Denver & Rio Grande Railway (Colorado) (1870-1880)

This page was last updated on June 14, 2011.

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In Colorado -- D&RG Organized; Construction Starts; "Royal Gorge War"

The Denver & Rio Grande Railway was organized in October 1870 by William J. Palmer and his close friends and business associates to build a railroad between Denver and El Paso. While he had been in charge of the construction of the Kansas Pacific line into Denver in early 1870, Palmer had seen a need for a railroad operating along a north-south line south from Denver, connecting the mouths of the canyons where the booming mining camps were being located.

The company was incorporated in both Colorado and New Mexico on October 27, 1870, with a capital stock of $2.5 million. The first spike was driven in Denver on July 28, 1871. D&RG was the first road to equip its freight cars with air brakes. (LeMassena, page 15)

Denver & Rio Grande Railway was incorporated on October 27, 1870 to build south from Denver to Pueblo, west up Arkansas River to Salida, then over Poncha Pass to the Rio Grande River, and south along the Rio Grande to El Paso. Salt Lake City was shown as the destination of The Western Colorado Railway, one of the seven proposed branches. (Athearn, pages 14, 15; Wilson page 8) The Denver & Pacific had been completed between Denver and the UP at Cheyenne in June 1870, and the Kansas Pacific reached Denver from the east in August 1870. (Wilson, pages 3, 6) (The new company included seven branches, one of which showed a route into Utah Territory with Salt Lake City as the destination.)

Construction of the D&RG started at Denver in September 1871. On February 17, 1871 Palmer had announced that the road would be built to three foot gauge. (Wilson, page 15)

D&RG reached Colorado Springs, seventy-six miles south of Denver, on October 21, 1871. It was turned over by the construction company to the railroad for operation on January 1, 1872. (Athearn, page 20) Construction started immediately on the extension of the line to Pueblo. (Wilson, page 20) On June 19, 1872 the road was completed to Pueblo. (Athearn, page 23)

During the financial panic that began in September 1873, seventy-seven standard-gauge railroad companies failed, while the narrow gauge D&RG didn't. (LeMassena, page 16) The financial panic of 1873 was caused by the schemes of Jay Gould. (LeMassena, page 26)

September 2, 1873
Lengthy extract from the Denver & Rio Grande's first annual report, which notes that grading on that road began in March 1871, the track reached Colorado Springs on October 27, 1871, and the road was opened for business on January 1, 1872. Track reached Pueblo on June 15, 1872. As of the date of the report, April 1, 1873, the road owned 12 locomotives, seven passenger cars, four baggage, mail and express cars, four open excursion cars, 258 freight cars, 22 dump cars and two snow plows, and had on hand the trucks for 22 freight cars and one passenger car. During 1872, there had been built at the shops 150 freight cars of the 8-wheel pattern, two baggage & mail cars and three observation cars. Three additional locomotives had been ordered, as of the date of the report. (Deseret Evening News, September 2, 1873)

During the four year period from 1872 to 1876 Denver & Rio Grande built feeder branches in Colorado; to Canon City in July 1874 and to the Trinidad coal mining region in April 1876. Also in 1876 construction was completed to La Veta, as the beginning of the road's line to the Rio Grande River, and El Paso to the south.

The Denver & Rio Grande's builders soon found that their destination of El Paso could best be reached by discontinuing their efforts over La Veta Pass and building south from Trinidad and into New Mexico over Raton Pass. Unfortunately, the AT&SF, which had completed its line to Pueblo in mid 1876, also had its sights on Raton Pass as part of its proposed transcontinental railroad. In April 1878 the Santa Fe's surveyors beat Rio Grande's crews to the 7,765 foot mountain pass.

The loss of the route over Raton Pass was a serious blow for Palmer and his Denver & Rio Grande. A line over Raton Pass had been seen as the best route to El Paso, with construction over any other pass seen as more costly to complete, and Colorado's "Baby Road" was already dangerously low on financial resources.

With the loss of a good route to El Paso, Palmer decided to concentrate the railroad's construction efforts towards completion of a line to Leadville, to get the traffic of that booming new mining camp. Of course, with the promise of transporting high value traffic such as the silver ores of Leadville, and as another way to block the efforts of its smaller rival, AT&SF also decided to build a line to the camp.

The ensuing battle for rights to the route through the canyon of the Arkansas River, west of Canon City ("the Royal Gorge Railroad War") was only finally settled two years later in February 1880. There was violence and threats of violence in the construction camps but most of the action was in the courts and corporate board rooms in Denver, New York and Boston. After the "Treaty of Boston" was signed by Palmer, Jay Gould, the AT&SF, and Denver & Rio Grande's bondholders, Palmer regained control of the destiny of his road in April 1880. The settlement allowed Denver & Rio Grande to take possession of the Santa Fe's route through the Royal Gorge and the road completed construction to Leadville on August 2.

