CHICAGO AND GREAT WESTERN RAILWAY
Through mergers and new construction, the railroad, named Chicago Great Western after 1892, soon became a multi-state carrier. It competed against several other more well-established railroads in the same territory and used innovation and efficiency to survive. Nicknamed the "Corn Belt Route" because of its operating area in the midwestern United States, the railroad was sometimes called the "Lucky Strike Road," because of the similarity in design between the herald of the CGW and the logo used for Lucky Strike cigarettes.
In 1854, the Legislature of the Territory of Minnesota chartered the Minnesota and Northwestern Railroad (M&NW) to be built between Lake Superior, Minneapolis and Dubuque, Iowa. Construction did not proceed, however, until it was purchased by Stickney and another investor in 1883. By 1886 a line between St. Paul, Minnesota and Dubuque had been built.
By 1888, not only had the railroad changed its name to the Chicago, St. Paul and Kansas City Railroad (CStP&KC), it had finished a continuous line all the way across Illinois to Forest Park, Illinois, except for trackage rights with the Illinois Central across the MISSISSIPPI RIVER. At Forest Park, the railroad made a connection with the ancestor of the Baltimore and Ohio Chicago Terminal for the last nine miles into Chicago's Grand Central Station. The new construction included Illinois' longest railway bore, the Winston Tunnel, south of Galena.
Through merger and construction, the CStP&KC added lines between Oelwein, Iowa, on the Chicago-to-St. Paul mainline, and Kansas City, Missouri, by 1891, and between Oelwein and Omaha, Nebraska by 1903. Oelwein became the hub of the railroad, and its main locomotive repair shops were soon located there.
The railroad survived the Panic of 1893 to become the Chicago Great Western. It soon developed a reputation for being an innovative and progressive competitor for traffic. The Panic of 1907, however, forced it into bankruptcy; the road was purchased by investors connected to J. P. Morgan. Samuel Morse Felton, Jr. took over from Stickney in 1909. Felton realized that the railroad could not survive without an ambitious effort to innovate and modernize. New rails, new locomotives, and gasoline-powered motorcars replaced steam power on the lightly used passenger trains.
Felton retired in 1929 because of poor health. In 1935 the railroad declared bankruptcy again. It was reorganized and re-emerged in 1941. The Great Western reduced passenger service, abandoned branch lines and refurbished main lines, and continued the purchase of huge locomotives which pulled enormous trains, sometimes one-hundred cars long or longer. A very important innovation was the "Piggyback Service" which the Great Western introduced in 1936 by moving several hundred truck trailers on specially modified flat cars. The Great Western was also an early advocate of diesel power. It purchased its first diesel-electric locomotive, an 800 horsepower (600 kW) yard switcher from Westinghouse, in 1934. By 1950 the CGW was completely diesel-powered.
A group of businessmen friendly to William N. Deramus, Jr., president of the Kansas City Southern, purchased a controlling share of Great Western stock, and by 1949, appointed Deramus' son, William N. Deramus III, to head the railroad. He continued the modernization and cost-trimming. Under Deramus, passenger service was almost entirely eliminated, and the railroad's offices were consolidated in Oelwein, Iowa. Even longer trains than before became standard operating procedure. This slowed service but increased efficiency.
Upon his resignation, Deramus was replaced by Edward T. Reidy. Innovations continued to keep the company profitable. Second-generation diesel locomotives found their way into the system. The Oelwein Shops stayed busy repairing and maintaining the older units long after many other railroads had replaced theirs with newer models. Passenger service, reduced to two St. Paul to Omaha trains, was gone by 1962. Labor costs were reduced and branch lines abandoned, as the Great Western remained financially strong enough to be considered for merger.
After merger and abandonment, some Chicago Great Western trackage and infrastructure remains in service. Long sections of former CGW rights-of-way have been preserved as rail trails, such as the Great Western Trail between Villa Park and Sycamore, Illinois, the Cannon Valley Trail between Red Wing and Cannon Falls, Minnesota, the Sakatah Singing Hills State Trail between Faribault and Mankato, Minnesota, and the HERITAGE TRAIL between Dubuque and Dyersville, Iowa.