Minneapolis and St. Louis Railway

Minneapolis and St. Louis Railway
Company type	Railroad
Industry	Rail transport
Founded	May 26, 1870; 156 years ago in Minneapolis, Minnesota, U.S.
Founder	Washburns, Crosbys, and Pillsburys
Defunct	1960
Fate	Purchased by Chicago and North Western Railway
Headquarters	Minneapolis, United States
Area served	Illinois, Iowa, Minnesota, South Dakota
Key people	Benjamin W. Heineman (chairman), Max Swiren (chairman), Albert Schroeder (president)
Products	Freight and passenger rail transport

The Minneapolis and St. Louis Railway (M&StL) was a Class I railroad that operated from 1870 until 1960, with its headquarters located in Minneapolis, Minnesota. It established rail lines extending southward and westward from Minneapolis, primarily serving regions within Illinois, Iowa, Minnesota, and South Dakota. Despite its designation, the railway never directly reached St. Louis, although its North Star Limited passenger route provided a connection to the city via the Wabash Railroad.

The railway’s main corridors connected Minneapolis with Peoria, Illinois and stretched into eastern South Dakota, also covering areas in north-central Iowa and south-central Minnesota. Founded in 1870 by prominent Minneapolis flour mill operators—the Washburns, Crosbys, and Pillsburys—the railway was created to secure dependable transportation for wheat and flour shipments without depending on railroads based in Milwaukee and Chicago. By 1880, it had extended its line southward to Albert Lea, Minnesota and leased the St. Paul and Duluth Railroad to gain access to shipping routes on the Great Lakes as well as lumber transport markets.

Focusing mainly on agricultural goods and lumber, the M&StL's operations were consistently challenged by relatively low traffic volumes, which led to financial difficulties and bankruptcy protection between 1923 and 1943. In 1956, the railway reported freight revenues amounting to 1.55 billion net ton-miles and passenger revenue totaling 2 million passenger-miles over 1,397 route-miles (or 1,748 track-miles), excluding the 117-mile Minnesota Western line. The company was ultimately purchased by the Chicago and North Western Railway in 1960, after which much of its network was discontinued.

Origins

Founded on May 26, 1870 by Minnesota investors including influential flour milling entrepreneurs, the M&StL aimed to establish a direct rail link between Minneapolis—then a major flour milling hub—and southern agricultural areas. This initiative was part of a broader strategy to control the transportation of wheat inbound and flour outbound. As wheat production shifted northwestward into South Dakota, the railway expanded by acquiring and building additional lines to strengthen its role in agricultural freight transportation.

Development in the 19th century

The railroad's principal route extended south from the Twin Cities into Iowa and eastward toward Peoria, passing through key traffic centers such as Mason City, Iowa. This routing provided a competitive edge by enabling freight destined for Illinois to avoid transit through Chicago.

Throughout Iowa, M&StL operated several branch lines as well as a route into South Dakota. The railroad entered receivership during the 1880s when interests linked to the Rock Island gained control. By 1889, M&StL managed the western division of the Wisconsin, Minnesota & Pacific (WM&P) line running from Morton, Minnesota to Watertown, South Dakota. After emerging from receivership in the mid-1890s, M&StL acquired this WM&P segment outright in 1899 and linked its western and southern mainlines at Hopkins, creating an integrated system. The 1890s also saw construction of the Southwestern branch stretching from Winthrop through southern Minnesota to Storm Lake, Iowa—including a notable bridge spanning the Little Sioux River near Sioux Rapids.

In 1901, M&StL merged with its affiliate company, the Iowa Central Railway, which had been established in 1866. By 1916, this consolidated network had stabilized and began absorbing smaller railroads to broaden its market reach.

20th century

The railroad stimulated commercial expansion by offering affordable land to farmers and founding towns that served as key shipping centers. During L. F. Day’s tenure as vice president and general manager starting in 1905, new routes were added, extending service to 35 communities by 1910. Nevertheless, certain towns such as LeBeau, South Dakota, which were planned as centers for cattle and grain trade, did not prosper due to competition and local calamities.

