The origins of the Denver & Rio Grande Western by Mark Hemphill for Trains magazine:
In the American tradition, a railroad is conceived by noble men for noble purposes: to develop a nation, or to connect small villages to the big city. The Denver & Rio Grande of 1870 was not that railroad. Much later, however, it came to serve an admirable public purpose, earn the appreciation of its shippers and passengers, and return a substantial profit.
The Rio Grande was conceived by former Union Brig. Gen. William Jackson Palmer. As surveyor of the Kansas Pacific (later in Union Pacific’s realm), Palmer saw the profit possibilities if you got there first and tied up the real estate. Palmer, apparently connecting dots on a map to appeal to British and Dutch investors, proposed the Denver & Rio Grande Railway to run south from Denver via El Paso, Texas, to Mexico City. There was no trade, nor prospect for such, between the two end points, but the proposal did attract sufficient capital to finish the first 75 miles to Colorado Springs in 1871.
Narrow-gauge origins
Palmer chose 3-foot gauge to save money, assessing that the real value lay in the real estate, not in railroad operation. At each new terminal, Palmer’s men corralled the land, then located the depot, profiting through a side company on land sales. Construction continued fitfully to Trinidad, Colo., 210 miles from Denver, by 1878. Above Trinidad, on the ascent to Raton Pass, Palmer’s engineers collided with the Santa Fe’s, who were building toward California. Realizing that a roundabout narrow-gauge competing with a point-to-point standard-gauge would serve neither the fare box nor the next prospectus, Palmer changed course, making D&RG a supply line to the gold and silver bonanzas blossoming all over Colorado and Utah. Thus the Rio Grande would look west, not south, and would plumb so many canyons in search of mineral wealth that it was a surprise to find one without its rails.Turning west at Pueblo, Colo., and outfighting the Santa Fe for the Royal Gorge of the Arkansas River — where there truly was room for only one track — D&RG entered Leadville, Colorado’s first world-class mining bonanza, in 1880. Three years later, it completed a Denver–Salt Lake City main line west from Salida, Colo., via Marshall Pass and the Black Canyon of the Gunnison River. The last-spike ceremony in the desert west of Green River, Utah, was low-key, lest anyone closely examine this rough, circuitous, and glacially slow “transcontinental.” Almost as an afterthought, D&RG added a third, standard-gauge rail from Denver to Pueblo, acknowledgment that once paralleled by a standard-gauge competitor, narrow-gauge was a death sentence.
New owners, new purpose
Palmer then began to exit. The company went bust, twice, in rapid succession. The new investors repurposed the railroad again. Instead of transient gold and silver, the new salvation would be coal. Thick bituminous seams in the Walsenburg-Trinidad field fed beehive coke ovens of a new steel mill near Pueblo and heated much of eastern Colorado and western Kansas and Nebraska.