The construction of a railway in Tasmania was first considered in the years immediately following the establishment of responsible government (1856) the first line being planned to run between Longford and Deloraine. In 1865 the Tasmanian Government agreed to raise the bulk of the capital needed to finance the construction of a line between Launceston and Deloraine. In 1867 the Launceston and Western Railway Company was formed. The Duke of Edinburgh turned the first sod on 15 January 1868 to commence construction of a line which was to be 45 miles long with a gauge of 5'3". Construction proceeded and on 19 August 1869 an excursion trip gave citizens of Launceston their first opportunity to travel by train. On 10 February 1871 the line was ready for its official opening with normal services beginning the 14th. The opening of the line however found the company in serious financial difficulties as rising costs had forced it to borrow additional funds. To ensure that the line between Launceston and Deloraine remained open the Tasmanian Government took over the company and so the Tasmanian Government Railways was born. The late 1870s saw increases in traffic on the line which led to an improved financial position which allowed for additional investment in rolling stock.The extra rolling stock was built at the Launceston Railway Workshops and supplemented the original equipment which had been imported from England.
The next stage in the development of the Tasmanian Government Railways involved the Mersey and Deloraine Training Company which had been formed in 1864 to link Deloraine with the North West Coast using a line with a 4'6" gauge. This company also found itself in financial difficulties and when it opened early in 1872 had only 16 3/4 miles (27.9km) of track. Traffic response was much poorer than anticipated and after only 4 months of operation the company was forced to retire its only engine. Thereafter the line was worked by horses between Latrobe and Railton for seasonal produce traffic. The company was absorbed into the Tasmanian Government Railways by 1885 and its track dismantled and replaced with a 3'6" gauge line. The third major stage in the development of the Tasmanian Government Railways involved the Tasmanian Mainline Railway Company which agreed, in March 1872, to build a 3'6" gauge line between Hobart and Launceston provided the government was prepared to meet the interest charges on the capital, which it was prepared to do. The line between Hobart and Launceston was the most ambitious scheme launched in the Colony, its length being 122 miles (203km). Engineering works involved the line needing to traverse 3 major divides in the Hills; a tunnel 1.25km long to be bored through solid rock; gradients of 1 in 40 were common together with sharp curves and horseshoe bends. Construction began simultaneously from Northern and Southern ends in 1873. December 1875 saw completion of the last 9km of track between Antill Ponds and Tunbridge and on 13 March 1876 Mainline trains began running into Launceston. Before this they had terminated at Evandale because of differences in rail gauge.
During the 1880s Tasmania emerged from 20 years of recession thanks to mineral discoveries on the West Coast and increased demand for Tasmanian primary produce on the Mainland. This led, in 1882, to a decision by the government to authorise the building of a network of 3'6" gauge lines as it felt that the construction and development of railways could be more effectively undertaken by the State. During the ensuing years a number of new lines and branches were constructed. Although during the 1880s the financial position of the Mainline Company improved relations with the government were not cordial and as a result the most satisfactory solution was for the government to purchase the company as it had done with the Launceston and Western Railway. Accordingly on 1 October 1890 the company was absorbed by the Tasmanian Government Railways. The acquisition of the Tasmanian Mainline Railway Company linked the various 3'6" gauge lines which led to more efficient usage of Plant, Equipment and personnel. During the 1890s Tasmania suffered a severe financial depression which, combined with the fact that a number of branch lines were not paying their way, brought railway construction to a virtual halt. In 1898 an 18 mile (30km) line of 2'0" gauge was opened between Zeehan and Williamsford. The line is of interest because its narrow gauge proved to be efficient for use in mountainous country. The principal traffic on the line was ore from the mine at Williamsford. Between 1902 and 1910 there were 3 additional branch lines opened on this line. Additionally traffic from privately owned lines was hauled over the T.G.R. track to the Silver Bell smelter. With the establishment of the narrow gauge system the T.G.R. moved its West Coast workshops from West Zeehan to Strahan making it one of the three main railway centres together with Hobart and Launceston. Also during the 1890s the T.G.R. commenced a program of gradual improvement to existing lines which was to continue until the Great War. Additionally, in 1892, six new locomotives were delivered to haul express trains between Hobart and Launceston. The early 1900s saw new rolling stock being built and in 1912 two more locomotives were purchased for the Hobart - Launceston run. To further improve efficiency a new goods yard which gave direct access to the main overseas shipping terminal in Hobart was opened in 1915 and in Launceston a large roundhouse with accommodation for 44 engines replaced the old workshops and sheds. The decade following Federation saw rapid growth in both mining and agriculture. As a result Parliament was increased the number of branch lines so as to open up new country. By 1924 the T.G.R. had 1080km of 3'6" track compared with 735km of track in 1908.
The 20 years to 1939 were not easy for the T.G.R. During the period the T.G.R. attempted, to adapt the railway system to the needs of the passengers and the new secondary industries being established in the State. It was realised that if passenger revenue was to be maintained improvements would need to be implemented to services especially on the secondary lines where mixed trains (passengers and freight) often subjected travellers to long delays. To overcome this problem rail motors were placed in service. These vehicles seated between 17 and 36 passengers and were able to attract patronage by offering a more frequent service which was clean and fast. By the 1920s 4 new engines were acquired to service the Hobart/Launceston/Wynyard main trunk passenger route. In 1928 corridor type passenger cars were introduced and in 1937 corridor cars which included kitchen and dining facilities were introduced.
The establishment in the early 1920s of the Electrolytic Zinc Works, Cadbury chocolate factory and Goliath-Portland cement works brought valuable lon