Transportation was a major problem facing early settlers in Texas. As late as 1850 the settled area of the state was largely confined to the river bottoms of East and South Texas and along the Gulf Coast. Although steamboat navigation was common on the lower stretches of a number of such rivers as the Rio Grande, Brazos, and Trinity, Texas rivers were not deep enough for dependable year-round transportation. Roads were either poor or nonexistent and virtually impassable during wet weather. Ox carts hauling three bales of cotton could only travel a few miles a day and the cost of wagon transport was twenty cents per ton mile. Many proposals to improve internal transportation were both considered and attempted during the period of the Republic of Texas and early statehood. These included river improvements, canals, and plank roads in addition to railroads. However, it was the railroads that made the development of Texas possible, and for many years railroad extension and economic growth paralleled each other.
On December 16, 1836, the First Congress of the Republic of Texas chartered the Texas Rail Road, Navigation, and Banking Company to construct railroads "from and to any such points...as selected." This occurred less than ten years after the first public railroad was chartered in the United States. Although many leading citizens were included among its incorporators and it had the sanction of Stephen F. Austin and Sam Houston, the scheme aroused the public's suspicions, mainly due to the banking and monopoly provisions attached to the charter. These were bitterly attacked by many Texans, including Anson Jones and Houston newspaper editor Francis Moore, Jr. The charter and the company it would create became a major issue in the second congressional elections. Although the company was still active in mid-1838, it collapsed soon after without making any attempt to build a railroad.
However, the problem of transporting goods to market and travel remained acute. Three additional railroad charters were granted by the Republic of Texas to run from Galveston Bay, from Harrisburg, and from Houston to the Brazos Valley. Two of the companies, the Brazos and Galveston Rail-road and the Harrisburg and Brazos Rail Road, were tied to real-estate promotion schemes. Although all three companies awarded contracts, none was able to construct a railroad. The Harrisburg and Brazos, subsequently chartered as the Harrisburg Rail Road and Trading Company with Andrew Briscoe as its first president, graded about two miles and made other efforts to construct a railroad before it, too, ended in failure. However, the Harrisburg project was the precursor for the first successful railroad in Texas. In early 1847 Gen. Sidney Sherman acquired the Harrisburg town lots and surrounding land from Briscoe and his associates, and later that year he was successful in attracting northern capital to his project. This led to the chartering of the Buffalo Bayou, Brazos and Colorado Railway Company on February 11, 1850. Among the other incorporators were William Marsh Rice and John Grant Tod, Sr., from Texas, and Bostonians Jonathan F. Barrett, Elisha H. Allen, and John Angier. Work on this railroad began in 1851, and the first locomotive, named for Sherman, arrived in late 1852. The initial twenty-mile segment from Harrisburg (now a part of Houston) and Stafford's Point (now Stafford) opened by September 7, 1853. The Buffalo Bayou, Brazos and Colorado was not only the first railroad to operate in Texas, it was the second railroad west of the Mississippi River and the oldest component of the present Southern Pacific.
In 1848 Ebenezer Allen of Galveston obtained a charter for the Galveston and Red River Railway Company. The project remained dormant until taken over by citizens of Houston and Washington County. On January 1, 1853, Paul Bremond and Thomas W. House broke ground for the Galveston and Red River. Although initial progress was slow the company opened its first twenty-five mile segment between Houston and Cypress on July 28, 1856. Shortly thereafter, the name of the railroad was changed to the Houston and Texas Central Railway Company. Before the end of 1856 the city of Houston completed its seven-mile line, known as the Houston Tap, to a junction with the Buffalo Bayou, Brazos and Colorado. Other railroads were soon active. By the end of 1861 there were nine railroad companies with about 470 miles of track in Texas. Five of the railroads were centered in the Houston area, and all but one ran from either a seaport or river port. There had already been a merger between the Houston Tap and the Houston Tap and Brazoria Railroad Company, which occurred in 1858.
