition of the merger, or it was unable to do so - those lines, by themselves or in combination with the MILW system, would have created a relatively direct MSP-KC line.

MILW's purchase gained Soo a line with more potential earnings per mile than their Lake State Transportation Division, as well as a much more direct and better-graded path to Chicago from the Pacific Northwest. It also forestalled a MILW purchase by the Grand Trunk Western, in other words CN, and kept their Iron Lariat from encircling Lake Superior for another twenty years.

I believe the reason the SOO Line bought the Milwaukee Road was to prevent it from falling into the hands of their rival, the C&NW.
The two railroads were involved in a bidding war for the Milwaukee.

The C&NW thought they had the deal in the bag, to the point that the C&NW Signal Dept. was re-wiring the MILW stations to CNW signal standards.

I was delighted to see the SOO Line wind up with my old railroad.

The C&NW had control of the ex-RI Spine Line by then, and were not about to release it to anyone else. In fact, the acquisition of the Twin Cities-Kansas City route was a primary reason for the takeover of the Chicago Great Western in 1968 by the CNW.

By the time the Rock folded, their Spine Line was considered by the C&NW to be preferable to their own KC line. I don't know if it was on account of track conditions on the RI line (doubtful), or to keep the Spine Lines from falling into the hands of a competitor (more likely).

C&NW strategy since the M&StL takeover of 1960 was to establish a monopoly by buying and scrapping competing lines. If a victim had a better route than C&NW itself, it would be incorporated into the C&NW and the C&NW line on that route would be abandoned. This was real Robber Baron mentality, but that was C&NW's game. It is the fault of the ICC for repeatedly allowing this to happen.

Les

Why is most amazing is that CP, or the Soo line, did not bound all of the traffic originating on the WC to its own system or control its connections. How did CN buy WC and start running their trains over it? Wouldn't Soo prohibit interchanges with other railroads without going through itself? Seems that CN was easily able to connect the DWP to the GTW without dealing at all with the Soo Line. Conrail, spun off some of its Connecticut lines to Rail America subsidiary called Connecticut Southern (CSOR). They also own the New England Central RR (NECR), but these two lines do not interchange any traffic. When Conrail was broken up between CSXT and NS, NECR tried to get some of the CSOR traffic to no avail; all CSOR traffic goes to CSXT now. So if Conrail could tie these short lines to itself without interchanges to other railroads, why couldn't Soo do the same thing with the WC, essentially blocking CN from buying their old line?

The CSOR at the time I worked for it, at least (2005) had interchange at Hartford with Providence and Worcester. Our interchange track with them was a spur off a line called "The Weatherfield Main".

We also interchanged with another short line, whose name I cannot recall, at Windsor Hill. This was a line that was a continuation of our own line up the east side of the Connecticut River. At one time, it went all the way to Springfield, MA.

This other short line had an ancient RS1. One of our customers in Hartford would sometimes lease it, and we would carry it in our train from Windsor Hill to Hartford and back.

Les

CPF363 wrote:Why is most amazing is that CP, or the Soo line, did not bound all of the traffic originating on the WC to its own system or control its connections.

WCL got around the Soo Line barrier to Interchange with the DW&P by buying the C&NW line from Cameron, WI to Superior, WI. With this they didn't need the Soo Line trackage to reach the Twin Ports. Fortunately the Soo Line had a clause that forced the WCL to also buy their line. WCL combined the two lines using the best of both parts, connecting them together at Gordon, WI about in the middle. The north end is former C&NW, while the southern part is ex-Soo nee- original WC.

Desertdweller wrote:I believe the reason the SOO Line bought the Milwaukee Road was to prevent it from falling into the hands of their rival, the C&NW.
The two railroads were involved in a bidding war for the Milwaukee.

True - the GTW had the first bid on the Milwaukee, I believe, but the North Western and the Soo had the highest and second-highest respectively. Long story there too, involving the North Western crying foul when its higher bid was rejected.

I think the only way a C&NW purchase of the MILW would have made sense post-PCE abandonment would be without one of the Chicago - Milwaukee mainlines (sold to Amtrak or the Soo Line), without one of the Milwaukee - Tomah lines (sold/leased to the Soo or BN, with rights to St. Paul or La Crosse respectively), without the C&NW purchasing the Spine Line or other significant Rock mainlines, and with trackage rights from Milwaukee to St. Paul and Duluth given to another major carrier. That's not to mention the significant amount of secondary mainline and branch track that would have needed to go to Class IIs and IIIs.

I think the Milwaukee's Chicago-Twin Cities main line was in better shape than C&NW's. It was used by AMTRAK, and served more important cities.

If C&NW had gotten MILW's Twin Cities main, I suspect the C&NW main Janesville-Twin Cities would have been abandoned or sold.
MILW already had a Chicago-Madison main line (part of the original Chicago-Twin Cities main). Also, I suspect the C&NW Chicago-Milwaukee main would have been abandoned in favor of the Milwaukee's.

The Milwaukee's Pacific Coast Extension (PCE) went where the C&NW wanted to go but couldn't. The intended C&NW PCE line was not the Winona-Rapid City main (that became the DM&E), but was rather the Cowboy Line through northern Nebraska. This line had a branch to Rapid City via Chadron, NE, but its real route was to Lander WY via Casper. At Lander, they were but a few miles short of a route to South Pass, a route that was used by USS, but separated by impassable grades. Was this the result of poor location work? Who knows?

Les

Just to back up a little, pre-NAFTA in the nineties, US railroads and other companies had to be primarily owned by US investors. CP owned I believe the largest stake in the Soo Line, but they could only own 49.9%, the 50.1% "majority" had to be US owners / investors. So although CP had a lot to say in what the Soo did, they didn't own it outright.

BTW the reason the railroad I grew up with, the Minneapolis Northfield and Southern, is gone is because the Soo was so sure they were going to get the old Rock Island "spine line" in the Rock bankruptcy sell-off that they bought the MNS to connect the Soo to the spine line. The Rock only came up to Northfield MN or a little beyond on their own line, then used trackage rights to reach Mpls-St.Paul. The MN&S ran from a Rock Island connection to the south, thru the western suburbs of Minneapolis and up to Soo's Shoreham yard north of downtown Minneapolis.

Yes, I miss the MN&S (the Monkeynuts).

They really had some neat equipment back in the 70's, and, from my experience, were very railfan-friendly.

I have in my collection a brochure put out by MN&S predecessor Dan Patch Lines. It was intended to convince potential investors to buy stock in what was intended to be an interurban and electric freight railroad.

Les