In the earlier years of railroad expansion involving middle west roads, probably no compact held greater promise of success than the agreement negotiated by the Wisconsin Central and Northern Pacific in May 1889, which provided trackage rights for the N.P. over W.C. rails between St. Paul, Ashland . and Chicago.
Sources of finance and control of both roads appeared to be centralized, converging upon a practicable design for the ultimate merger of the W.C. with the N.P. Early in l886 is seen the beginning of gradually increasing reciprocal conclusions in the matter of trains and traffic, and a ripening of managerial confederacy between the two roads.
In 1887, Charles L. Colby, Edwin H. Abbot and Colgate Hoyt, virtual owners and dictators of the Central, further cemented the relationship by joining the N.P. Board of Directors, at the same time retaining their top control positions with the Central.
On January 15, 1890, the trackage rights agreement was abandoned to clear the deck for a stronger, more comprehensive arrangement in the form of a rental-lease contract, subject to revisal every ten years, in which the N.P. guaranteed payment of 37.5% of gross earnings for the use and control of W.C. properties, effective April 1, 1890.
From the W.C. standpoint, such an arrangement with a railroad the size of the N.P. seemed to be a rich opportunity. Here was a great new avenue to success, through which the Central might cash in on an exclusive traffic haul of N.P. tonnage to the nation's greatest railroad center, Chicago.
Conversely, as the N.P. owned no rails south of the Twin Cities (Minneapolis-St. Paul), the line of the Central presented a strategic advantage to the N.P. in the controlled delivery of its traffic to the Chicago Market. The Northern Pacific, in 1890, owned and operated 3,775 miles of first class railroad between Ashland, Duluth, and the Twin Cities westward to the Pacific Coast, with a healthy branch to Winnipeg. Tapping the great wheat belts of the Dakotas and Montana, and the vast resources of Washington and Oregon, the N.P. had built well for the future, and enjoyed preeminence in its own territorial sphere.
However, in its eager designs for expansion, the N.P. spread itself wide and thin, and in the 1890 era began to feel the pressure of an avalanche of expense which could not be stemmed by current income and revenue. Moreover, Jim Hill, of the Great Northern, loomed as a powerful threatening competitor, thus making imperative the Northern
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later Justice of the U.S. Supreme Court, the affairs of the Central were ably administered.
The Central lease of the Chicago & Northern Pacific remained in effect temporarily, pending further efforts to adjust and improve a serious situation in the Chicago area.
A few months later the C.& N.P. slipped into bankruptcy and thereupon the Central terminated its lease of the C. & N. P. but continued to use the facilities on a trackage rental and wheelage basis.
In 1894 the Court authorized the Receivers of the Central to issue 6% certificates in the amount of two million dollars, the proceeds of which were to apply on the floating debt. This debt was quickly liquidated and the financial condition of the road thereby considerably improved.
Noteworthy changes in executive and operating personnel of the Central created by the N.P. lease, included the resignation of President Charles L. Colby, and the election of Edwin H. Abbot to fill the vacancy. Colby retired from the field of railroad activity in 1890, and appeared no more in the industry.
The N.P. lease brought to the Central one of the most illustrious figures in railroad mechanical history -- the well remembered James McNaughton, who, in later years, became Vice-president and General Manager of the American Locomotive Company. Formerly a Brooks Locomotive Works machinist, later general foreman of the N.P. repair shops, McNaughton came to the Central as Superintendent of motive Power to assume full responsibility in the performance of locomotives and operation of repair shops.
When McNaughton came to the Central in 1890, the mechanical roster listed 129 locomotives; 72 Baldwin, 51 Schenectady, 4 Manchester, 1 Pittsburgh, and l Griggs. From 1890 to 1909, when the Central surrendered its name to the Soo, 111 new locomotives were purchased from Brooks, the direct result of McNaughton's unswerving faith in his favorite maker of steam motive power.