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A railroad history lesson: Union Pacific and Burlington Northern

(The following story by Henry J. Cordes appeared on the Omaha World-Herald website on November 8, 2009.)

OMAHA, Neb. You don't have to go too far into Nebraska's early history to find the first big clash between the Union Pacific and Burlington railroads. In 1875, just eight years after Nebraska achieved statehood, a Burlington affiliate was laying down tracks in eastern Nebraska. It decided to exercise a right granted by Congress to connect into Union Pacific's celebrated transcontinental line.

But according to one history, when Burlington executive Charles Perkins contacted the U.P.'s Thomas Kimball to arrange for that link near Kearney, Kimball wouldn't allow it.

Perkins sent an assistant to talk to Kimball directly and Kimball again refused, though he did offer the young emissary a job with U.P.

Undeterred, Perkins changed course - a move that would have major implications for both railroads and the state. Burlington built south into Nebraska's Republican River valley and on to Denver, ratcheting up rail competition in Nebraska and the west to a whole new level.

Etching their marks in steel across the state, the Union Pacific and Burlington railroads have helped write the history of Nebraska from its earliest days. It's a history that soon will have a new chapter, with Warren Buffett's announced intentions last week to buy BNSF Railway, the line many railroad buffs still refer to as "the Burlington."

"The railroads were absolutely essential to the economic and political history of Nebraska," said longtime Nebraska historian Fred Luebke. "And today, they are still very important."

Of course, it was U.P.'s construction of the transcontinental railroad across the state that first put Omaha and Nebraska on the map. The headquarters of the Fortune 500 company and its sprawling western network remains solidly based in the city almost a century and a half later.

The line Burlington built to Denver has continued to be a main line across the state and today is the only Nebraska track that carries rail passengers, on Amtrak's California Zephyr.

And in their race to reach new markets and battles for shipping customers, Burlington and U.P. essentially settled the frontier state.

Even today, names of Nebraska cities, counties and streets and the locations and layouts of towns can be traced to the two railroads. Perkins and Kimball Counties in Nebraska's west? Yep, some histories suggest they were named for those same rival railroad executives who clashed in 1875.

Long after those colorful beginnings, Buffett's announced intention to bring BNSF under Berkshire Hathaway's umbrella of companies gives the nation's two largest railroads even deeper ties to Omaha and Nebraska. BNSF will continue to have its headquarters in Texas though it will be completely owned by the Omaha-based Berkshire.

Buffett's bet on Burlington and its future financial prospects also underscores how important the two railroads remain to the state's economic vitality.

Union Pacific and Burlington are both among the state's largest private employers, combining for more than 12,000 Nebraska workers.

Union Pacific has 4,900 workers in the Omaha-Council Bluffs metro area, and thousands of other railroad jobs follow the two carriers' lines across the state in places such as North Platte, Morrill, Hemingford, Lincoln, Ravenna and Alliance.

Alliance, a community of roughly 8,900 people in Nebraska's Sand Hills, is the base for 1,800 good-paying Burlington jobs. The railroad operates a large locomotive maintenance and car inspection shop there, and up to 100 trains rumble through each day carrying traffic to and from Wyoming's rich Powder River coal fields.

"I couldn't imagine what Alliance would be like without the railroad," said Dan Kusek, a Burlington engineer and member of the City Council. "There wouldn't be much left here."

A Nebraska historian wrote in 1909 that describing the growth and progress of Nebraska without mention of the Union Pacific "would be like the play of Hamlet without the Prince of Denmark." And indeed, it can be argued the roots of the state's early economic growth can be traced to the railroad.

Omaha was just a dusty little frontier town when President Abraham Lincoln in 1863 designated Council Bluffs as the eastern terminus for a new cross-country rail line connecting east to west. With the stroke of a pen, Lincoln had turned Omaha into a major national rail hub.

For all railroads in the East hoping to take part in this trade, "the name of the game was to get to Omaha," said Peter Hansen, editor of the journal Railroad History. Eventually eight different railroads would build from Chicago to Omaha.

Though there is no historical marker today noting the spot, Union Pacific began work on the transcontinental line in 1865 on the site of today's Qwest Center Omaha.

The line followed the Platte River valley west across the state. By 1869, U.P. had crossed the Rockies and linked up with the Central Pacific at Promontory Summit in Utah, completing the cross-country link.

Coincidentally, in that same year, Burlington - at the time called the Chicago, Burlington and Quincy - created a sister railroad and entered Nebraska. The state was quickly becoming a new agricultural empire, and the railroad wanted to get a piece of that farm-to-market business.

Starting out at Plattsmouth, the railroad soon reached Nebraska's newly minted capital of Lincoln and established a major yard operation there. To this day, Havelock Shops in northeast Lincoln remain a vital rail maintenance station for Burlington.

Burlington continued west before the U.P. connection flap sent it south and into Denver.

A decade later, Burlington built another major line across the Sandhills into Wyoming and Montana, and both railroads built numerous branches off their main lines to reach potential customers.

In exchange for laying down tracks, the railroads received huge tracts of land. The grants of U.P. alone exceeded 5 million acres - about one-tenth of all land in Nebraska. The railroads sold the land to prospective settlers, serving the dual purpose of providing money to finance their construction while creating new customers.

Some historians have argued the land grants were far too generous, Hansen said, but they certainly served their purpose. Within three decades of statehood, Nebraska was essentially settled.

Where rail lines were laid down came to define the very geography of the state. If a town was located off the line, it wasn't uncommon for locals to pick up their homes and businesses and move. In other cases, railroads laid out the towns themselves every seven to 10 miles - about the distance a farmer going to market could travel in a day.

"Without railroads, towns just didn't amount to anything," Luebke said.

The railroads often chose the names for the towns, both sometimes using alphabetic naming systems. Look at a map of the Burlington line west of Lincoln today and you'll see these towns: Crete, Dorchester, Exeter, Fairmont, Grafton, Harvard, Inland, Juniata and Kenesaw.

Where railroads decided to place major facilities also profoundly influenced towns' economic destinies. North Platte largely owes its position as one of Nebraska's largest cities to Bailey Yard, the vast U.P. switching facility there that is said to be the world's largest.

The railroads' economic clout has helped them wield considerable political power in the state. At the end of the 19th century, Luebke said, Nebraska's two U.S. senators were sometimes referred to as its Union Pacific senator and its Burlington senator.

And over the years, as Union Pacific and Burlington merged with dozens of smaller railroads and expanded their reach, their rivalry would only grow.

During the 1930s, the two railroads raced to be the first to introduce a modern, streamlined locomotive. Each claimed victory, with U.P. coming out with the first but Burlington producing the first diesel.

In the 1980s, Union Pacific successfully fought legal battles to get in on the lucrative Wyoming coal trade that Burlington at that time largely controlled.

Then, during the 1990s, the railroads engaged in a huge bidding war over the Sante Fe. Union Pacific succeeded in bidding the price up considerably before Burlington prevailed. That battle helped precipitate Union Pacific's merger the next year with Southern Pacific.

Those mergers left the Burlington and U.P. where they are today: the nation's pre-eminent railroads, remarkably closely matched in both finances and network size, and competing fiercely in all the same major Western markets.

Industry analysts said last week that Buffett's decision to buy BNSF was an indication that both railroads have bright economic futures.

"I think it's great," said Roger Clark, a rail buff from Grand Island. "Some people take a lot of pride in Nebraska football. I always thought it was neat that two of the biggest railroads have so many facilities in Nebraska."

Monday, November 09, 2009

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