In 1884, Colonel Wendell J. Davis, a wealthy logging tycoon, build the Davis Timber Company Railway. This three-foot narrow-gauge railroad was built to haul cut timber from his large landholdings on Davis Mountain near Davis, Virginia, to the sprawling sawmill at Keezeltown, Virginia. The little narrow-gauge line would eventually grow into the Chesapeake Bay and Western Railroad. The new railroad proved to be a very profitable operation in more ways than one. In July 1886, the brakes failed on a loaded log train coming down the famous Nosebleed grade. As a result, the entire train jumped the track, and the locomotive dug four feet deep furrow into the mountainside. The locomotive and six cars were a total loss. Still, the Colonel wasn’t about to abandon the locomotive without first pulling it out of the dirt and making personal examination to satisfy himself that it could not be repaired. After extracting what remained of the locomotive out of the ground, workers discovered the locomotive laid bare a vein of coal. The Colonel, knowing that the day would come when all the timber he owned would be cut, seized this opportunity, and began mining his newfound black gold.
His nearest market for coal was the large forge at Columbia Furnace, Virginia. To reach this customer, the Colonel hauled coal on his narrow-gauge railroad to Keezletown. It was offloaded onto standard gauge cars of the Keezletown, Columbia Furnace & Washing Railroad (CF&W) shipped to Columbia Furnace. Colonel Davis found new markets for his coal in the northern industrial centers. It became apparent the narrow-gauge railroad was not going to be able to handle the increased traffic. The standard gauge conversion was completed in November 1890, and this included bypassing the Nose Bleed grade, making the ruling grade 3.0%. Colonel Davis quickly began buying as many mineral rights to all the surrounding land as he could finance. He had a vision of a large coal empire that included a railroad to haul coal to a seaport on the Atlantic, where it could then be shipped up or down the East Coast. Despite his successes, he was stretched to his financial limit, so to get his coal to the coast, he tried to negotiate a merger with the CF&W. the CF&W owners refused all his offers, forcing him to look at other plans.
Through the influence of a brother-in-law who was a member of the Virginia Senate, Colonel Davis secured a grant from the Commonwealth of Virginia to run a railroad from the port of Phoebus westward to Rapidan. It would interchange with the CF&W. After receiving this grant, he persuaded several 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%, naming himself as the owner of the record of this 51% block of shares. Construction of the Phoebus & Western Virginia Railway (P&WV Rwy.) was completed on April 16, 1898. The Colonel’s ultimate plan was to run the railroad to his mines from the new railroad’s name. 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, were 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, despite 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 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 price. They resumed operations under the name the Chesapeake Bay and Western Railway Company. The first train to operate under the CB&W name was an eastbound coal train from Davis to Phoebus on October 3rd, 1898.
Over the next several years, the railroad began its westward expansion, increasing the number of coalfields served. By 1910 it hauled coal from 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 signing 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.