The Colorado Valley Railway Company was chartered on April 26, 1897, to connect Colorado City, in Mitchell County, with San Angelo, seventy-five miles to the south in Tom Green County. The capital stock was $500,000. The members of the first board of directors were C. B. Holmes, Irving Wheatcroft, J. H. Burroughs, J. W. Reed, L. H. Brightman, W. C. Barron, F. Buchanan, J. B. Latham, and L. B. Murray, all of Robert Lee in Coke County, where the principal office was located. At a stockholders meeting held on July 21, 1897, the route was changed to run between Sweetwater and San Angelo via Robert Lee. In 1889 the railroad built seven miles of track from Sweetwater and was acquired by the Panhandle and Gulf Railway Company in that year.