Following World War I, M&StL faced financial difficulties largely attributed to mismanagement under the USRA during federal oversight. By 1923, the company entered receivership again under William Bremner but lacked the capital necessary for modernization or restructuring. Although a merger involving Great Northern Railway (GN) and Northern Pacific Railway (NP) was approved in 1927, it was ultimately abandoned when GN and NP refused to relinquish profitable assets.

During the Great Depression, multiple railroads formed Associated Railways to explore dismantling M&StL. In 1935, Lucian Sprague took over as receiver and implemented austerity measures including cutting less profitable lines—reducing Iowa trackage by 17%—and liquidating scrap materials. These initiatives enhanced financial stability, culminating in a successful reorganization between 1942 and 1943 that ended the receivership period.

The post-World War II economic boom capitalized on M&StL’s strategic position as a bridge connecting western and eastern markets. However, in 1953–54, corporate raider Benjamin W. Heineman initiated a takeover campaign against Chairman and President Sprague. This shareholder dispute led to Sprague’s removal, underscoring the complexities of leadership during times of corporate growth and competitive pressures.

Heineman at the helm

Benjamin W. Heineman, a corporate raider with significant financial resources from his business ventures, had no intention of managing M&StL as a traditional railroad operation. His primary objective was to enhance shareholder returns, which enabled him to prevail in the contest against Sprague. Most shareholders of M&StL were distant investors based in the East, whom Heineman persuaded that fresh leadership would increase their investment’s value. He was convinced that mergers offered superior financial rewards compared to ongoing railroad operations.

Toledo, Peoria & Western

Shortly after assuming control, Heineman recognized M&StL’s potential as an independent entity due to its modern fleet, absence of bonded debt, profitability, and steady dividend payments since 1943. The company pursued acquisition of the Toledo, Peoria & Western (TP&W) during 1954–55 to expand eastward and establish connections with major railroads such as the Pennsylvania Railroad (PRR), Nickel Plate Road, and Santa Fe Railroad. However, Heineman’s aggressive approach alienated TP&W shareholders. Additionally, PRR and Santa Fe opposed the takeover because Heineman was simultaneously acquiring stock in Monon Railroad; they ultimately purchased TP&W themselves at $140 per share. Disappointed by this outcome, Heineman departed for C&NW in 1956 after securing control there.

Minnesota Western

Following Heineman’s exit, M&StL acquired the Minnesota Western Railroad (MW), which succeeded the Luce Line Railroad in central Minnesota. This acquisition aimed to promote industrial growth but resulted in limited increases in traffic and earnings. In 1960, MW was rebranded as Minneapolis Industrial Railway to emphasize its industrial orientation; nonetheless, only a single piece of rolling stock displayed the updated branding.

Integration with C&NW

By 1960, despite intensifying competition from trucking and barge transport cutting into its freight business, M&StL maintained financial stability. In April of that year, Chairman Max Swiren and President Albert Schroeder revealed intentions for M&StL to merge with the Chicago and North Western Railway (C&NW), effectively restoring control to Heineman, subject to regulatory and board consent. This transaction was finalized on November 1, 1960.

Remaining independent throughout the 1960s was improbable for M&StL due to ongoing industry consolidations and the loss of bridge traffic triggered by mergers such as the Hill Lines in 1970 and Burlington Northern (BN). Additionally, reductions in less-than-carload shipments further impaired the company’s viability. The failure to acquire TP&W represented a major strategic setback that could have influenced its future direction or merger partner. Ultimately, Swiren and Schroeder concluded that merging was essential to safeguard shareholder interests and divested the company at its highest valuation point.

Subsequent period along the M&StL

By 1963, long-distance freight had largely shifted onto former C&NW routes, resulting in extensive abandonment of M&StL track segments during the late 1960s and 1970s. The Milwaukee Western (MW) line was dismantled in two phases between 1968 and 1970. Ralph Budd’s 1927 forecast that M&StL would not endure proved prescient; although it survived until 1960, it became one of the early victims of railroad industry mergers during the mid-20th century. This development marked the conclusion of its independent operations and led to near-complete discontinuation of its infrastructure.

