The Galveston, Houston and Henderson Railroad Company was chartered on February 7, 1853, to build a rail link from Galveston through Houston to Henderson. Although it was supported in Galveston and Houston, much of the early financing was provided by investors in Holland and France. Construction of the “Old Reliable Short Line,” as the road was later called, began in 1854 at Virginia Point on the mainland opposite Galveston Island. However, the first rail was not laid until 1857 and, in 1859, the company finally reached Houston. For a number of years the GH&H was Galveston’s only rail connection, with the Texas railroad system centering at Houston.
In 1859, the first officers and directors of the GH&H were named. E. B. Nichols, who had recently built a large summer estate in Dickinson, served on the board of directors.
In October of 1859, the outskirts of Houston had been reached, but a yellow fever epidemic halted work for a time. A railroad bridge spanning Galveston Bay was completed in 1860. The bridge cost $100,000 and the draw span $25,000.
By 1861 the railroad had two engines, the “Perseverance” and the “Brazos.”
Tri-weekly train service was inaugurated between the outskirts of Houston and Virginia Point. Passengers and freight were transferred between Virginia Point and Galveston across Galveston Bay by the ferryboat. The trip took four hours and cost $2.00.
During the Civil War the railroad remained active, handling the traffic to and from the blockade runners reaching Galveston. The tracks and the Galveston Bay Bridge were used by Gen. John B. Magruder in his recapture of Galveston on January 1, 1863. In 1867, the bondholders of the original company forced the railroad into receivership. Over the ensuing four years, an acrimonious court battle was fought between the stockholders and bondholders before the Galveston, Houston and Henderson was ordered sold under foreclosure on December 15, 1871. A third company was organized under the original charter, which acquired and merged with the Galveston and Houston Junction Railroad Company later that month.