>Considering the costs of a new diesel vers keeping old steam going SP must have thought there was some future to the line or an expense of this kind would never have been made. 7 years of future operation (and 3 paint jobs) is nothing to ignore. Wish I could have seen the operation before it closed.
Actually Lon, I have a different take on this. By 1954, dieselization was well underway on the SP, as it had been since the end of the war. In this era, the ICC fairly closely regulated the railroads including setting their tariffs. At that time, the railroads were allowed to make a reasonable profit, but were also expected to provide service if there was a demand or if the community or industry was dependent upon it. As such, railroads were expected to subsidize any losses from branchline and passenger operations as long as those losses didn't substantially threaten their overall financial condition. Obviously, it was far easier for a small railroad such as Sumpter Valley to abandon passenger service or Bates to Prairie City because they could show that the impact of the losses threatened their financial condition. But a big railroad, such as Southern Pacific, could not make the same argument in regards to the narrow gauge and various branchlines, plus they did still potentially make a profit when any long haul to the final destination was considered.
I would like to see the actual abandonment hearing record, but from what little I do know SP's decision to buy a diesel was just part of a larger plan. In the early 1950s, it was probably politically impractical to consider abandoning the narrow gauge as the communities and industries would have no doubt substantially protested it. No doubt, SP considered standard gauging the line, but due to limited traffic it is unlikely they would have ever been able to show a return on their investment. What photos exist suggest traffic on both the narrow gauge and connecting standard gague were fairly light - I'm guessing maybe 30-40 standard gauge cars per week out of the valley, maybe 1500-2000 cars a year. By comparison, the modern rule of thumb for investors is that for a railroad to be profitable it must generate 100 cars per mile on an annual basis, though I have worked on shortlines that did far less and did fine financially.
Buying the diesel gave SP several advantages. First, it reduced operating and maintenance costs for providing a locomotive. Because the train ran at least every weekday (wasn't it Mo-Fr maybe Sat to Keeler, and three times a week to Laws or Zurich towards the end?), this was a potentially substantial amount. So in the few years that the No 1 operated, the cost savings of it vs steam probably paid for itself. And when the eventual abandonment was to be considered, SP could show that they did make an honest effort to modernize and reduce operating costs. Building the steel flat car may have been a similar exercise, SP could show they had considered the costs of upgrading the cars. SP had every intention of abandoning the narrow gauge when they bought the No 1. It was not a "standard" 50 ton compared to ones previously built. It had a different handrail arrangement to meet ICC specifications, so this was a required modification. It was also the only engine built with dual gauge trucks designed to be changed reasonably easy (one or two days in the shop) between 36" gauge and standard gauge. SO why did SP pay extra for this modification? Simple - SP already knew that they would be abandoning the narrow gauge before the end of the economical life of the No 1. At this time, locomotives were typically financed (lease/purchase) for 15 years, at which time they often needed a rebuild though switchers typically lasted longer. So SP knew that they would either be converting No 1 to standard gauge and reassigning it as a shop or tie plant switcher, or be able to sell it far easier as a standard gauge industrial switcher. Incidentally, there is no reason why this design was never built as an industrial switcher, however GE apparently never really promoted it as a domestic model instead offering a standard line of Cummins powered centercabs. In the 45 ton plus range, GE built single engine switchers were a fairly rare model with the advantage of the dual engines in centercabs being promoted as an advantage.
When the late 1950s arrived, SP now had additional arguments available to abandon the narrow gauge. It never was fully dieselized, as No 9 was required for backup to No 1. No 9 was one of the last steam locomotives in revenue service for the SP, but with its flue time expired there would have to be a substantial investment in an obsolete asset. That means to provide reliable service, SP would have to buy a backup diesel, and there was little hope of finding a used one. GE did actually catalog an early U6B model that had a narrow gauge option, but their base price was $112,600 in 1959 and potentially this created another stranded asset that would never provide a return on investment.
The SP did abandon rail operations on the narrow gauge, but they didn't abandon service or lose traffic. For many, many years SP had been directly or indirectly involved in providing an alternate passenger, mail, express or branch service through various ways. For instance, by WW2 you won't find any branchline or mixed trains on the SP in Oregon except for an inaccessible section of the Tillamook branch, and secondary trains to Coos Bay and on the Siskiyou line. Why? SP owned Oregon Stage Lines that provided the service. SP also owned an interest in Pacific Greyhound Lines, so it conveniently provided a replacement service all over the western SP. And their trucking subsidiary Pacific Motor Transport was used to offer express and LCL service directly to the customer's door. SP used the PMT argument often in closing agencies (manned depots) as the agent no longer handled express at the depot. In the case of the narrow gauge, SP made improvements at Lone Pine to allow truck to rail transfer of various mineral and other commodities. So the customer did not have to load narrow gauge cars, they simply loaded PMT trucks instead, or trucked it directly to Lone Pine. I talked to Mr. Wood who had retired as the last agent at Lone Pine and lived there as caretaker for several years afterwards. Before that he was the agent at Keeler. I asked him about traffic levels, and he indicated there wasn't any substantial change in the outbound levels after abandonment. Simply SP used PMT over public roads and still had transfer costs whether at Owenyo or Lone Pine. Don't forget that US395 was a decent road quite early, particularly in the Owens Valley due to the tourism demand out of Los Angeles area.
Don't forget - Sumpter Valley did something similar. When they abandoned all but South Baker to Baker in 1947, the "mallet's" were actually replaced by railroad owned and operated trucks. Politically it was far easier as the railroad's only remaining customer of consequence was also its parent company, but financially the reasons were the same. So technically SVRY's last RAIL operations were using the 101 on the three rail to deliver standard gauge cars to the UP interchange, but in reality the SVRY still provided freight service to Bates.
Between 1949 and 1951 SP had bought 19 GE 70 tons which were used to replace steam on many of the Oregon and Arizona branchlines and the SD&AE - all with light bridges and rail. One even was used on the daily passenger train between Globe and Bowie, AZ. This service was replaced in part by Greyhound a few years later. A GE 70 ton took the last train into Tombstone. Sp seemed to have been concentrating on eliminating money loosing services as the Tombstone and Patagonia branches ended mixed train service and were torn up (lack of traffic), as well as mos tof the former EP&SW main was abandoned as CTC on the original SP main allowed it to carry all the traffic. By 1955 SP had a fleet of 21 GE 70 tons for light traffic/rail/bridge operations, but by the early 1960s before many of them were 15 years old they were being retired as no longer needed.
