General William J. Palmer came west after the Civil War to found the city of Colorado Springs and start the Denver & Rio Grande Railroad, a narrow-gauge line, in 1871. He purchased the land known as the Monument Farms & Lake Property. Palmer Lake was critical to the railroad because the steam trains chugged up to the Palmer Divide summit and had to fill up with water from the lake to head down the Divide. The lake was the only natural water supply available in the area. Passenger trains stopped in town for 10 minutes to take on water, or for a fee of $1.00 roundtrip from Denver, passengers could take the train to Palmer Lake for a day of picnicking, fishing, and boating or hiking.