On August 31, 1887 tracks were laid into Leadville with passenger and freight service inaugurated the following day. Steel was immediately pushed further west into the Sawatch Range and the Continental Divide. The roadbed had been prepared earlier by the crew working the Western Division. The Hagerman Tunnel, started in the summer of 1886, was completed on June 14, 1887. The tunnel was 2,060 feet long and pierced the Sawatch Range at an elevation of 11,530 feet. The approach to this tunnel was accomplished by means of four tremendous lariat loops including a huge curved wooded trestle 1,084 feet long just at the beginning of the third loop; a similar smaller trestle 420 feet long; and eight snowsheds.
By mid-September rail was spiked almost to Hell Gate with much of the grading and bridge worked completed westward. On November 5, 1887 the Midland's tracks reached Aspen Junction (Basalt) where the work effort split. One group pushed the main line towards Glenwood Springs, while the other worked on the 18 mile Aspen Branch. Regular train service began into Glenwood Springs on December 18, 1887 after the completion of a large wooden bridge over the Roaring Fork River. Construction of the iron Maroon Creek viaduct and a wooden bridge over Castle Creek delayed the arrival of the Midland trains into Aspen until February 4, 1888.
The coal lands in the Jerome Park near Glenwood Springs were owned by the Midland under the name of the Grand River Coal & Coke Company. Rail to this area was completed and placed in service by December, 1887. By October 20, 1888 the main line had been extended westward to the coal mining town of New Castle.
The year 1888 saw 13 more 4-6-0 freight engines delivered. These included 26 to 28 from Schenectady, and 29 to 38 from Baldwin. In addition a rotary plow was obtained from Leslie Brothers Manufacturing Company and two flangers from the Youngstown Car Company.
By the time trains were running into New Castle, it became very obvious that the Midland was extremely expensive to operate. The Aspen Short Line Railroad was incorporated on November 15, 1888 to construct a new route from Snowden to a spot 3.8 miles west of Leadville at a place named Arkansas Junction. This greatly reduced the grade on the original main line through Leadville from3% and 4% to 1.65%.
The Midland was now faced with the cost of expanding the railroad westward into Utah. Although possible routes were surveyed and permissions granted, the cost of $15,000,000. was the sticking point. It was decided to push the Midland westward from New Castle down the Grand Valley to Grand Junction. There the Colorado Midland would connect with the Denver & Rio Grande Western, still an independent railroad. They were quite will to divide traffic equally between the Denver & Rio Grande and the Colorado Midland.
Plans were made with the Rio Grande to grant the Colorado Midland trackage rights between West New Castle (Gramid) and Rifle. From Rifle a jointly owned line, the Rio Grande Junction Railway Company, constructed the 64 miles of track to Grand Junction and the D&RGW interchange. This effort was completed in September, 1890 with standard gauge trains running into Grand Junction by November 14, 1890 and connecting with the now standard gauged Denver & Rio Grande Western.
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