Through the influence of a brother-in-law who was a member of the Virginia Senate, he obtained a grant from the Commonwealth of Virginia to run a railroad from the port of Phoebus, westward to Rapidan, where he would interchange with the CF&W. After getting the grant he persuaded some Phoebus bankers to finance 25% of the railroad. His brother-in-law hung an amendment on a tobacco tax bill that obligated the Commonwealth to 24%. The Colonel put together a complex financing structure for the remaining 51%, Colonel Davis being the owner of record of that 51% block of stock. Construction of the Phoebus & Western Virginia Railway (P&WV Rwy.) was completed on April 16, 1898. Obviously from the new railroad's name, the Colonel's ultimate plan was to run the railroad all the way to his mines. On April 17 the railroad held a large celebration on the docks at Phoebus to celebrate the arrival of the first coal train. The primary refreshment served was "coal miners punch." the main ingredients, according to legend, was dynamite, coal dust and Davis Mountain moonshine. The Colonel consumed more than the other guests and as the train pulled into the siding he stumbled off the pier into the water and drowned.
The whole financial structure he had built unraveled with his untimely death, and the railroad went into the hands of receivers after only one week of operation. the CF&W had, in spite of its name, never been able to get clearance from the Commonwealth of Virginia to run trackage beyond Culpeper Virginia. The owners saw the Colonel's death as a way to extend their line to an east coast port. They quickly formed a partnership of the CF&W and three local mine owners, raising sufficient capital to bid on the P&WV Rwy. Being the first and only group with cash in hand, they bought the Colonel's 51% at a bargain basement prices and resumed operations under the name Chesapeake Bay and Western Railway Company. The first train to operate under the CB&W name was an eastbound coal train from the town of Davis to Phoebus on October 3rd 1898.
Over the next several years the railroad began its westward expansion, increasing the number of coal fields served. By 1910 it hauled coal from fields in Kentucky, West Virginia and Virginia to the Atlantic coast. the railroad's management saw the limitations and vulnerabilities of being a one commodity railroad so plans began to expand west to St. Louis. World War I meant putting expansion plans on hold. The railroad prospered during the war and by the signing of the armistice in 1918, the railroad had almost doubled the tonnage it moved annually. During this period the railroad bought back the stock held by the Commonwealth of Virginia.