UP Overhead Traffic Shift Away From C&NW

When I worked on BN, the oldheads used to talk about the GI trains, which were eastern connections for the UP. I have seen on various threads that UP pulled their business away from C&NW. The freight went to the CB&Q, while the passenger trains were routed via the Milwaukee. The big question; why was this done? Did it have anything to do with both UP and Northwestern fighting each other to merge the Rock? When did this happen?

Possibly related to this topic, when UP was making an attempt to merge with the Rock Island in 1963, did they move their freight traffic on the the Rock Island east of Omaha?

From a few things I have heard or read over the years, the UP had a falling out with Heineman (CNW) because of the UP/RI merger. Heineman in response to the proposed UP/RI merger proposed a CNW/RI/MILW merger instead. After Heineman's departure Provo patched up relations.

From an interview of Kenefick, a former UP president. While the merger was dragging on in the early 1970s, the UP approached the RI about becoming "best friends" at Council Bluffs and Kansas City. If the RI would've agreed to stop soliciting traffic thru Denver or Tucumcari/Santa Rosa, the UP would've "poured" (Kenefick's word) enough traffic thru CB and KC to make the RI profitiable. For whatever reason, the RI declined. Provo at the CNW approached the UP and agreed to the UP's terms.

While the merger was going on, the UP really didn't try to influence traffic to be routed via it's would be merger partner. One lament that I read was that UP wouldn't even specify RI routing on UP company material coming from the east. The UP did finance some rolling stock (engines, cabooses and freight cars) and maybe some new welded rail in the late 1960s. Other than that, it was almost like the UP's interest in the merger was half-hearted.

JLH

A complex, confused relationship between UP, Milw, RI, and CB&Q.
According to conventional thinking, the decision by UP to cut CNW out of the UP interline passenger operation was because of failure by CNW to maintain their mainline track. The trains were promoted as UP trains. They were painted as UP trains. When the passengers were knocked off their feet on CNW track, it was the UP that caught the public's ire.

Ben Heinemann was the Darth Vader of Granger Railroads (can I say that here?). His concept of competition was to buy your competitor and shut him down, employees and public be damned.

I remember reading that the Milwaukee management was excited when Milwaukee got the passenger business between Omaha and Chicago with the UP. They were expecting the freight business to follow.

For some reason I still don't understand, that didn't happen. Maybe it was because the Milwaukee managed to miss all the big cities in Iowa, while both CNW and RI served them. Maybe Gilbert can shed some light on this.

The CB&Q could not be the main Omaha-Chicago carrier for UP, because CB&Q was probably UP's biggest competitor. Only the CB&Q had a straight-shot main line all its own between Chicago and Denver. CB&Q had a tremendous presence in Denver, including its own Denver-based subsidiary, C&S.
The GI trains were trains interchanged between UP and CB&Q at Grand Island, NE. Grand Island was definitely a UP town. It was UP's major mainline yard before Bailey Yard was built at North Platte. CB&Q at Grand Island consisted of a secondary, single-track mainline that crossed the UP double track main. The CB&Q line ran between Lincoln and Alliance, Nebraska.

The CB&Q line crossed the UP at Grand Island on a grade-level crossing that was a headache for both railroads. Now the BNSF line crosses the UP on an overpass on a regraded main line. The CB&Q passenger station sits where the line used to run at street level, and is now a museum. There is still an interchange track, but it sees little use. I worked out of Grand Island in 2007 and 2008. The UP station, of course, has been bulldozed.

In the time since the passenger trains went to the Milwaukee Road, the CNW main line across Iowa was allowed to continue to deteriorate. The double track Chicago-Omaha main was replaced with single track.

The UP continually propped up the RI, probably in self-defense (against the CNW). When I worked for the RI, the UP held the title on our newer power. They also did motive power deals with the RI. When the UP went to trade in old power to EMD on new units, they actually traded in worn out RI units. The would-be trade ins from UP were then sent to RI. EMD didn't care, they were all obsolete as far as they were concerned. But UP could actually maintain their older units, so it was a step up for RI. I remember riding in the cab of an ex-UP F9 on the RI that was still in UP colors. UP also sold RI some surplus E units.

Milwaukee Road's primary interchange partner for transcon freight was ATSF. ATSF, of course, was the arch-competitor of UP outside of the Granger sphere.
As the eighties wore on, Milwaukee's Chicago-Omaha traffic fell. Milw had no place to go beyond Omaha. Meanwhile, RI's Omaha-Chicago main line was purchased by Iowa Interstate, bankrolled by on-line customer Pella Rollscreen.

Anyway, as I understand what happened, things came to a head when CNW track conditions hurt freight business on UP. UP gave an ultimatum to CNW. If CNW would not upgrade its Chicago-Omaha mainline, UP was going to make a bid to buy Iowa Interstate and bypass CNW all together.

The result of this was the CNW was forced to reinstall its Chicago-Omaha double-track mainline, with money borrowed from UP. This then led to CNW's acquisition by UP.