D&RG was completed to Canon City, Colorado, in July 1874. Construction started at Florence, on the branch completed to the Labran coal fields in October 1872. The coal fields were located thirty-six miles west of Pueblo, near Canon City. The construction of this eight mile branch between Florence and Canon City was the only construction activity for the D&RG between October 1872 and February 1876, due to the financial panic of 1873. (Wilson, pages 24, 25; Rebel page 26)

D&RG began construction of their line south of Pueblo in January 1876. (Wilson, page 27; Rebel page 43) There had been no construction on the line since 1874 because of the financial crisis of the Panic of 1873 and because of a lack of revenue for the road between Denver and Pueblo. In April 1876 the road was completed to El Moro, five miles adjacent to Trinidad, as a terminal for the coal fields of the region. In July the road was completed to La Veta, at the base of La Veta Pass. And a year later, in July 1878 D&RG completed its line to the Rio Grande river, at Alamosa. (Wilson, pages 27, 30)

After AT&SF beat D&RG to a route over Raton Pass to the south in February 1878, Palmer decided in April 1878 to abandon his efforts towards Santa Fe, and El Paso, and concentrate instead toward completion of a line to Leadville, to get the mining traffic of that booming, new camp. (Athearn, page 56) As any true rival would, AT&SF also decided to head for Leadville, and the ensuing battle for rights to the route through the canyon of the Arkansas River west of Canon City, "the Royal Gorge Railroad War", was only finally settled by the D&RG actually being leased by the AT&SF for thirty years, beginning in October 1878. The terms of the lease not only provided that the AT&SF would not build any competing lines to the proposed lines of D&RG, including the extensions to the San Luis and San Juan Valleys and Leadville, but also that all future D&RG construction would only be of three foot gauge. (Athearn, pages 58, 66) (Both sides immediately started to work on ways to get around the lease by numerous financial and legal maneuvers.)

By September 1879, D&RG's "Royal Gorge War" with AT&SF was draining their financial resources. To get cash for expansion Palmer sold one-half interest in D&RG to Jay Gould, who was given control of three of the five seats on the D&RG board. (Wilson, page 59) Gould retained his control but off the D&RG board by April 1882.

In April 1880 Palmer regained control of the D&RG. The "Treaty of Boston" was signed on March 27, 1880 to settle the dispute between Palmer, Jay Gould, the D&RG bondholders, and ATSF. At that time D&RG took possession of the disputed AT&SF line through the Royal Gorge. (Athearn, pages 70-90)

By May 1880 D&RG had completed its line from Pueblo to Salida and in July the line reached Leadville. (Wilson, page 60)

Destination, Utah

(Coverage of D&RGW construction in Utah)

In September 1880 D&RG started construction of the extension of its line to Utah by building over Marshall Pass. (Wilson, page 68)

December 1880
Doctor William Bell, friend and close business associate of Palmer, organized Sevier Valley Railway in Utah to build from Ogden south to Arizona, with another route over Salina Pass and across Castle Valley to the Green River and the Colorado line. (Athearn, page 115)

December 7, 1880
Sevier Valley Railway was incorporated to build south from Ogden to the north boundary of Arizona Territory, by way of Salt Lake City, Provo, Nephi, Salt Creek Canyon, and Salina, also to build east from Salina to the west boundary of the State of Colorado to meet the westward building D&RG. (from file for Utah corporation index 15038, approval for the D&RGW of 1921)

June 1881
D&RG organized the Rio Grande Western Construction Company to build the line into Utah, replacing the dissolved Rio Grande Extension Company. Contract for the construction was signed on August 1, 1881. (Wilson, page 71)

July 1881
When Denver & Rio Grande Railway changed its destination from El Paso to Salt Lake City in 1880 it soon found that the only practical and construction-cost effective route open to it from Denver to Salt Lake City was by way of the Price River Canyon.

To accomplish all of the construction in the territory of Utah, a new company by the name of Denver & Rio Grande Western Railway was organized in July 1881. To shorten the construction time needed to reach Salt Lake City the D&RGW made a deal with C. W. Scofield to take over his three railroads - the Utah & Pleasant Valley to shorten the line and the Wasatch & Jordan Valley and Bingham Canyon & Camp Floyd lines to provide it with ready sources of traffic when it got to Salt Lake City. The three Scofield lines were purchased in December 1881 and the Rio Grande's rails reached Salt Lake City in June 1882. (Reeder, page 387, from D&RG ICC valuation reports, pages 806, 896, 901)

July 23, 1881
Articles of Incorporation for the Denver & Rio Grande Western Railway Company were filed on Thursday, 21 July 1881. (Salt Lake Daily Tribune, July 23, 1881)

After completing their line to Leadville, Denver & Rio Grande began an extension of their line west from Salida, where the line to Leadville turned north, Palmer began construction of a line west to Gunnison, by way of Marshall Pass. Construction was pushed at a rapid pace to beat out the competition that Palmer saw coming from Denver, South Park & Pacific. (Athearn, page 106; Wilson, page 70)

The first train steamed into Gunnison on August 8, 1881. Denver & Rio Grande also completed its San Juan extension from Alamosa to Durango in August 1881. (Athearn, page 104)