The Milwaukee "gave up" on the Olympian Hiawatha simply because it wasn't worth saving, a precursor of sorts to the same situation for the railroad as a whole 20 years later. It was simply a train that never should have been run on a railroad that should never have been built.
Milwaukee Road management, historically speaking, had delusions of adequacy comparing itself to the competition. Be it its route to the Pacific Northwest, or its route across Iowa, they couldn't see their own insurmountable inadequacies.
The Olympian Hiawatha's equipment (homemade and Pullman-Standard) was generally considered inferior to that of the Empire Builder, and later the North Coast Limited (both Budd), especially dome cars, which were a big deal in the 1950s. The Olympian Hiawatha's only dome car - the Super Dome - offered little forward visibility, and some coaches lacked leg rests. The Empire Builder debuted as a streamliner in February 1947. The Olympian Hiawatha debuted in June of 1947, but with some heavyweight equipment that would be in place for two more years. It was a viable train for five years while NP's North Coast Limited was being streamlined and operated on a much slower schedule. In 1952, the North Coast Limited was sped up to be competitive with the Olympian Hiawatha, and reduced the Olympian Hiawatha's competitive advantage in speed and equipment.
After the 1956 discontinuance of the Columbian its heavyweight companion train, the Olympian Hiawatha became a single-train operation on America's longest branch line - and without any connections of consequence west of Minneapolis. Unlike GN and NP trains, the Olympian Hiawatha had no Portland sections (the Milwaukee didn't go to Portland and the connection with SP trains to/from California), nor did it have important connections to Western Canada's largest city, Vancouver, enjoyed by the GN. The Olympian Hiawatha's service to Yellowstone National Park was cumbersome from distant Three Forks compared to the NP's direct train-and-later bus service to Gardiner (and UP's direct rail service to West Yellowstone). UP and NP were the top passenger railroads serving Yellowstone, and even CB&Q (through Cody) handled more passengers than the Milwaukee via Three Forks (and Gallatin Gateway, another Milwaukee Road failure). And, of course, GN offered exclusive and direct service to Waterton-Glacier International Peace Park. West of Minneapolis, the Olympian Hiawatha was a loner, with the exception of the UP Seattle-Portland "pool" train also serving Seattle's Union Station. As far as schedule, the Olympian Hiawatha offered a decent connection with UP's Butte Special at Butte, but the UP train operated in and out of the NP station offering a direct transfer to/from the North Coast Limited.
The Olympian Hiawatha died in May of 1961 (60 years ago), and when it did, the only community served exclusively by that train west of Mobridge, South Dakota with more than 3,000 people was Renton, Washington - a Seattle suburb (that wasn't even on Milwaukee Road track). Not counting suburbs, the next-biggest community exclusively-served by the Olympian Hiawatha was Roundup, Montana, population 2,842. This is contrast to places like Dickinson, Glendive, Miles City, Billings (which admittedly had CB&Q - half owned by the NP - service), Livingston, Bozeman, Helena, Pasco-Richland-Kennewick, and Yakima where the "parallel" NP had exclusivity in Midwest-Seattle service. And further north, GN-served communities in general were not huge, but were exclusively served (Williston, Wolf Point, Glasgow, Havre, Great Falls, Shelby, Cut Bank, Kalispell, Wenatchee, Everett).
As the first streamliner in Chicago-Seattle service (but not Chicago-Portland, that honor went to UP), GN established itself as the leader in passenger service across the Northern Tier, and only bolstered its position when it added a second second streamliner (the Western Star) in 1951, making the GN the only railroad to offer two "transcontinental" streamliners. (NP's Mainstreeter, MILW's Columbian, and UP's Portland Rose never rose to the level of the Western Star as far as amenities). GN also had a monopoly on Seattle-Vancouver(BC) service, and participated in the Seattle-Portland pool operation (with NP and UP). Across the Dakotas and Minnesota, it offered superlative service in all lanes, including from the Twin Cities to Fargo/Grand Forks, Winnipeg, and Duluth Superior - trains that fed the Empire Builder and Western Star for long distance service. GN also had the US Mail contract west of St. Paul which improved the bottom line for the Western Star, which was consolidated with the Fast Mail starting in the mid-1950s (except during peak travel periods). And while the NP didn't have a second streamliner to accompany its fine North Coast Limited, and its secondary trains were largely coach-only affairs (except Seattle-Portland), NP's exclusivity bolstered its traffic through the 1950s and 1960s. Contrast this to the Olympian Hiawatha with few connections and few places that weren't served better by the competition, and basically no "raison d'être."
According to Jim Scribbins' book "The Hiawatha Story", the Milwaukee claimed the Olympian Hiawatha was losing over $3 million annually by December of 1960. It was speculated that the Milwaukee actively pursued discontinuing the Olympian Hiawatha before 1962 when travel to the Seattle World's Fair would most certainly give a temporary uptick in patronage - something management knew would only be an anomaly. Another Scribbins book, "The Milwaukee Road, 1928-1985" has interesting information about discussions between GN, NP, and MILW about "pooled" transcontinental service in the 1930s and 1940s, i.e. operating on alterate days and trains using the routes of multiple railroads. GN opted out of this discussion first, but NP and MILW continued their discussions, even after the MILW announced it was creating equipment for the Olympian Hiawatha. The NP knew what the MILW later found out: There would be too many trains in the corridor if all the railroads operated their own passenger trains. With the weakest route and no connections, it's no surprise the Milwaukee trains were the first to bow out, something that would be replicated for the railroad as a whole west of Terry, Montana in 1980.
For a more thorough comparison:
(passenger trains, beginning page 27)