The Milwaukee Road's Chicago-Omaha mainline is now gone. The CNW tried to buy the Milwaukee Road, and thought they had it sewn up. But at the last moment, SOO Line, backed by CP Rail's deep pockets, bought the Milwaukee.

Les

One additional point: The UP applied to the ICC for permission to merge with the RI. It took the ICC TEN YEARS to come to a decision! By the time the ICC decided it would be OK to merge, the RI had deteriorated to the point the UP didn't want it any more.

Just another thing that would have changed if the Staggers Act had come in the 1970's.

Les

Only a portion of the CNW's double track was ripped up. From Denison, IA to Missouri Valley, IA. (Council Bluffs to Missouri Valley had been single tracked earlier, IIRC in the 1940s.) The UP has replaced the Denison/Mo Valley section. UP Also has converted the line to CTC from the Chicago area west.
JLH

Desertdweller wrote:A complex, confused relationship between UP, Milw, RI, and CB&Q.

...

Ben Heinemann was the Darth Vader of Granger Railroads (can I say that here?). His concept of competition was to buy your competitor and shut him down, employees and public be damned.

...

The Milwaukee Road's Chicago-Omaha mainline is now gone. The CNW tried to buy the Milwaukee Road, and thought they had it sewn up. But at the last moment, SOO Line, backed by CP Rail's deep pockets, bought the Milwaukee.

Les

I hope you don't mind if I removed most of your post, to concentrate on these three points.

Definitely a complicated relationship between the C&NW and the other four lines, yes. I've read (in this trainweb article by Todd Jones) that after the ICC refused permission for the C&NW-MILW merger, Heinemann actually offered the entire C&NW for sale to the Milwaukee. Even more mind-boggling, the Milwaukee's board of directors refused the offer! Is that true, or was the possibility of a CM&NW overstated?

As for the MILW Chicago-Omaha mainline, when was that torn up entirely? I was under the impression that it was abandoned during the Milwaukee II restructuring, and most of it was either torn up or taken over by the BN and C&NW by the mid-1980s.

mtuandrew wrote:

Desertdweller wrote:A complex, confused relationship between UP, Milw, RI, and CB&Q.

...

Ben Heinemann was the Darth Vader of Granger Railroads (can I say that here?). His concept of competition was to buy your competitor and shut him down, employees and public be damned.

...

The Milwaukee Road's Chicago-Omaha mainline is now gone. The CNW tried to buy the Milwaukee Road, and thought they had it sewn up. But at the last moment, SOO Line, backed by CP Rail's deep pockets, bought the Milwaukee.

Les

I hope you don't mind if I removed most of your post, to concentrate on these three points.

Definitely a complicated relationship between the C&NW and the other four lines, yes. I've read (in this trainweb article by Todd Jones) that after the ICC refused permission for the C&NW-MILW merger, Heinemann actually offered the entire C&NW for sale to the Milwaukee. Even more mind-boggling, the Milwaukee's board of directors refused the offer! Is that true, or was the possibility of a CM&NW overstated?

As for the MILW Chicago-Omaha mainline, when was that torn up entirely? I was under the impression that it was abandoned during the Milwaukee II restructuring, and most of it was either torn up or taken over by the BN and C&NW by the mid-1980s.

Nothing wrong with calling Heinemann as he was. The man originated on the M&StL, and honestly, would the Louie, Great Western, and other odd roads acquired have survived as competitive entities if they weren't acquired? Even if the potential was there, the management talent and regulatory structure probably weren't. And Heinemann lost interest in railroading ca. 1970, finding other businesses in Northwest Industries more profitable--hence selling the railroad to the employees. That transaction was a last-ditch effort because no other investor would consider it worthwhile, but the employees found the company more valuable alive than dead (for understandable reasons). Elsewhere, I've heard the management made out because every manager was obligated to buy at least $10k in stock to keep their jobs, being told that if they didn't have the money to go borrow it!

Desertdweller, this is the first time I've ever heard that UP had complaints about C&NW track/service on the overland route. Can you give more detail? The short segment of double track that was missing didn't get rebuilt until after the acquisition. IIRC, although UP had been buying stock in C&NW for a while, the acquisition happened in '95 due to UP having a wad of financing available from, I think, a failed run at acquiring SP. Of course, it didn't take long for that acquisition to happen anyway.

What would have happened if UP had successfully merged with CRI&P? Where would the C&NW had gone? Would the UP had also looked at Missouri Pacific? Could MP assemble their own western merger to include both MILW and C&NW? Where would the SP connection at Tucumcari, NM be today? Would UP have kept most of the other Rock Island routes also?

I cannot provide you with documentation on my statement that UP was fed up with CNW's service. But I do remember at the time they had threatened to make a bid on Iowa Interstate for that reason.

UP was always hampered by its lack of direct access to Chicago. Buying Iowa Interstate would have solved that, and I can only presume UP figured they could acquire Iowa Interstate for considerably less than CNW would have cost.

This was not the first time UP had been burned by CNW. The move of the passenger trains from CNW to Milwaukee was a direct result of CNW's poor performance.