Although all of the companies operated for relatively short periods of time, they had already caused major changes and improvements in travel and transportation in Texas. A writer to the Houston Tri-Weekly Telegraph recalled a trip by stage from Houston to the Hockley area in December 1854 following ten days of rain. The thirty-five mile trip took nearly 1½ days and included an overnight stop. In May 1857 the writer made a similar trip aboard the Houston and Texas Central in one hour and forty minutes. In December of the same year the Telegraph stated that although there was high water in the Brazos, no boats had been reported on the river as the railroads had already handled all of the business. When State Engineer William Fields inspected the first five miles of the San Antonio and Mexican Gulf Railroad in February 1858, he reported that trains carrying passengers and freight operated two or four times a day over the short section extending from Port Lavaca. The terminal was a point on the prairie distant from any settlement or public highway. However, numerous teamsters sought out the terminal to transship their goods to or from the railroad.
There was insufficient local capital in Texas to finance the early railroads, and eastern and foreign capitalists were hesitant about investing in a frontier state. Incentives were necessary and took three major forms. Between 1850 and 1876, when the practice was prohibited by the Constitution, individual cities and counties issued about $2.4 million in bonds to aid railroad construction. The state, however, provided the major incentives in the form of land grants and loans. Six of the antebellum railroads borrowed $1,816,500 from the Special School Fund at the rate of $6,000 per mile of track. The railroads repaid $4,172,965 in principal and interest. Only one of the carriers, the Houston Tap and Brazoria, defaulted, and the state was able to recover some of the debt by foreclosing and selling the railroad.
As early as 1852 the charter for the Henderson and Burkville Railroad Company called for a land grant of eight sections of land for each mile of railroad. Other charters received the same provision, but the size of the land grant was too small to attract much interest. A general land grant law was passed in 1854 that authorized sixteen sections per mile. This law was in effect until the new Constitution of 1869 prohibited land grants. An 1874 Constitutional amendment permitted land grants, and in 1876 a new law, similar to the original 1854 law, was passed. The land grant provision was repealed in 1882 when no unappropriated vacant land remained. Estimates of the amount of land actually granted range from 27,000,000 acres to about 35,780,000 acres. The railroads received a net of about $1.34 when they disposed of the land.
Three railroads, the Texas and New Orleans Railroad Company, the Eastern Texas Railroad Company, and the Washington County Rail Road Company, were completed and opened after the outbreak of the Civil War. Other operating companies, such as the Houston and Texas Central, were forced to suspend their construction efforts. Additional railroads, such as the Memphis, El Paso and Pacific Railroad Company and the Indianola Railroad Company, had graded rights-of-way or had construction materials on hand, but were unable to resume construction until much later. Although most of the Texas railroads did not suffer the depredations inflicted elsewhere in the South, all were in bad physical condition at the close of hostilities. Four years of constant use without materials or manpower for repairs had taken their toll. The Texas and New Orleans was forced to shut down between Beaumont and Orange. In addition, the rails of the Eastern Texas between Beaumont and Sabine Pass had been removed to be used for fortifications and other military needs. General John B. Magruder ordered the destruction of the San Antonio and Mexican Gulf to prevent its falling into the hands of enemy forces. The Southern Pacific Railroad Company (later a part of the Texas and Pacific and not related to the present Southern Pacific) had been required to remove part of its line between Marshall and Swanson's Landing on Caddo Lake and to relay the rails to connect with the Vicksburg, Shreveport and Texas Railway Company near the Louisiana line, thus forming a route between Marshall and Shreveport, Louisiana. Late in the war one short line was constructed in Houston when the Galveston and Houston Junction Railroad built a bridge across Buffalo Bayou, connecting the Galveston, Houston and Henderson Railroad Company with the Houston and Texas Central.
Although it was the decade of the 1870s before any significant new mileage was constructed in Texas, the Houston and Texas Central was able to resume construction in 1867. The company built steadily northward, reaching Corsicana in 1871, Dallas in 1872, and the Red River in 1873. At the same time, the company, having acquired the Washington County, began work on its Western Division, reaching Austin on Christmas Day in 1871. Meanwhile, the Missouri, Kansas and Texas Railway Company reached Denison from the north on December 24, 1872, and with the completion of the Houston and Texas Central to that point the following year, the Texas railroad system was finally connected to the nationwide network. The San Antonio and Mexican Gulf was also rebuilt during the late 1860s by the occupying military forces.
