The Texas Southern Railway Company was chartered on March 12, 1897, to acquire from E. Key and associates the rights and properties of the Paris, Marshall and Sabine Pass Railway Company. The latter company had been sold to Key at a receiver's sale on October 4, 1892, and consisted of a completed line between Marshall and Harleton in Harrison County. In addition, the Texas Southern's charter authorized the company to construct a line from a point on the Red River north of Paris to Harleton, and from Marshall to the eastern boundary of Harrison County at the Louisiana line, a distance of about 125 miles. The company also had the right to build from Harrison County to Sabine Pass, a distance of about 200 miles. The office was at Marshall. Members of the first board of directors were D. H. Scott, Jonathan Martin, and B. J. Baldwin, Jr., all of Paris; and Key, E. J. Fry, W. C. Pierce, and W. M. Robertson, all of Marshall. In 1901 the line was extended seventeen miles between Gilmer and Ashland and the following year thirty-eight miles from Gilmer and East Winnsboro. The company was dependent on the lumber industry for its traffic base, and trackage was built or abandoned to meet the needs of the industry. In 1905 the railroad also built an eleven-mile-long spur, which was leased to the Lodwick Lumber Company. The Texas Southern entered receivership in 1904 and was sold on August 4, 1908. The railroad was subsequently acquired by the Marshall and East Texas Railway Company.