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A Railroad Not to Be - The Hayfield Northern

By Jerry Huddleston

One minute past midnight on July 1, 1968, the Chicago Great Western ceased to exist as an autonomous railroad. Hayfield, Minnesota had been an important junction for the CGW; however, under new Chicago & North Western management, its status was quickly downgraded. In 1981 the C&NW filed an application with the Interstate Commerce Commission seeking permission to abandon the Hayfield line between Oelwein, Iowa and Randolph, Minnesota, a total of 146 miles. In opposition, a year later, a group of shippers formed the Hayfield Northern Railroad Co. to preserve rail service for the Minnesota communities of Hayfield, Waltham, and Sargeant. The once busy CGW junction of Hayfield would then have to take its case to the United States Supreme Court to try and retain rail service.

In the year before the merger, Hayfield was located on the busiest section of CGW trackage and was host to several long daily freights. The CGW had stationed two Alco's at the two-stall engine facility in Hayfield. The Alco's were mostly used for the Hormel turn to Austin, Minnesota about 17 miles south of Hayfield. Many of the F-units that frequented the line were also serviced at Hayfield. Refers from Hormel in Austin were sent north to Hayfield, and from there coupled on trains headed for Chicago or Kansas City, via Oelwein. The last passenger train rolled north through Hayfield on September 30, 1965.

In the year after the merger, the C&NW dramatically reduced train movements on the Hayfield line. The C&NW had said from the beginning of the merger negotiations that they had only wanted the Kansas City extension of the CGW and that the rest of the system was viewed as expendable. Their actions were fully consistent with that belief. The first merger economy was realized when track from Waltham to Austin was taken out of service and the Austin job was handled from the south, at Mason City, Iowa. In Illinois, track was taken out of service from Aiken to Byron. The C&NW main ran barely thirty miles to the south and this track elimination was considered another merger economy. As a result, the Hayfield line now saw only Twin Cities to Kansas City freight - the Chicago and Omaha traffic was eliminated entirely from the line.

The Hayfield line became part of the C&NW Missouri Division. The Missouri Division gained notoriety as a rolling museum for former CGW F-units and second hand F-units which the C&NW had purchased in the early 1970s and had rebuilt at the Oelwein System Shop.

The Hayfield line was one of two C&NW north-south secondary main lines in Minnesota, the former Minneapolis & St. Louis line being the other. Neither of these two lines had heavy through traffic and being strapped with the maintenance costs associated with both lines, the C&NW chose to give the Louie line priority resulting in a steady decline in the physical condition of the Hayfield line. Maintenance was done only when absolutely required. The Hayfield line was still useful to the C&NW to haul grain to Kansas City, as long as the track conditions would permit, but the Hayfield line was soon ground to pieces under the weight of heavy grain trains. By 1981 the track condition had deteriorated so badly that track speed on many portions of the line was only 10 mph, causing operational costs for the C&NW to skyrocket.

The facilities on the Hayfield line fared even worse than the maintenance program for the track. By 1972, New Hampton, Iowa was the only train order station left open between Dodge Center, Minnesota, and Oelwein. The Dodge Center depot was one of the sheet metal stations built during CGW's modernization program in the 1950s. The Dodge Center depot remains today and is currently used by the Dakota, Minnesota, and Eastern for storage. The Hayfield depot was sold to a private party a few years after the merger, and subsequently demolished. The Sargeant and Waltham depots were also demolished. The two-stall engine facility at Hayfield built in 1961 survived and was sold to Century Plastics in 1971. Century Plastics made several additions to the structure so that it could be utilized as a factory.

The death knell was sounded for the Hayfield line in March of 1980 when the Interstate Commerce Commission authorized interim operations over portions of the bankrupt Rock Island. The C&NW began leasing the former Rock Island property between the Twin Cities and Kansas City along with associated grain branch lines, a total of 720 miles. This route was shorter and better engineered than the former CGW route between the same two cities and was later purchased by the C&NW in June 1983 for 93 million dollars. The fate of the Hayfield line was sealed.

On January 30, 1981 the C&NW filed an application with the ICC seeking permission to abandon 146 miles of track between Randolph and Oelwein. The C&NW maintained that continued operation of the line imposed serious financial strain on its resources. An administrative law judge conferred and ruled that the C&NW was entitled to abandon the property. A group of shippers then organized and opposed abandonment of 19.2 miles of track from Dodge Center to Hayfield, Waltham, and Sargeant. The shippers group and the C&NW were unable to come to terms as to the disposition of the trackage. Then in accordance with the Staggers Rail Act of 1980, the ICC calculated that the shippers group could retain rail service for a $300,000 annual subsidy, or purchase the line outright for 1.8 million dollars. The shippers group was dissatisfied with the ICC decision and was forced to withdraw its offer. Soon thereafter on May 20, 1981 the ICC granted a certificate of abandonment. The last revenue train traveled the 146 miles between Oelwein and Randolph on November 6, 1981.

