There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. The former companies are called “fallen flags.” The term describes those companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.
This FreightWaves Classics article provides an overview of the Chicago and North Western Railway (reporting mark CNW), a Class I railroad in the Midwest. At its peak the “North Western” operated more than 12,000 miles of track in seven states before it began to shrink in the late 1970s. The company became the Chicago and North Western Transportation Company in 1972, when the railroad’s employees purchased the company.
The C&NW controlled so much trackage through mergers with and/or acquisitions of other railroads (such as the Chicago Great Western Railway, the Minneapolis and St. Louis Railway and others). By 1995, track sales and abandonment had reduced the Northwestern’s total trackage to about 5,000 miles. Most of the abandoned and sold lines were lightly used branch lines in Illinois, Iowa, Minnesota, South Dakota and Wisconsin.
The railroad also sold major trunk lines, such as the sale that helped build the Dakota, Minnesota and Eastern Railroad. By the mid-1990s, the C&NW had been streamlined to a key railroad with several regional feeders and branches. Then in April 1995 the Union Pacific Railroad (UP) bought the C&NW and integrated it with its existing operations.
Beginnings
On June 7, 1859 the Chicago and North Western Railway was chartered. This was only five days after its owners purchased the bankrupt Chicago, St. Paul and Fond du Lac Railroad. Then it was merged with the Galena and Chicago Union Railroad on February 15, 1865 (the day that President Lincoln died). Because the Galena & Chicago Union began operations in December 1848, it is considered to be the beginning of the North Western railroad system.
A number of other acquisitions occurred before 1900. These included: the Winona and St. Peter Railroad in 1867; the Sioux City and Pacific Railroad in 1880; the Fremont, Elkhorn and Missouri Valley Railroad in 1884; and the Milwaukee, Lake Shore and Western Railway in 1893. The railroad also acquired extensive land holdings in Michigan, particularly in the state’s Upper Peninsula.
1900-1950
The railroad constructed potato sheds in the Chicago area; at one point they were the country’s largest repository of potatoes. Potatoes from the western U.S. were a key commodity hauled by the C&NW, as were sugar beets, corn and wheat. However, the railroad, because it depended on the transportation of crops, was hurt by government agricultural credit policies in the 1930s.
The C&NW declared bankruptcy in 1935; after nine years it was reorganized and exited bankruptcy in 1944. During the late 1920s and throughout the 1930s it had switched over to diesel-powered locomotives. It established a major diesel shop complex in suburban Chicago. The Proviso Freight Yard was built between 1926 and 1929 and was the largest of its type in the world. It had 224 miles of track and the capacity to handle more than 20,000 railcars.
In 1938 the C&NW was ranked sixteenth among major U.S. railroads in operating revenue, but was ranked eighth in passenger revenue. This was due primarily to Chicago commuters; it had 400 streamliner trains that provided intercity transportation. The railroad also provided an eastern link to bring Union Pacific passengers from Omaha, Nebraska and points west to Chicago. This key connection in Omaha went back to 1882; the North Western had owned a majority of the Chicago, St. Paul, Minneapolis and Omaha Railway’s stock since that time.
Changing traffic patterns and competition with automobiles and trucking had a negative impact on many railroads’ profitability by World War II. The war was a two-edged sword; it helped and hurt many railroads. They carried massive amounts of war materiel and moved military personnel and civilians around the country, but quite a few were literally run into the ground at the same time because of deferred maintenance and overuse.
Post-war to 1968
The North Western acquired a number of key short railroads after 1950. It acquired the Litchfield and Madison Railway on January 1, 1958. This railroad’s track was only 44 miles, but it bridged a key route from East St. Louis to Litchfield, Illinois.
On November 1, 1960, the North Western acquired the rail properties of the 1,500-mile Minneapolis and St. Louis Railway, gaining rail traffic and modern railcars while eliminating a competitor.
