History of railroads in Texas 1900-1970

The history of railroads in Texas from 1900 to 1970 is one of decline and resurgence, slow decay yet simultaneous slow innovation and growth. Railroads are equally resilient but slow to adapt. Two sides of the same coin.

The turn of the century – and the discovery of oil at Spindletop in 1901 - brought the advent of automobiles and the expansion of the highway system to Texas. For passengers, automobiles brought more freedom and flexibility, and for transporters of goods, the first mile and last mile became easier. The rise of cars and trucks on highways took a toll on the railroads.

Then, of course, the Great Depression of the 1930s forced many Texas railroads into bankruptcy and reorganization, including most of the pioneering railroads who established rail as a major mode of transportation in Texas in the 1800s. Declarants of bankruptcy included the Galveston, Harrisburg and San Antonio Railway, the Katy, the Texas and Pacific Railway and the International-Great Northern Railroad, all in the fateful year of 1933. Sometimes it’s good not to be a first mover in a new business.

Then came World War II. Like the rest of the economy throughout the United States, the railroad industry in Texas began to rebound, due to wartime increase in the demand for goods and transportation. With new and additional revenue, the railroads were able to modernize their equipment and infrastructure during the War. This helped to improve their efficiency and competitiveness.

In the post-war period, the railroad industry in Texas faced new challenges, including the growth of passenger airline service. But by the 1960s and 1970s, the railroad industry in Texas began to experience a resurgence. The growth of the oil and gas industry, perhaps ironically, led to an increase in the transportation of goods by rail, offsetting previous losses of passengers to cars. The growth of the beef industry in the post-war era also positively impacted Texas railroads. In the post-war economy, railroads began to invest in new technologies, such as containerization and early forms of intermodal transportation.

In this environment, a few new railroads came to Texas to focus exclusively on the transportation of goods. Notably, the Texas Mexican Railway (Tex-Mex) was chartered in 1950 as a subsidiary of the Missouri Pacific, and connected Corpus Christi with Laredo, and thus to the Mexican rail system. The St. Louis Southwestern Railway (SSW) expanded its operations in Texas in the 1950s through acquisitions and new construction.

The next big crisis – and opportunity – for railroads (and not just in Texas) comes with the passage of the Staggers Act in 1980. We will look at that in the next article, and that is where the modern era of railroads in Texas begins.