Curt Ripley, the bearded engineer and vice president of operations for Dakota Rail, pulled on the whistle cord in the cab of the 1959 locomotive as it rolled through the downtown area of this snow-shrouded Midwestern town.
The sonorous wail of the blue and orange engine, bearing the logo of a charging buffalo, was a welcome sound to the townspeople of Hutchinson, population 10,000. The 44-mile rail line that served their town was abandoned by Burlington Northern last September, only to be revived Dec. 1 by the newly formed Dakota Rail Line.
Ripley, 34, picked up the phone in the locomotive and called Robin Henrichs, 31, vice president of marketing, at her desk in the Hutchinson depot.
"Will you please give me a hand and pull the switch out front?" Ripley asked. "I'm picking up that tank car and the caboose."
Business Is Booming
The marketing executive grabbed her coat and walked briskly through six-inch-deep snow--in high heels--to the switch and promptLY pulled its lever.
"We're quite versatile around here," she said. "Mostly I work in the office, but sometimes they draft me to be brakeman, sometimes to be switchman. I don't run the trains or put in the ties. Not yet, anyway."
The independent short-line railroad business is booming as major railroads cease operating on unprofitable, short-run tracks and smaller companies form to continue rail service that is vital to farming and other enterprises.
John Dow, 60, vice president of the 73-year-old Washington-based American Short Line Railroad Assn., said the organization has grown to 290 members from 200 a decade ago. There are about 400 short-line railroads in the United States, a quarter of them owned by larger railroads and not members of the association, Dow said.
"Lots of small railroads . . . would have folded if it were not for railroads like the Dakota Line coming in to take up the slack," Dow said. When rail lines have been closed and service not resumed, farmers and other businessmen have been forced to ship their goods by truck, which, in the case of grain farmers, usually costs more.
The Interstate Commerce Commission considers a short line any railroad generating less than $17 million in annual revenue. Some short lines are less than a mile in length; others have almost 300 miles of track. Short lines average 25 to 30 miles and revenue of $1 million.
Handful Owned by Individuals
"Independent short lines are helping the transportation industry continue operations over lines no longer profitable for large carriers," Dow said. "The smaller companies are able to succeed by managing on a more personalized and efficient basis."
Many short lines are owned by shippers and by paper, lumber and steel companies, but a handful are owned by individuals like Jerome D. (Jerry) Ross, Dakota Rail's president.
Ross, 56, a third-generation railroader, began a career on the rails as a teen-ager by shoveling coal on steam engines on the defunct Chicago, Milwaukee & St. Paul Railroad, known in the Midwest by its "Milwaukee Road" nickname.
In the Army during the Korean War,
he became a railroad engineer, running ammunition trains from Seoul to Taejon. He returned to the Chicago, Milwaukee & St. Paul line and worked as an engineer from 1956 until 1982, when he quit to become president of his own railroad.
That was the year that the Chicago, Milwaukee & St. Paul company abandoned its 38-mile Milbank-to-Sisseton line in South Dakota. Ross organized a company and paid $606,000 to the railroad for the tracks, stations, all assets and 756 acres of land. In two months, he had Dakota Rail trains operating on the line.
"I just could not see shutting that line down. There were too many grain farmers from miles around dependent upon the railroad to ship their crops to market," Ross said, noting that shipping costs for grain farmers are generally cheaper by train than by truck. Dakota Rail connects with the Burlington Northern's main line at Milbank, and Milbank and Sisseton are important shipping points for barley, a big crop on the northeastern South Dakota prairie, along with wheat, oats and rye.
The track purchased by Ross dated back to the 1890s and was decaying, with miles of old ties and 27 rotting trestles. Ross brought it up to today's standards, and in its first year Dakota Rail moved 168,000 tons of grain on 2,400 rail cars. The railroad had $1.4 million in revenue for the year ended June 30, 1983.
Farm Economy Slumps
"We made $75,000 profit after putting $400,000 into the rehabilitation of the line that first year; that included laying 11,000 new ties (and) strengthening the roadbed with 32,000 tons of crushed rock," he said.
However, the farm economy nose dived, and last year the number of rail cars carrying grain fell to 900, revenue sank to $425,000 and Dakota Rail hovered at the break-even point. So far this year, business has improved, Ross said.
Dakota Rail received a $927,000 federal grant from the Federal Railroad Administration, administered by the state, to upgrade the line.
While Ross revitalized the short line in South Dakota, farmers and industrialists in the Minnesota towns of Hutchinson, Silverlake, Lester Prairie, New Germany, Mayer, St. Bonifacious, Mound, Spring Park and Wayzata, to the west of Minneapolis, were trying to save their railroad.
When Burlington Northern announced that it was abandoning the 44-mile line serving those nine small towns, former Rep. Ancher Nelsen, 81, a Republican who rePresented the area from 1959 to 1975, headed a group to keep the trains running. His wife, Elvern, 73, was the organization's corresponding secretary.
"We kept our eye on Jerry Ross and his operation in South Dakota. We negotiated a deal with Burlington Northern to let Ross come in on a five-year plan," explained Nelsen. He proudly noted that one of Dakota Rail's cabooses was named in honor of his wife and himself, though his wife's name is misspelled as Alvern on the rail car.
Dakota Rail was offered the right-of-way from Hutchinson to Wayzata for $100 a year, with the provision that at the end of five years the short line would pay Burlington Northern $2 million for the route, stations along the track and 1,000 acres of land.
If Dakota Rail is unable to meet the payment, the line will revert back to Burlington Northern.
First Train Ran Dec. 1
Ross moved his corporate headquarters into the Hutchinson depot in November, and on Dec. 1 Dakota Rail ran its first train in Minnesota. Now Dakota Rail has two divisions, the Western division in South Dakota and the Little Crow division in Minnesota, 130 miles apart.
One engine operates on a South Dakota line and two on the Minnesota line, and Dakota Rail has a total of nine employees who double up in duties. When one division is busier than the other, railroad crews commute across state line in a car caravan to keep the trains rolling.
Dakota Rail also has four passenger rail cars, and Ross plans to run commuter passenger trains on the Minnesota run within three to five years, providing rapid transit service to those living in the country who work in the city.
"We're getting both divisions on track," said Ross, whose wife, Evelyn, is Dakota Rail's secretary-treasurer. "We expect both to make money. Neither line is going to fail. I don't do things to fail."