The Houston and Great Northern Railroad Company was the first major new railroad to start construction after the war. Beginning at Houston in December 1870, the company reached Palestine in September 1872. During the same period the International Railroad Company built from Hearne to Palestine and on to Longview. The two companies merged to form the International and Great Northern Railroad Company in 1873. By 1876 the International and Great Northern had completed a line from Hearne to Austin. In northeast Texas the Texas and Pacific Railway Company acquired the Southern Pacific and the Memphis, El Paso and Pacific and finished a line from Texarkana to Dallas and Fort Worth. Other lines constructed during the decade included the extension of the Galveston, Harrisburg and San Antonio Railway Company, formerly the Buffalo Bayou, Brazos and Colorado, from Columbus to San Antonio during the years 1873 to 1877. The Texas and New Orleans, which totally shut down in 1868, briefly reopened in 1870 before discontinuing service again. By 1876 the company had been rebuilt and was again operating between Houston and Orange. Work also began on the Gulf, Colorado and Santa Fe Railway Company as well as on several shorter railroads, including the Houston East and West Texas Railway Company and the East Line and Red River Railroad Company.
By the end of 1879 railroad mileage in Texas had reached 2,440 miles. The railroad system in eastern Texas was becoming well developed, but there was less than 100 miles of track west of a line drawn from Denison through Fort Worth, Austin, San Antonio, and Cuero. All this was about to change as during the next ten years more than 6,000 miles of railroad was constructed in the state. More than 4,000 miles was built during the years 1881, 1882, and 1887 alone. Between 1880 and early 1883 both the Galveston, Harrisburg and San Antonio and the Texas and Pacific built across West Texas to El Paso, forming two transcontinental routes across the state. Another major line built during this period was the Fort Worth and Denver City Railway Company, which stretched from Fort Worth to the New Mexico border, thus becoming the Texas portion of a line to Denver. Other major additions included the extension of the International and Great Northern to San Antonio and Laredo and the completion of the main line of the Gulf, Colorado and Santa Fe.
During the 1880s the first railroad systems were developed as a number of the independently owned Texas companies were bought by outside interests that controlled railroads in other states. The Southern Pacific acquired an interest in the Galveston, Harrisburg and San Antonio and ownership of the Texas and New Orleans and the Houston and Texas Central, as well as several smaller companies, while the Gulf, Colorado and Santa Fe became a subsidiary of the Atchison, Topeka and Santa Fe Railroad Company. Jay Gould gained control of a number of Texas railroads, including the Texas and Pacific, the International and Great Northern, and the Missouri, Kansas and Texas (Katy). He leased the International and Great Northern to the Katy and both the Katy and the Texas and Pacific to his Missouri Pacific Railroad Company. Although the initial Missouri Pacific foray into Texas was soon to end and the various leases terminated before the end of the decade, all of the railroads, with the exception of the Missouri, Kansas and Texas, were to remain firmly in Gould's control until well into the twentieth century.
Despite power given to the state by the Constitution of 1876 to act against railroad abuses, and subsequent laws prohibiting rebates, by the mid-1880s shippers, farmers, and many state and local officials were protesting what they perceived to be high rates, rebates, traffic pools, and other restrictive practices. Railroads, the most powerful industrial force in Texas, were accused of running the state through bribery, hidden monopolies and controls, and favoritism to officials while profits, such as they were, went to outside capitalists. In 1888 Attorney General James S. Hogg filed several lawsuits, mainly against the Gould railroads, alleging that their control by companies chartered outside of the state were in violation of the Texas constitution. He also obtained a court decision against rail pools that set rates and divided available traffic among the larger systems. The success of these suits forced the reshuffling of the Gould empire and led to the termination of the lease of several Texas railroads by outside companies. In 1890 Hogg was elected governor with the establishment of a state railroad commission as the main issue in the race. Using rail reform as his key, Hogg won an overwhelming victory in the race despite bitter opposition from several Texas newspapers, notably the Dallas Morning News. The Railroad Commission, created in 1891, became one of the most powerful regulatory bodies in the state.
At the beginning of 1900 there was still less than 10,000 miles of railroad in Texas, which represented about five percent of the railroad mileage of the United States. Although only twenty-five percent of the national system, which peaked in 1916, was built after 1899, nearly forty-five percent of the Texas mileage was built between 1900 and 1932, when mileage reached 17,078. At the turn of the century the lower Rio Grande valley had virtually no railroad mileage, while vast areas of the South Plains, Panhandle, and West Texas were also without railroads. These voids were filled over the next thirty years. New railroads were also constructed in the more developed areas of Texas. Two additional lines were completed between Dallas-Fort Worth and Houston, while a second railroad was built connecting Houston and New Orleans. In 1911 Texas became the state with the most railroad mileage, a position it still maintains.
