The Colorado Midland was a railroad idea dreamed up by Colorado Springs businessmen like Irving Howbert. Howbert had a Colorado Springs bank, a strong
financial center. James J. Hagerman had come to Colorado Springs for the clean dry air and a tuberculosis cure. His poor health improved, and just as quickly he
looked for something to stimulate his interests. In May 1885, Howbert and his partner, Joseph F. Humphrey, persuaded Hagerman to join the cause of the Colorado
Midland. The effort led not only to investing in Howbert's bank but its interests, including the Colorado Midland Railway project. With more knowledge of railroading
than probably anyone else at the bank, Hagerman was persuaded to take over leadership of the floundering company. As yet, it had nothing more than a few potential
investors, and no rails. He redirected the efforts to raise funds for construction. Grading was begun in upper Ute Pass to satisfy local investors who were demanding
action.
On Dec. 15, 1886, CM locomotives 1 and 2 arrived from Schenectady Locomotive Works in New York. Now track work up Ute Pass could really get going. The Colorado Midland had built as far as Leadville by October 1887. The tracks of the Colorado Midland reached Leadville in August, and by December they were as far as Glenwood Springs.
Colorado Springs, anxious to include all of the latest developments in transportation, had a regular D&RG train to Manitou, but if anyone wanted a quick way to get downtown to ride that train, it didn't exist. Omnibuses from the major hotels traveled to and from the railroad stations. It was through William S. Jackson, Hagerman, Howbert and others that a solution was reached. It was a most unique alliance. The Colorado Springs and Manitou Street Railway was incorporated in early 1887. The horse-powered line opened November 2, 1887, with a single track running north and south on Tejon Street. The railway had a few periods of expansion, but within a year it had reached the limits of horse propulsion. Soon it converted to electrical power, and a line to Colorado City was built.