The Velasco Terminal Railway Company was chartered on July 29, 1891, as part of a plan to develop a deep water channel and port near the mouth of the Brazos River at Velasco. Promoters of the project included William M. D. Lee and John M. Ferguson, of Leavenworth, Kansas, and Capital Syndicate members Gustav Wilke, Abner Taylor, and Charles B. Farwell, of Chicago, Illinois. Three related companies were organized or acquired. The channel and docks were constructed by the Brazos River Channel and Dock Company, and the Texas Land and Immigration Company supplied the funds for the construction of the railroad. Although chartered to run between Velasco in Brazoria County and Arcola Junction in Fort Bend County, a distance of forty miles, only the twenty miles between Chenango Junction (later Anchor) and Velasco were constructed in 1891 and 1892. The Velasco Terminal later amended its charter to authorize construction of a branch line from Angleton to Alvin, but no additional track was built. In 1895 the company reported passenger earnings of $5,000 and freight earnings of $24,000 and owned one locomotive and two cars. The Velasco Terminal entered receivership on July 27, 1899, and was sold at a foreclosure sale to Harry Masterson on May 7, 1901. Masterson transferred the property to The Velasco, Brazos and Northern Railway Company on July 10, 1901.