Building the Line - 1883-1890
The Colorado Midland Railway Company was founded in 1883 to built a standard gauge line linking Colorado Springs? with the mines of Leadville?. (In 1884, this was amended to include points west, as new mines were opening at Aspen?.)
Little tangible progress occurred for the first two years. Plans were made, but it took the election of John Hagerman as president in 1885 to finally get construction underway. Given available financing, the decision was made to first construct the isolated Leadville? - Aspen? - Glenwood Springs? segment. Profits made from moving materials, coal, and ore between these three points would then finance expansion of the system.
Leadville, at the time, was served only by two narrow gauge carriers - the Denver & Rio Grande and the Denver, South Park & Pacific. The D&RG only had service to Leadville via its circuitous narrow gauge Royal Gorge Route. The DSP&P had an even longer and far more difficult route, reaching Leadville via the South Platte Route? over Kenosha Pass?, then over Boreas Pass? into Frisco, and finally over Fremont Pass? into Leadville. A standard gauge railway could haul much more, and could interchange cars with the rest of the US rail system without transloading. The idea of standard gauge competition so scared the two incumbents that they immediately doubled their rates on shipping rail to Leadville.
Seeing the stranglehold that Jay Gould's railroads had on Leadville (the D&RG was directly controlled, whereas the DSP&P was owned by Union Pacific, which in turn was controlled by Gould), Eastern financiers were convinced to step in and immediately fund the connection with Colorado Springs and thus the direct connection with the standard gauge US rail system.
The first construction contract was let in April of 1886 to begin construction of the grade over the Continental Divide at Hagerman Pass via the Hagerman Tunnel. By July, construction commenced from the Colorado Springs end as well. The first trains reached Leadville on 31 Aug 1887, Aspen by 4 Feb 1888, and to the end of CM rails at Newcastle? on 20 Oct 1888.
Once the line had reached the coal mines of Newcastle, the prospects of funding the Utah extension were looking less likely. The projected cost could not be justified in that little traffic was available along the route. However, the (still independent) Denver & Rio Grande Western Railway was willing divert some traffic normally handed to the Denver & Rio Grande Railroad? at Grand Junction. So, the Colorado Midland mainline was connected to the D&RG Tennessee Pass route at Gramid? (just west of Newcastle), trackage rights were negotiated as far as Rifle?, and a joint entity - the Rio Grande Junction Railway - completed the line from Rifle to Grand Junction. By Nov 1890, the Midland's trains reached their westernmost terminal.
The Santa Fe Years - 1890-1897
The railroad was sold to the Atchison, Topeka & Santa Fe Railway? in September 1890. The board felt that the sale to a larger parent would help protect the shareholders from the Midland's huge debt load, and the Midland fit into the Santa Fe's plan of competing with the Rio Grande in Colorado. With the sale, the line took a minor name change and became an independent subsidiary known as the Colorado Midland Railroad.
The Midland as built was problematic and expensive to operate, so immediately upon completion some effort went into improving the situation. The chief pain point was Hagerman Pass. High on the Main Range, its steep grades, large trestles, sharp curves, and susceptibility to blizzards and avalanches made it a pricey maintenance nightmare. Plans for a lower, longer tunnel were started in 1888, but the Midland was so far in debt that no capital was available to make the improvements. So, in 1890 the Busk Tunnel Railway Company was incorporated to build it instead, with the Midland paying a fee for each ton of freight or passenger that it hauled through the new Busk-Ivanhoe Tunnel. The route was completed in December 1893, and operations over the old line ceased a month later.
With the Silver Panic of 1893? digging deeply into the road's bottom line, the Colorado Midland defaulted on its bonds in Feb 1894 and went into receivership. The line was initially under the same receivers as its parent, the Santa Fe, but on 1 May 1894 the bondholders had the ATSF receivers replaced with George W. Ristine. While financial conditions improved, the CM could still not meet its obligations and went to foreclosure in May 1897. All of the railroad's assets were sold for $295,000 to Henry Rogers on 8 Sep 1897. The line once again became the Colorado Midland Railway.
Independent Again - 1897-1900
While all the foreclosure proceedings were going on, Receiver Ristine was still hard at work trying to make the railroad solvent. In an effort to force the Busk Tunnel Railway? to lower the tolls through the lower tunnel, he ordered the rehabilitation of the old Hagerman Tunnel line in preparation for diverting all traffic back onto CM rails. Freight was indeed diverted all through the remainder of 1897 and 1898, leaving the Busk Tunnel Railway without any source of revenue.