In 1901 there also began a flurry of construction on electric interurban railways. About 500 miles of electric interurban tracks was constructed in Texas. The first such interurban was the ten-mile Denison and Sherman Railway, which began service between the two cities in May 1901. The largest company was the Texas Electric Railway, with 226 miles centered at Dallas. This company was also the largest interurban between the Mississippi River and the Pacific Coast. The Galveston-Houston Electric was for years the fastest interurban line in America, while the Northern Texas Traction Company, between Dallas and Fort Worth, was considered one of the best engineered lines. The smallest interurban was the 4½ mile Roby and Northern, which electrified an existing steam railroad in 1923. The last interurban railway developed in the United States was the Houston North Shore, which opened between Houston and Goose Creek and Baytown in 1927. The Houston North Shore became a subsidiary of the Missouri Pacific and, while it offered frequent passenger service, was a major freight carrier from the beginning. It was operated by electricity until 1948 and ran replacement railbuses until 1961. The former Houston North Shore, the last vestige of the Texas interurban system, continues to operate as an important branch of the Missouri Pacific. With the exception of the Houston North Shore, few of the interurbans developed extensive freight operations and were solely dependent on passenger traffic, which made them easily susceptible to competition from private automobiles. Most of the interurbans were abandoned in the 1930s. Only the Roby and Northern, abandoned in 1941, the Texas Electric, which abandoned its last line in 1948, and the Houston North Shore lasted until the 1940s. The Texas Transportation Company, a short switching line at San Antonio, continues to be electrically operated, although it was never a part of the Texas interurban system.
In 1920 there were still a number of major independent railroads in Texas. The Gould system, which in 1900 had controlled several railroads, including the Texas and Pacific, International and Great Northern, and the St. Louis Southwestern Railway Company of Texas, had broken up and all three companies were now independent. The Gulf Coast Lines, whose major Texas components were the St. Louis, Brownsville and Mexico and the Beaumont, Sour Lake and Western Railway Companies, had been financed by the St. Louis and San Francisco Railroad Company, but had been separated from their parent as a result of the 1914 receivership. The Missouri Pacific, which had no presence in Texas, began to buy stock in the Texas and Pacific in 1918. In the mid-1920s the Missouri Pacific built an extensive system by acquiring the New Orleans, Texas and Mexico Railway Company and through the NOT&M the balance of the Gulf Coast Lines, the International-Great Northern, and a number of smaller companies. The Santa Fe and the Southern Pacific also bought other Texas railroads during the 1920s. In 1932 the Southern Pacific Company acquired the St. Louis Southern Railway Company and its Texas subsidiaries. By the end of 1932 three systems, the Southern Pacific, Missouri Pacific, and Santa Fe, owned or controlled more than 11,700 miles or seventy percent of the railroad mileage in Texas.
When the Texas Legislature passed the Law to Regulate Railroads in 1853, it required that the railroads operating in the state be headquartered in Texas. This requirement was later included as part of Article X of the Constitution of 1876. As a result the various railroad systems operating in Texas did so through subsidiary companies. Some, such as the Southern Pacific, Missouri Pacific, and the Santa Fe, retained the corporate names of Texas railroads they had acquired. Others, such as the Missouri, Kansas and Texas, chartered separate subsidiaries to operate in Texas. However, the Transportation Act of 1920 gave additional regulatory powers to the Interstate Commerce Commission. In 1934 the Kansas City Southern Railway Company sought to lease the Texarkana and Fort Smith Railway Company lines in Texas. Although the Interstate Commerce Commission gave approval to this lease, the state of Texas fought the case to the Supreme Court of the United States, which upheld the federal agency. The Missouri Pacific and its subsidiaries came out of receivership in 1954, at which time all of the companies in Texas operating as part of the Missouri Pacific Lines were merged into the parent company. The Katy merged its Texas subsidiary in 1960, while the Southern Pacific merged the Texas and New Orleans in 1961. The Santa Fe followed suit in 1965. The last of the separate Texas railroads was the Fort Worth and Denver, which merged into the Burlington Northern Railroad Company in 1982.
