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De-electrification

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 (equal to $52,353,823 today), contributed to the decision.

The surveys had found that an investment of $39 million (equal to $204,000,000 today) 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.