On July 30, 1968, The C&NW acquired two former interurban railroads in Iowa on July 30, 1968 – the Des Moines and Central Iowa Railway as well as the Fort Dodge, Des Moines and Southern Railway. The former gave the C&NW rail access to a Firestone tire manufacturing plant in Des Moines; the latter provided rail access to gypsum mills in Fort Dodge.
1968-1984
A major acquisition took place on July 1, 1968, when the Chicago Great Western Railway merged with the North Western. The Chicago Great Western ran between Chicago and Oelwein, Iowa. It had rail lines from Oelwein to the key cities of Minneapolis-St. Paul, Omaha and Kansas City, Missouri. It also had a connecting rail line from Hayfield, Minnesota, to Clarion, Iowa, which was a main line between Minneapolis and Omaha. While much of the Chicago Great Western track duplicated the North Western’s routes from Chicago to Minneapolis-St. Paul and Omaha, the merger provided the C&NW access to Kansas City – and eliminated another competitor.
Benjamin W. Heineman had led the C&NW and its parent (Northwest Industries) since 1956. He had developed and then abandoned plans to merge the C&NW and the Milwaukee Road in 1970; then in 1972 he arranged the sale of the railroad to its employees. The railroad was renamed the Chicago and North Western Transportation Company at that time; however, its reporting marks (CNW) did not change.
The 1970s were a very difficult time for most U.S. railroads. The Chicago, Rock Island and Pacific Railroad (known as the Rock Island) stopped operations on March 31, 1980. The North Western and the Soo Line Railroad both sought to purchase the Rock Island and its 600-mile “Spine Line” between Kansas City and Minneapolis-St. Paul via Des Moines. The Interstate Commerce Commission (ICC) was still regulating the railroads at that time; it approved North Western’s offer of $93 million on June 20, 1983.
Because the Rock Island had deferred maintenance on its track and rolling stock, it needed a major investment for repairs in 1984. Concurrently the C&NW began the process to abandon the former Great Western track between Oelwein and Kansas City, which was duplicative after the acquisition of the Rock Island.
The last decade: 1985 to 1995
The CNW Corporation was formed in 1985 to acquire the Chicago and North Western Transportation Company; at that time the employee-owned stock was transferred to the new CNW Corporation.
Then Blackstone Capital Partners, L.P. formed the Chicago and North Western Acquisition Corporation to purchase the CNW Corporation in 1988. Blackstone Capital Partners controlled the CNW Corporation and the Chicago and North Western Transportation Company under the Chicago and North Western Acquisition Corporation subsidiary. This was followed by the formation of the Chicago and North Western Holdings Corporation. The Chicago and North Western Acquisition Corporation and the CNW Corporation were merged into the Chicago and North Western Holdings Corporation in February 1994.
Fourteen months later (April 1995), Union Pacific Corporation acquired the C&NW and it became a subsidiary named UP Rail. Then the Union Pacific Corporation merged UP Rail into the Union Pacific Railroad; the Chicago and North Western railroad system became part of the Union Pacific Railroad system.
Post-C&NW
Over the decades the Union Pacific has acquired numerous railroads. It began a tradition to release “Heritage” locomotive units painted with colors of railroads that had been absorbed into the Union Pacific system.
A heritage C&NW locomotive was unveiled on July 15, 2006, at the Ogilvie Transportation Center in Chicago, which formerly was known as North Western Station. The station is now Union Pacific’s Metra terminus for three lines (Union Pacific/West Line, Union Pacific/Northwest Line and Union Pacific/North Line).
The Chicago & North Western Railway once served much of the heartland of the United States. Its network of more than 11,000 route miles spread across Illinois, Iowa, Michigan, Missouri, Nebraska, North Dakota, South Dakota, Wisconsin and Wyoming.
Like many fallen flags, it is gone but not forgotten…
Information and photographs/images for this article came from the American Rails website (www.american-rails.com), which is a treasure trove of information! FreightWaves thanks Adam Burns and American Rails!
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