The Gulf and Inter-State Railway Company was chartered by C. J. and N. C. Jones and associates on May 19, 1894, to build a railroad from Port Bolivar to the Southern Pacific line in Liberty County. Four months later, when arrangements with the Southern Pacific fell through, the name was changed to Gulf and Inter-State Railway Company of Texas, and the proposed destination was altered to a point on the Red River in Fannin or Grayson County. A branch line from Rollover, a station in Galveston County, to the Sabine River in Newton County was also added. Despite the grandiose plans, the company built only the seventy miles of track from Port Bolivar to Beaumont, completed in 1896. The company capital was $200,000. The principal place of business was Port Bolivar. The members of the first board of directors were C. J. Jones of Penny, Oklahoma; L. E. Steele of Galveston; N. C. Jones of Garden City, Kansas; H. L. McWilliams of Houston; L. E. Beadle of Kansas City, Kansas; and A. J. Johnson, H. B. Knight, W. E. Scott, and Franklin Babcock, all of Port Bolivar.
Interested in developing a new port on the upper Texas coast, L. P. Featherstone and Fox Winnie, contractors for the G&I, acquired the railroad in 1898. In conjunction with this development plan, the Santa Fe Railway organized the Santa Fe Dock and Channel Company to build docks and rail arteries at Port Bolivar. Although Featherstone wanted his railroad to be known as the "Lighthouse Route," the public generally referred to it as the "Gee Ni."
The line has had a remarkable history. The terrible Galveston hurricane of 1900 destroyed the G&I's tracks between Port Bolivar and High Island. The Galveston-bound passenger train was trapped near Port Bolivar by the storm, and it took three years for the company to finance and complete the repairs to its track. On September 24, 1903, the passenger train again left Beaumont and arrived at Port Bolivar, slightly over three years late. Storm damage forced the company into receivership on September 21, 1900, but it was subsequently returned to its owners. Storms again washed out the exposed line on Bolivar Peninsula in 1909 and 1915, although repairs on the latter two occasions took only nine months.
The railroad operated daily passenger service until 1930, when operations were reduced to a tri-weekly mixed train between Port Bolivar and Beaumont. A number of cattle-shipping pens and flag stops made the train's schedule "highly irregular," according to one observer. The railroad also operated a ferry for freight and passengers between Bolivar and Galveston. In 1903 the G&I reported passenger earnings of $5,000 and freight earnings of $7,000 and owned three locomotives and thirty-five cars. The Atchison, Topeka and Santa Fe Railway Company acquired the line through its subsidiary, the Santa Fe Land Improvement Company, on January 17, 1908, and leased it for operation to the Gulf, Colorado and Santa Fe on July 1, 1914. The twenty-seven miles between Port Bolivar and High Island was abandoned in 1942, and another four miles at the latter point was discontinued in 1968. On November 14, 1994, the remaining twenty-seven miles of track between Beaumont and Stowell was absorbed by the Santa Fe.