In 1889, the Dunderberg Spiral Railway Corporation formed with the goal of building a hotel at the top of Dunderberg. Tourists were to reach the hotel by means of a steam-powered railway. For the descent, the cars would be powered simply by gravity as the 12-mile (19 km) track wound its way back to the base of the mountain, like a roller coaster, affording scenic views of the Hudson and reaching speeds of up to 50 miles per hour (80 km/h).
Directors of the Dunderberg corporation included Henry J. Mumford, who with his brother H.L. Mumford, operated the former Mauch Chunk Railroad of similar design as a successful and well-known tourist attraction during the 1870s in what is now Jim Thorpe, Pennsylvania. The Mauch Chunk Railroad, originally designed for a coal mine, became the inspiration for modern amusement park roller coasters.
Funding for the Dunderberg project ran out in 1891 and the system was never completed; the reasons for the failure remain unclear.
One theory holds that the facility was planned as part of the Columbian Exposition of 1893. Verplanck's Point (south of Peekskill) is said to have been considered as a possible location during the planning stage of the Exposition, and it is possible that the funding for the hotel and the railway collapsed after Congress awarded the location to Chicago instead. Although the theory is persistent, no clear documentation has been found to support it.
Today, ruins and some signs of the Spiral Railway construction are still visible. The graded areas can be accessed from the Ramapo-Dunderberg and the Timp-Torne trails, and became somewhat popular for walking following publication of William Howell's two volumes of hiking diaries called "The Hudson Highlands" in 1933 and 1934, and reprinted by "Walking News" in 1982.