A spectacular series of winter storms started on 24 Jan 1899, dropping feet of heavy snow onto the Hagerman Pass route. For the next two-and-a-half months, the Midland did battle with heavy snowfall, snow slides, and avalanches in an effort to reopen the pass. It wasn't until 14 Apr 1899 that rotary crews finally managed to open the entire line from Leadville to Aspen. This crisis brought the Midland and the Busk Tunnel Company back to the negotiating table, and in the end, the Midland bought the tunnel company outright. On 26 May 1899, trains returned to the Busk-Ivanhoe Tunnel, and by fall the Hagerman Tunnel route had been salvaged.
National economic prosperity and continued improvements (newer equipment, reduced curvature through realignments, improved track, conversion to modern automatic couplers) to the route made the Colorado Midland once again an attractive railroad, and its two major connections - the Colorado & Southern and the Rio Grande Western - began eying it as a possible acquisition.
The Rio Grande Era - 1900-1917
On 2 Jul 1900, the CM was sold to the C&S and the RGW, with each company having half ownership. It was a natural end-to-end acquisition, since the RGW controlled traffic from the railroad's western end, and the C&S was a key interchange partner on the east end. Neither railroad competed with the CM for traffic (discounting what little Leadville-Denver traffic went by C&S - ex-DSP&P - narrow gauge).
However, forces of change were at work in the Rio Grande world as well. The Denver & Rio Grande Railroad Company? was looking to acquire its Utah twin, the Rio Grande Western Railway?. This would put ownership of the Midland's western connection firmly in the hands of its chief competitor, and almost assure eastbound bridge traffic was directed away from the line.
Fortunately for the CM, the D&RG wasn't capable of handling all the traffic. The Grande had struggled for years financially, and was running obsolete equipment on worn out track. The Midland continued to take traffic and receive capital for upgrades, such as heavier rail and new locomotives. In addition, new sources of traffic such as CF&I's Cardiff mines and coking ovens came online, building the online traffic base.
By 1910, the years of good fortune were coming to an end. CF&I shut down the almost-new Cardiff coking ovens in 1910, and significantly curtailed coal mine output in the region. Ore traffic that once came over the Midland Terminal was pulled off and sent via the Colorado Springs & Cripple Creek District Railway? Short Line in 1911. Plus, the Grande had, all the while, been rebuilding its own system to take on the bridge traffic itself.
The Final Years - 1917-1920
Despite deferring anything but necessary capital expenditures, the railroad once again defaulted on its bonds and was foreclosed upon in February of 1917. It went to auction, and was purchased for $1.4M by Colorado Springs millionaire Albert Carlton.
Since Carlton was also in charge of the CS&CCD, he diverted ore traffic back onto the Midland. He put in place interchange agreements with the Santa Fe to build the traffic base. He used his business contacts to persuade shippers to move more volume via the CM, and to invest in their online industries. Investment was made into the physical plant, improving service. The Midland, almost overnight, was back to being a vital, going enterprise.
As the Midland was rebuilding, in the background was the spectre of World War I. The US had entered the war in April of 1917, and the railroads were a key piece in the timely and efficient movement of war materials. The railways, however, were largely in poor shape both physically and financially. On 26 Dec 1917, President Wilson nationalized the US rail system under the United States Railroad Administration, or USRA.
As part of its mandate for streamlining rail movements, the USRA quickly identified the Colorado Midland as the shortest route for bridge traffic across Colorado (without regards to its physical condition or operating challenges). Thus, all possible traffic was diverted to it, away from the D&RG's longer Tennessee Pass route. Needless to say, in its partially rehabilitated state, the CM was in no condition to handle this onslaught of freight. There weren't enough locomotives, there weren't enough crews, and there wasn't enough track to run it all on. Yards backed up, freight movement stalled out, and the USRA came to investigate.
The USRA inspectors came to the conclusion that the Grande, while longer, was substantially more capable of handling the freight. Consequently, they immediately reversed their orders, sending all bridge traffic via the Grande instead.
With traffic suddenly gone, the railroad was back in receivership again as of July 1918. The receiver couldn't see any way forward, and ordered the railroad shut down as of 5 Aug 1918. In compliance with that order, the last passenger train left Grand Junction on 4 Aug 1918, and freight operations ceased five days later.
During the shutdown, the rolling stock was kept in service earning per diem for the company, and the motive power was sold off as buyers were found. The Midland Terminal Railway acquired the Colorado Midland line from its interchange at Divide to Colorado Springs so as to not lose its connection to the rail network. No buyer - despite some interest from the Santa Fe - was found for the rest of the Colorado Midland system. In July of 1921, the orders came to scrap the entire line from Divide to the west. The line was gone and the corporation dissolved by mid-1922.