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From Glen F on Flickr: This attraction was originally based within the Mystery Spot attraction premises in 1960. It was built by Mackinac Amusement Company. It originally ran along Silver Lake, the total trip was 19 minutes. The owners of the train and Mystery Spot had a disagreement and the train was either moved or re-rerouted depending on who you talk to. The locomotive used was a B20 Ottaway Streamliner, a design based on the futuristic GM "Aerotrain" which was built new for the company by the Ottaway Amusement Company of Wichita, Kansas.
The following year (1961) a second locomotive was added from Chance Rides, one of their steam-outline "CP Huntington's". This was the fourth one they built (hence the number 4 on the side). The tradition of putting the locomotive works number on the side is still mostly continued today and they're now up into the 400s.
In 1962, apparently after a disagreement, the railroad became an independent attraction and the sole property of Emil Syversen, one of the original partners. The track was rerouted away from the Mystery Spot and a new station and parking lot was built on the main US-2 road to the south. The railroad seems to have closed in the 1980s. The original building was moved to the Deer Ranch attraction nearby.
The #4 (C.P. Huntington) was sold to Story Land in Glen, New Hampshire and is still in service. Also confirmed that the Ottaway Aerotrain was sold to the Ellis Railroad Museum in Ellis, Kansas (apparently in 1993). It also is still in service.