The East Texas Railway Company was chartered on April 29, 1880, to connect Sabine Pass with Troupe, in order to provide the Kountze interests of New York an outlet for their timber acreage in East Texas. The railroad had a capital stock of $4 million, and the principal place of business was Beaumont. The members of the first board of directors were Augustus Kountze, Erwine Davis, and Jacob Van Wagener, all of New York City; Thomas W. House, Josiah F. Crosby, and E. P. Hill, all of Houston; and B. D. Crary of Beaumont. The railroad built thirty miles of line from Sabine Pass to Beaumont in January 1881 and another twenty-four miles to Kountze in July. On August 3, 1881, the road was renamed the Sabine and East Texas Railway Company, which completed an extension to Rockland by March 1882 for a total of 103 miles of track. C. P. Huntington purchased the line and transferred it to the Texas and New Orleans Railroad on October 28, 1882.