Mears hoped to run a railroad from Silverton to Mineral Point and possibly on to Lake City, following practically the same route as the wagon road he had built twelve years previously. C. W. Gibbs, chief engineer, made surveys from Silverton to Eureka in both 1889 and ’90 but nothing was immediately attempted, probably because of all effort and money going toward the construction of the Rio Grande Southern. However, two miles from Silverton to Waldheim were built in 1893 as an extension of the Silverton Railroad. According to San Juan County records the Silverton Northern was incorporated on September 20, 1895. Fred Walsen was the president, Otto Mears the vice-president and Alex Anderson the secretary-treasurer. Construction began at the North Star bridge, the end of the first piece of railroad, in late April of 1896 and the 6½ miles were completed to Eureka in late June. The transfer of the property from the construction company to the railroad company was made on July 1st. Silverton Northern books gave the cost of construction as $272,400. Meanwhile the first two miles had been transferred from the Silverton Railroad to the Silverton Northern. A big celebration took place at Eureka on the completion of the line and Mrs. Edward G. Stoiber drove the golden spike. A picture is extant which shows the crowd there. S. R. Engine 101 was transferred to the S. N. but henceforth was to go by the number of 1. Of course, the company could borrow a locomotive or other equipment from the S. R. or the D. & R. G. as needed. Ever since the panic of 1893 with its demonetization of silver, mining in the San Juan had been seriously crippled but, since the Sunnyside mine near Eureka and the Silver Lake mine near Waldheim produced good values in gold, the S. N. could make a profit. Mining men, Mears among them, had great hopes that mining would revive as of old if William Jennings Bryan could be elected as president. Bryan, it should be remembered, was running in 1896 on a platform of silver coinage at 16 to 1 with gold. When he was defeated Mears lost hope for any improvement in mining and moved to the East where he took up several projects. One was the building of the Chesapeake Beach railroad from Washington to the beach. Another was the promotion of the Mack Truck Co. with himself as the first president. He, at that early date, saw the possibilities of automobile transportation. Though Mears stayed in the east until 1907 he exercised a strong supervision over his San Juan railroads and made a number of trips back to the country to oversee them. In 1901 the company owned one locomotive, one passenger coach, ten box cars and one service car. For the year ending June 30, 1901 it had operated 3376 miles of mixed and 1310 miles of passenger service. In 1902 it paid a dividend of 10%.