44 UNIVERSITY OF COLORADO STUDIES 



The reasons for the reduction in the freight rate so as to enable the 

 company to sell in the above district and in Utah were due to the activity 

 of the Rio Grande which was friendly to the Coal and Iron Company as 

 stockholders of the railroad were largely interested in the company, 

 owning half of its stock. When the pool was formed, they insisted upon 

 a readjustment of the rates by the Union Pacific so that the company 

 might be able to sell its products in a larger territory. 



The origin of the Colorado Coal (Fuel) and Iron Company at least 

 as far as it has become a factor in the manufacturing industry of the 

 country is due to its reliance upon railroad assistance. Had it been 

 deprived of the close relation with the railroad interest, it is very doubt- 

 ful whether or not it would have been able to grow into the great manu- 

 facturing concern it has become. 



About 1873, the Rio Grande railroad was built into Pueblo. General 

 Palmer, the builder, got into difficulty when the road had reached 

 this city and found himself short of funds. He wished to build the road 

 from Pueblo to Canon City, a distance of 42 miles. The Colorado 

 Coal and Iron Company had many coal and ore lands in the vicinity 

 of Canon City which they wished to develop. The Coal and Iron Com- 

 pany, therefore, raised the money needed to build the road to Canon 

 City, taking in exchange therefor the stock of the railroad. In this way 

 the road was successfully extended to that point. In a similar fashion, 

 another company bought up the coal and iron lands around Trinidad, 

 Huerfano and some other points, and then turned over one half of 

 their interests to the railroad and on these properties, the funds were 

 raised with which the railroad was built to Trinidad. In 1880 or 1881, 

 in order to develop the resources along the road, General Palmer got 

 the men interested in these properties, both at Trinidad and at Canon 

 City, to put up capital for a steel plant at Pueblo. All the companies 

 were consolidated into the Colorado Coal and Iron Company. About 

 $2,500,000 was expended at that time. The two contracts which had 

 formerly been made by the railroad by which special favors were granted 

 to the companies in the matter of freight rates were then consolidated into 

 one contract with the combined company. This contract extended spe- 



