The Marshall and East Texas Railway Company was chartered on August 17, 1908, to acquire the Texas Southern Railway Company, which had been sold under foreclosure. The railroad had capital stock of $75,000, and the principal office was located in Marshall. Members of the first board of directors were Osce Goodwin, J. F. Strickland, M. B. Templeton, and J. J. Carter, all of Dallas; Albert T. Perkins, John F. Shepley, and N. A. McMillan, all of St. Louis, Missouri; and E. Key of Marshall. The Marshall and East Texas acquired 72 1/2 miles of track between Winnsboro in Wood County and Marshall in Harrison County. In 1909 the company extended its track seventeen miles in a southeasterly direction from Marshall to Elysian Fields, making a total operated mileage, including branches, of nearly 96 1/2 miles. The line owned eight locomotives and twenty-three cars in 1916 and reported passenger earnings of $23,000 and freight earnings of $164,000. However, the railroad became unprofitable as timber resources along the line were depleted, and was forced into receivership on January 25, 1917, with Bryan Snyder appointed receiver. The company was offered for sale in July of that year. There were no bidders, and the district court overseeing the receivership ordered operations to cease north of Marshall on August 15, 1917, and between Marshall and Elysian Fields on August 3, 1918. In September 1917 the line was again offered for sale in two segments, without any offers being received. In April 1920 the railroad was offered for sale in six segments. The thirty miles between Gilmer and East Winnsboro was sold to the Winnsboro and Gilmer Railroad Company, but this company never operated as a common carrier and its charter was forfeited in 1923. Two miles of track and the Marshall terminal were sold to the Texas and Pacific Railway. Subsequently, the segment between Marshall and Elysian Fields was sold to the Marshall, Elysian Fields and Southeastern Railway. The rest of the Marshall and East Texas was abandoned.