On March 31, 1982, members of the shippers group formed the Hayfield Northern Railroad Co. to attempt to preserve rail service. The Hayfield Northern planned to use Minnesota Statute 227.27 on eminent domain to condemn the 19.2 miles of track. Their hope was to acquire the track for a more affordable condemnation price (calculated by their appraiser to be between $50,000 and $100,000), rather than the price of 1.8 million dollars set by the ICC. The Hayfield Northern filed suit in a Minnesota court and obtained a temporary restraining order on April 2, 1982 preventing the C&NW from tearing out the signals and track. C&NW track removal crews were forced to begin the 1982 season at Sargeant, where they began removing track and signals south towards Oelwein.

The C&NW immediately removed the suit to a Federal District Court and moved to dissolve the restraining order on the grounds that the Federal Staggers Rail Act of 1980 as amended, pre-empted the Minnesota condemnation statute 227.27. As noted in the House of Representatives Conference Report No. 96-1430, "the abandonment provisions of the Staggers Rail Act were to accomplish two major objectives: significantly reducing the time spent processing abandonment cases for the ICC and improving the process by which abandoned lines can be subsidized. It will assist shippers who are sincerely interested in improving rail service, while at the same time protect carriers from protracted legal proceedings which are calculated merely to tediously extend the abandonment process." In contrast to the complicated structure of the Federal Act, the Minnesota condemnation Statute 227.27 is a more straightforward application of the states' rights of eminent domain. Originally enacted in 1879 it provides "every foreign and domestic railroad shall have the power to acquire, by purchase or condemnation, all necessary roadways, spur and side tracks, rights of way, depot grounds, yards, grounds for gravel pits, machine shops, warehouses, elevators, depots, station houses, and all other structures necessary or convenient for the use, operation, or enjoyment of the road, and may make with any other railroad company, such arrangements for the use of any portion of its tracks and roadbeds as it may deem necessary."

The U. S. District Court for Minnesota Judge Paul A. Magnuson entered a summary judgment in favor of the C&NW. The Hayfield Northern was granted a stay pending appeal. The Court of Appeals for the Eighth Circuit affirmed the District Court judgment and dissolved the restraining order. Both courts held that the Minnesota condemnation statute presented an obstacle in the accomplishment of the purpose of the Federal Act.

The State of Minnesota then intervened in the case on behalf of the Hayfield Northern and assisted them in bringing their case to the Supreme Court. The state argued that it was of absolute interest to the state that rail service be continued to rural communities. Sixteen other states and the U.S. solicitor general also backed the Hayfield Northern. The case was argued February 21, 1984. On June 12, 1984 Justice Marshall delivered the opinion of the court, "The Staggers Rail Act of 1980, which amended the Interstate Commerce Act, regulates the process by which rail carriers may abandon unprofitable lines and provides a mechanism for shippers to obtain continued service by purchasing lines or subsidizing their operations. This case poses the question whether the Interstate Commerce Act, as amended, preempts a Minnesota eminent domain statute used to condemn rail property after it has been abandoned pursuant to the amendments. The Court of Appeals for the Eighth Circuit held that the Act, as amended, preempted the state statute. We disagree."

The Supreme Court sided 9-0 with the Hayfield Northern in a remarkable unanimous vote and reversed the lower courts decisions. The judgment set a new precedent by allowing states' rights priority over Federal laws. The judgment will assist many communities who attempt to preserve rail service in their area in the future.

Unfortunately the decision was too late for the Hayfield Northern. The C&NW had begun tearing up the 19.2 miles of track the Hayfield Northern had hoped to operate back on March 24, 1983 after the appellate court ruled in favor of the C&NW and had dissolved the restraining order. The C&NW had removed the 115 lb. rail and used it to satisfy contracts it had entered into with the State of Iowa and various Iowa shippers. The Hayfield Northern shippers had spent about $150,000 in legal costs and could not afford another court case to get the C&NW to put the rails back in. Bill Reese of Reese Farm Supply said that he contributed more than $25,000. "It just reached a point of diminishing returns, we had spent too much." Bill Howard was the former president of Power Span, a factory that used to make 92-foot concrete utility poles in Hayfield. "We contributed more than $60,000 because we had the most to gain from renewed rail service. The additional cost of trucking the poles to a railhead was $150 a pole." Power Span shut down partially because there's no railroad on which to ship the poles anymore. Steve Becvar of Century Plastics who contributed over $20,000 summarized feelings, "We lost a lot of money." Whatever the reason, the railroad is gone and not likely ever to be rebuilt.

The author would like to thank Jennifer Johnston and Steve Becvar for their help with this article.