Would M&StL and CGW have survived if CNW had not purchased them? Despite CNW's arguements to the ICC in making the case for buying these roads, they wound up being destroyed by the CNW after purchase. The M&StL became a Minneapolis shop facility and a handful of lightly-used branch lines. The CGW was reduced to the Olwien shop and the Des Moines-Kansas City main line. So these two railroads did not survive acquisition by CNW.

If they could have remained independent until the Staggers Act, they may have been able to survive as regionals.

What would have happened if UP had merged with CRI&P when it first wanted to? Hard to say. I think it would have maybe spelled the end for both MILW and CNW on the Chicago-Omaha traffic. When President Lincoln designated Council Bluffs instead of Chicago for the starting point of the Pacific Railroad, it resulted in massive overbuilding in Iowa. The western railroads all felt obligated to build their own main lines across Iowa to keep Council Bluffs-Chicago traffic on their own rails. Some rationalization was needed. When I was in elementary school in Iowa, we were taught that one could not go more than seven miles in any direction, anywhere in the state, without crossing a railroad. While I now think that was something of a stretch, it was not far from the truth. I think it is safe to say the UP would have used the Rock Island's Omaha main. The Rock Island was the first railroad to build across Iowa, thus getting the best route and connecting the most large cities.

The Golden State Route Chicago-Tucumcari would have given the UP a straight shot to the Southwest, shorter than via the LA&StL. This would have enabled them to better compete with rival Santa Fe if they could have maintained a friendly relation with SP. And they already had a good relationship: witness the interline traffic Ogden-San Francisco.

Acquisition of CRI&P would have given UP access to areas they did not serve at the time: Oklahoma, Texas, Louisiana, Iowa, Minnesota. They may have been able to get by without buying MP and MKT if they had gotten the Rock.

MP maybe should have concentrated on buying the other western Gould roads: D&RGW and WP. With C&EI, it would have given them their own Chicago-San Francisco route. With D&RGW in MP, SP would have made a good partner for UP. I think these end-to-end mergers would have been better for the country than the parallel route mergers we wound up with.

Les

In what order were the lines built between Council Bluffs and Chicago. Wasn't RI first, then came which railroad after that? Why did MILW build to Council Bluffs? Weren't they looking at St. Paul as their big market. MILW had two other lines, one in Southern Minnesota and the other in Northern Iowa that were parallel to it. Of all of the routes, MILW's Council Bluffs lines is the only one that did not survive. Where did all of the traffic on this line go to, C&NW, RI, or CB&Q?

I don't know the order the lines were built across Iowa in. But I do know Rock Island was the first.

Iowa City was the state capital before Des Moines was. The Rock served both. It had the most trackage in Iowa of any railroad. It also had north-south lines: KC to Minneapolis via Des Moines; Iowa Falls to Sioux Falls; Davenport to Muscatine. And branches all over.

The Omaha main predated the UP. I suppose progress into Nebraska was curtailed by the Civil War, and the knowledge that the Federal Government was sponsoring a mainline across Nebraska that RI did not want to compete with (at least, initially).

Other railroads that built across Iowa to Omaha were C&NW, IC, MILW, and CB&Q.

Like RI, MILW was early into Iowa. Their first main line into Iowa (when it was known as the "St. Paul") ran from Chicago to Madison, WI. Then west to Prairie Du Chien, At PDC, the line crossed the Mississippi River on a pontoon bridge, then continued into Iowa to Calmar. At Calmar, it turned north, to Albert Lea MN, Owatonna, and St. Paul. Their line to Milwaukee is what is now their Twin Cities Main, but it ended at LaCrosse. LaCrosse was a rail-to-water transfer until the Mississippi River was bridged there in 1890. I suppose their Omaha line was an effort to get in on the UP traffic. I suspect it was built fairly late, as it misses all major Iowa cities.

Where did the Milwaukee's Omaha line traffic go? I don't know, but there aren't many places it could have gone. My best guess is C&NW. CB&Q had their own heavy-duty Denver Main. IC was not a big player in Omaha-Chicago traffic. RI had its own main lines to Colorado and New Mexico.

Les

The Milwaukee's bridge at LaCrosse, WI was completed in late November 1876.

What would have happened if, in the 1970s that Milwaukee had decided to take up Heineman's offer and to sell the C&NW to Milwaukee? Would the C&NW-MILW combined system have produced a profitable system? Would C&NW or MILW's Omaha line be handling primarily coal traffic today? Would UP have made a try to get MILW's Omaha line or even go after Rock Island east of Omaha?

The RI was not the first to cross Iowa. The CNW reached Council Bluffs first, I think the Q (CB&Q) was second and the RI a close third. (RI reached Council Bluffs on May 11, 1869, the day after Promentory.) The MILW built across in the 1880s.

The UP bought the option on the IAIS at the time when the CNW was facing a hostile takeover. UP helped CNW fend off the investors and part of the deal gave the UP options to run their trains with their own crews over the CNW if performance fell below a certain standard. That never happened, but it brought the two that much closer.

JLH