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To break the Brownsville monopoly, Corpus Christi wool merchant Uriah Lott (1842-1915) incorporated the Corpus Christi, San Diego, and Rio Grande Narrow Gauge Railroad in 1875 to construct a railroad from Corpus Christi to Laredo.
Grading of the roadbed began in 1875, and track laying began on November 26, 1876.
As Lott's railroad slowly inched toward Laredo, the Ferrocariles Nacionales de Mexico, more commonly known as the Mexican National, began laying tracks from Nuevo Laredo, Mexico (situated directly across the river from Laredo) toward Monterrey, and Jay Gould's (1836-1892) International & Great Northern Railroad (I.&G.N.) began laying tracks toward Laredo via San Antonio.
In the summer of 1881, as Lott's line to Laredo neared completion, the syndicate financing the Mexican National chartered the Texas-Mexico Railroad Company which purchased Lott's railroad and changed the name of the line to Texas-Mexico Railroad. The Tex-Mex, as it was more commonly known, reached Laredo in November 1881.
The tracks of the I.&G.N. reached Laredo on December 15, 1881, connecting Laredo and northern Mexico to the U.S. national railroad system; the Mexican National reached Monterrey in 1883.
The Monterrey & Mexican Gulf Railroad completed its line from Tampico to Monterrey in 1891, taking from Brownsville most of the trade with the Mexican interior which had not already been lost to Laredo-Corpus Christi-San Antonio, leaving Brownsville with only the local trade.