In the early days of Texas the need for modern transportation for expansion and commerce was realized. This realization was translated into one mode: the railway system. The 1870s saw the huge expansion of railway lines necessary for Texas' growth and no more necessary than here, in the port city of Galveston.

In 1873, there was strong competition between the cities of Houston and Galveston; and the Galveston, Houston, and Henderson Railroad was the only rail link between the two cities. The competition between Houston and Galveston was fed by the quarantines, which were often imposed on Galveston traffic by Houston. These quarantines occurred almost annually and were based on yellow fever outbreaks and epidemics. So, the citizens of Galveston decided to build their own railroad line that would reach across Texas, into the Panhandle, and across the state line to Santa Fe, New Mexico. The idea was to by-pass Houston completely. The Gulf, Colorado and Santa Fe Railroad Company (GCSF) was chartered, and the state agreed to grant sixteen sections of land per mile of track laid.

In 1874, Galveston County held an election for a subscription of five hundred thousand dollars to cover the stock of the company. This subscription required a favorable two-thirds majority of voters registered in Galveston County in order to pass. In 1874, there were about 5,150 registered voters in Galveston County, two-thirds of which would be over 3,430. At the time of the vote, the number of voters in favor however, numbered only 3,068. So, the county court declared 732 names on the voting list ineligible to vote, making the required two-thirds only 2,950. The subscription passed. The Railroad Gazette commented,

It seems just possible that at some future day when the tax imposed to pay the interest on this five hundred thousand dollars becomes irksome, exception may be taken to the legality of this action, and someone may suggest that the county court should have added to the registry the names of those who had become entitled to vote since the last election, which might have made a difference in the result.

Nevertheless, the vote stood.

While the charter passed in 1873, the actual construction of the line did not begin until two years later. The plans to initiate construction were formulated by the railroad's first engineer, General Braxton Bragg, former commander of the Confederate Army of Tennessee. At a meeting of the board of directors on February 8, 1875, the board resolved to negotiate for land for both a depot and the location of the line from Galveston to an intersection of the Galveston, Harrisburg, and San Antonio line. At other meetings in the early part of 1875, the board of directors asked for proposals for contracting the building of the bridge across Galveston Bay and for the laying of track to Arcola, Texas. On April 30, 1875, Henry Rosenberg, president of the Gulf, Colorado, and Santa Fe Railway Company, signed a contract with Burnett & Kilpatrick that included the construction of a bridge across the bay, complete with a lifting draw, for $69,000. The depot grounds were located between Thirty-seventh and Thirty-eighth Streets and Mechanic and Strand. The railroad line was to follow Mechanic Street to Sixtieth where it would be routed to the bridge.

On May 1, 1875, the first shovel of dirt was turned to begin construction of the Gulf, Colorado, and Santa Fe Railroad. As soon as the ground was broken, work commenced. By May 28, the line was permanently located as far as Arcola with surveys made as far as the Brazos River.

In March 1876 work was halted when the GCSF came under suit. E. T. Austin, in appeal of the judgment of a previous suit, objected to the tax levied in Galveston County to provide funds for the rail line. He argued that the law to which the Galveston County Court referred when holding the election in 1874 was unconstitutional, that two-thirds of the voters in Galveston County did not vote in favor of the proposition, and that the railroad did not complete the amount of line under the conditions stipulated in its charter. Ultimately, the court passed judgment in favor of the railroad, and the work continued.