The Burlington-Rock Island Railroad Company inaugurated the first streamlined diesel passenger service in 1936, when the Sam Houston Zephyr began operating between Houston and Dallas-Fort Worth. Shortly thereafter the Texas and New Orleans acquired streamlined equipment pulled by a steam locomotive for its Sunbeam between Dallas and Houston. By 1938 both companies were providing double daily streamliner service between Houston and North Texas. In 1940 the Fort Worth and Denver inaugurated the Texas Zephyr between Dallas and Denver, Colorado. In the optimism following the end of World War II, the various railroads ordered new equipment for their major trains. Existing trains such as the Texas Special, operating between St. Louis and San Antonio, and Sunset Limited, running between New Orleans through Texas to Los Angeles, were streamlined, while other railroads added new trains. These included the Texas Chief between Chicago and Houston-Galveston on the Santa Fe and the Texas Eagle of the Missouri Pacific and the Texas and Pacific operating between St. Louis and all of the major Texas cities.
Although these trains were initially well patronized, the improvement in highways, primarily the construction of the interstate highway system, and the inauguration of jet air transportation siphoned off most of the rail passenger traffic. By 1970 only the Santa Fe and Southern Pacific were still operating passenger trains in Texas. On May 1, 1971, the remaining trains were turned over to the National Railroad Passenger Corporation, better known as Amtrak. Amtrak chose to continue the Sunset Limited on a triweekly basis and initially operated the Texas Chief between Houston and Chicago. This train, later renamed the Lone Star, was subsequently discontinued. The only other Amtrak route in Texas at the end of 1995 was the Texas Eagle, operating from Chicago to San Antonio on a triweekly basis. Unlike several other states, Texas did not fund additional passenger train service. This, along with the failure of the proposed Texas high-speed rail connecting the four major cities to obtain financing, meant that additional rail passenger service in Texas was unlikely. However, several operators have attempted to operate excursion trains on a regular basis. These have included runs over the Texas Mexican Railway between Corpus Christi and Laredo, the Texas Limited between Houston and Galveston, and a dinner train operating out of San Antonio. All three have discontinued service. In 1995 three steam passenger trains were in operation. These were the Texas State Historical Park between Rusk and Palestine, the Austin Steam Train Association between Cedar Park and Burnet and the Tarantula Train at Fort Worth.
Texas continues to have more railroad mileage than any other state and the largest number of railroad employees. In 1992 chemicals accounted for thirty percent of the railroad tonnage originating in the state, while agricultural products, the leading category during the early years, accounted for only seven percent. Coal represented the largest category of rail tonnage terminating in Texas. The state is second only to Virginia with its extensive coal shipping piers in the amount of coal terminated.
The passage of the Staggers Act in 1980 deregulating railroads resulted in a new era for the companies as they were now able to compete on the basis of rates as well as service. In addition, the act also allowed the railroads more freedom in abandoning or selling marginal branch lines. With these changes the major freight railroads have been able to attract additional business and better concentrate their resources, resulting in the best physical plant in their history. At the same time some of the historic Texas lines, such as the Roscoe, Snyder and Pacific Railway Company, no longer had a role to play and were abandoned. This was offset by a number of new companies, such as the South Orient Railroad Company, which were organized to acquire and operate secondary and branch lines no longer wanted by the major companies. These new railroads have attempted to preserve rail service over lines which otherwise may have been abandoned.
In 1992 the Association of American Railroads recognized forty different railroads operating in the state, of which seventeen had been formed since deregulation. These lines operated a total of 11,285 miles of track, which represented a decrease of about thirty-three percent since the peak reached in 1932. The forty companies represent the remainder of some 300 railroads that have operated in the state. The merger of Texas railroads that began in 1858 with the combination of the Houston Tap and the Houston Tap and Brazoria continues. Major changes in recent years include the merger of the Texas and Pacific into the Missouri Pacific in 1976 and the merger of the St. Louis-San Francisco Railway Company into the Burlington Northern in 1980. The Union Pacific Corporation acquired the Missouri Pacific in 1982, and the operations of the Missouri Pacific and the Union Pacific Railroad were subsequently consolidated. However, the Missouri Pacific still remains a separate company and in 1989 merged with the Missouri-Kansas-Texas. On September 22, 1995, the Burlington Northern and Santa Fe merged to form the Burlington Northern and Santa Fe Railroad.