Current status of the M&StL

Presently, only a handful of short sections of the original M&StL network remain operational. In Minnesota, ownership of the line stretching from Norwood Young America to Hanley Falls belongs to the Minnesota Valley Regional Railroad Authority, with operations managed by Minnesota Prairie Line, an affiliate of Twin Cities & Western. The track segment extending from Hanley Falls to Madison is under BNSF Railway control. Union Pacific (UP) operates the Montgomery Spur, which runs from Merriam Junction near Shakopee to Montgomery. The Minneapolis Industrial Railway west of Interstate 494 was entirely abandoned by 1970; however, a portion endures as UP’s Golden Valley Industrial Lead. After a trestle collapse in 2007, the Chaska Industrial Lead was abandoned and subsequently sold by UP to local authorities for future use in transportation and recreational projects.

In Iowa, UP maintains operations on lines between Mallard and Grand Junction; Northwood through Mason City to Rockwell; and Marshalltown to Eddyville. The Iowa Pacific Railroad route connecting Steamboat Rock to Marshalltown was removed in 2015. Canadian National (CN), which owns former Illinois Central tracks, operated a short spur northward from Ackley until the early 2000s; however, access beyond Geneva has been severed due to track removal. Most of the M&StL’s Mississippi River bridge linking Keithsburg, Illinois, and Oakville, Iowa remains intact.

Passenger operations

Although primarily focused on freight, M&StL maintained limited passenger services. Its network configuration did not support competitive long-haul passenger routes against larger railroads. The premier passenger train was the North Star Limited, which ran from Minneapolis to Albia over M&StL tracks before continuing onward to St. Louis via Wabash Railroad; this service ended in 1935.

By 1951, several passenger routes were still active: from Twin Cities to Albia; Oskaloosa eastbound to Peoria (operated as a mixed train with layover at Monmouth); Twin Cities westward to Watertown, South Dakota; and Twin Cities southbound to Des Moines.

Beginning in 1929, M&StL introduced gas-electric railcars—self-propelled units combining baggage/mail compartments with passenger seating—that handled most passenger operations. In 1957, two Budd Rail Diesel Cars were acquired for service between Minneapolis and Des Moines but were sold within a year due to unsatisfactory performance.

Throughout the 1950s, passenger service declined considerably amid decreasing mail, express, and passenger revenues. The final M&StL passenger trains—numbers 13 and 14 operating between Minneapolis and Watertown—were discontinued on July 20, 1960.

Company Presidents

Henry T. Welles: 1870–1872
William D. Washburn: 1872–1882
Ransom R. Cable: 1882–1888
William Haynes Truesdale: 1888–1894
William L. Bull: 1894–1897
Edwin Hawley: 1897–1912
Newman Erb: 1912–1916
Edward L. Brown: 1916–1917
William H. Bremner: 1917–1934
Lucian Sprague: 1935–1954
John W. Devins: 1954–1956
Albert Schroeder: 1956–1960

Surviving Equipment

Locomotive	Type	Built	Status
234	ALCO RS1	1951	Held by West Coast Railway Association in Squamish, BC; displayed in Great Northern #182 livery.
457	2-8-0 "Consolidation"	1912	Exhibited in Mason City, Iowa.
471	2-8-0 "Consolidation"	1910	Displayed at Janesville, Minnesota; formerly Iowa Central #429.
D-538	EMD NW1	1938	Part of the National Railroad Museum collection in Green Bay, Wisconsin.
D-742	GE 44-T	1942	Preserved by Southern Michigan Railroad Society in Clinton, Michigan; painted as D&M #10.
702	EMD GP9	1958	Owned by National Railway Equipment and leased to Heart of Georgia Railroad.
707	EMD GP9	1958	Property of Eastern Illinois Railroad Company.
710	EMD GP9	1958	Owned by Napa Valley Wine Train.
852	EMD SD7	1952	Held by Agtegra Cooperative located in Mellette, South Dakota.

External links

Chicago & North Western Historical Society (archived)