The Houston East and West Texas Railway Company was chartered on March 11, 1875, to build a narrow gauge railroad between Houston and Texarkana and to connect Houston with Corpus Christi and Laredo through Victoria and Goliad. Branch lines were projected to Tyler and Waco and from Goodrich to a point on the Sabine River. Only the line east of Houston was built, and then in the direction of Shreveport, Louisiana, rather than to Texarkana. The railroad was nicknamed the "Rabbit," and the line is still known by that name. The company's initials were said to stand for "Hell Either Way Taken." Paul Bremond was the first president of the railroad and invested most of his resources in the venture. Bremond was a firm believer in spiritualism and claimed that the spirit of Moseley Baker directed him to begin work on the HE&WT. The initial directors of the company were Bremond, F. A. Rice, S. C. Timpson, Henry Fox, W. D. Cleveland, Abraham Groesbeeck, and John Shearn. Other early stockholders included Thomas W. House, William R. Baker, Eber W. Cave, John T. Brady, William J. Hutchins, B. A. Botts, and Eugene Pillot. Many of the stockholders had been associated with Bremond during the early days of the Houston and Texas Central Railway Company. Construction of the HE&WT began on July 4, 1876. The first two locomotives, the Girard and the Centennial, were purchased by Bremond following their use at the Philadelphia Centennial Exposition. They arrived at Houston in late 1876. By April 1877 twenty miles had been completed. Cleveland, forty-three miles, was reached in the fall on 1878 and Livingston, seventy-one miles, a year later. The rails were laid to the railroad town of Lufkin, 118 miles, in 1882 and to Nacogdoches, 138 miles from Houston, by May 1883. The remaining fifty-three miles to the Sabine River were built by December 1885, and on January 26, 1886, the bridge was completed and the first train crossed between Texas and Louisiana. At the state boundary the 191-mile HE&WT connected with the affiliated forty-mile Shreveport and Houston Railway Company, and the two railroads formed a through line between Houston and Shreveport, Louisiana.
When the land grant law was repealed on April 2, 1882, the HE&WT had completed 120 miles of track and was entitled to receive 1,216,400 acres from the state. However, only sufficient land remained for the company to patent 787,200 acres in the Panhandle which it sold for $90,770. Bremond died on May 8, 1885, and his estate requested that the HE&WT be placed in receivership. A receiver, M. G. Howe, was appointed on July 8, 1885, and it was during the receivership that the line was completed to the Sabine River. However, the Union Trust Company of New York, which had purchased the first and second mortgage bonds of the HE&WT, intervened, and the railroad was sold under foreclosure to Elbert S. Jemison on August 2, 1892, under an agreement that ultimately resulted in the transfer of the railroad to a new HE&WT on May 6, 1893. The new company had been organized on February 28, 1893, under the original name and charter, with Jemison as president. Unfortunately, Bremond had made the ill-advised choice of narrow gauge for the HE&WT, which made a costly conversion necessary. On July 29, 1894, the entire line between Houston and Shreveport was converted from three foot gauge to 56½ inch gauge, which is commonly called standard gauge. In October 1899 the Southern Pacific Company gained control of the HE&WT. However, the railroad continued to be operated by its own organization until March 1, 1927, when it was leased to the Texas and New Orleans Railroad Company. The "Rabbit" was merged into the latter company on June 30, 1934.