The Chicago, Milwaukee, St. Paul & Pacific Railroad, (the Milwaukee Road) first appeared as the Milwaukee and Waukesha Railroad when incorporated in 1847, but soon changed its name to the Milwaukee and Mississippi. After several name changes, the road became known as The Milwaukee Road.
In the 1890s, the Milwaukee's directors increasingly felt that they had to extend the railroad to the Pacific in order to remain competitive with other roads. A survey in 1901 estimated costs to build to the Pacific Northwest as $45 million. In 1905, the board approved the Pacific Extension, now estimated at $60 million. It was an expensive route, however, since the Milwaukee, receiving few land grants, had to buy most of the land or acquire smaller railroads. In addition, the five mountain ranges that had to be crossed. The completion of 2,300 miles of railroad in only three years was a major feat.
The Milwaukee soon found that operation of steam locomotives over the mountain passes was difficult with winter temperatures that reached -40°F. Electrification seemed to be the answer, especially with abundant hydro-electric power in the mountains and a ready source of copper on-line at Anaconda, Montana. Of course, the colder the weather, the more efficient electrical power actually is! In 1914, electrification began between Harlowton, Montana and Avery, Idaho. In 1917, the board approved the construction of a separate electrified district between Othello and Tacoma, Washington, which was extended to Seattle in 1927. The two electrified districts were never connected, but a total of 656 route-miles (1,056 km) of railroad were electrified, making it the largest electrified railroad in the US.
The electrification was successful from an engineering and operational standpoint, but the cost of building the Puget Sound Extension and electrification had cost $257 million, not the $45 million the road had originally budgeted for reaching the Pacific. The debt load and reduced revenues brought the road to bankruptcy in 1925. The railroad was re-organized as the Chicago, Milwaukee, St. Paul and Pacific Railroad Company in January 1928 and officially adopted the familiar trade name The Milwaukee Road.
The company had hardly a chance to make anything of its fresh start before the Great Depression hit. The road again filed for bankruptcy in 1935. The Milwaukee operated under trusteeship until December 1, 1945.
Relative success followed the war. The railroad dieselized in the mid 1950s, replacing most steam locomotives by 1955 and retiring the last in 1957. Other modernizations included modern freight yards. In association with Union Pacific Railroad, the Milwaukee took over operations of the "Cities" — the City of Los Angeles, the City of San Francisco, the City of Denver, the City of Portland, as well as the all-coach Challenger from the Chicago and North Western Railway.
During the 1960s railroad mergers had to be approved by the Interstate Commerce Commission and in 1969 the ICC effectively blocked the merger with the Chicago and North Western Railway (C&NW) that the Milwaukee Road had counted on and had been planning for since 1964. The ICC asked for terms that the C&NW was not willing to agree to. The merger of the "Hill Lines" — the Northern Pacific, the Great Northern, and the Burlington Route, as well as the Spokane, Portland & Seattle Railway — was approved at around the same time, and the merged Burlington Northern came into being on March 3, 1970, completely surrounding the Milwaukee Road.
Almost immediately after the BN merger, the owners of the C&NW offered to sell the railroad to the Milwaukee outright. The Milwaukee board rejected the offer, even though it would have given them what they had wanted throughout most of the previous decade, stating that they now believed only merger with a larger system — not a slightly smaller one — could save the railroad. Almost immediately, the road filed with the ICC to be included in the Union Pacific merger with the Chicago, Rock Island and Pacific Railroad. Nothing came of this, or other attempts to force the Milwaukee into other mergers against the desires of the other participants.
In February 1973, and against the advice of studies conducted by both the railroad and independent groups, the Milwaukee decided to scrap its electrification scheme. The board of directors considered the electrification scheme an impediment to its merger and consolidation plans, and that the money required to maintain it would be better spent elsewhere. The high copper prices of time, and the $10 million the railroad estimated it would get for selling off the copper overhead wire, contributed to the decision.
The surveys had found that an investment of $39 million could have closed the "gap" between the two electrified districts, bought new locomotives, and upgraded the electrical equipment all along the line. Furthermore, the displaced diesel locomotives could have been used elsewhere and thus reduced the requirement to purchase new, reducing the true cost of the plan to only $18 million. General Electric even proposed underwriting the financing because of the railroad's financial position. Rejecting this, the railroad dismantled its electrification just as the 1973 oil crisis took hold. By 1974, when the electrification was shut down, the electric locomotives operated at half the cost of the diesels that replaced them. Worse, the railroad had to spend $39 million, as much as the GE-sponsored revitalization plan, to buy more diesel locomotives to replace the electrics, and only received $5 million for the copper scrap since prices had fallen. The badly-maintained track, which was the part of the system most in need of renewal, was never touched.
Things did not get much better after the electrification was dismantled. By 1977, much of the Pacific Extension was under slow orders due to the condition of the track, and transit times had almost tripled. Cars needing repair were being sidelined for lack of money, and locomotives needing major service were being parked. The road filed for bankruptcy for the third time on December 19, 1977.
The bankruptcy resulted in the Milwaukee abandoning the Pacific Extension completely in 1980 and restructuring as a small regional line, which was eventually taken over by the Soo Line Railroad in 1985. The ICC's auditors discovered later (too late, as it were) that for some reason the Pacific Extension's expenses had been double-entered during most of the 1970s. Far from the unprofitable boat-anchor the railroad and the bankruptcy trustees said it was, the ICC found that the Pacific Extension had been returning a profit to the railroad even through 1977 and 1978, at which time traffic was severely down due to the road's problems. Thanks to Wikipedia.com. For more about the Milwaukee Road go to Milwaukee Road on Wikipedia.