The Missouri-Kansas-Texas Railroad Company began its corporate existence in the days following the Civil War and was intended to funnel business from Kansas City and points north and east to a new rail route being cut across Indian Territory and through Texas. The Katy, touted in advertisements as the "Gateway to Texas," breached the Lone Star State's frontier near the site of present-day Denison, where the first regular train arrived on Christmas Day, 1872.
The Katy eventually expanded operations in Texas and reached Waco in the 1880s, establishing a depot in the 300 block of South Eighth Street (as indicated on the Waco History map). M-K-T came to recognize Waco’s importance as a central location upon the 268 miles of track, and in 1910, established a roundhouse in a rural area north of the city. As businesses opened to provide goods and services for workers for the rail company, a city grew up around the roundhouse which today is known as Bellmead.
One of the most infamous publicity stunts of all time, The Crash at Crush, took place about fifteen miles north of Waco, featuring two M-K-T locomotives intentionally set on a head-on collision course on September 15, 1896. Advertised for months in advance, the event drew more than forty thousand spectators to an event which ended tragically in three deaths and dozens of injuries. The Katy settled all claims with cash and lifetime passes. William George Crush—vice president of the railroad and disciple of P. T. Barnum—was "fired" the evening of the crash, but rehired the following day. Rumor even had it he got a bonus for all the attention he brought the railroad, which curiously saw a surge in business afterwards. He worked for the company for fifty-seven years until his retirement.
Despite the catastrophe of The Crash at Crush, the Katy prospered into the first half of the twentieth century. At one point in 1912, the M-K-T owned more than 1,600 miles of operated track in Texas. Passengers luxuriated aboard the Texas Special, the Bluebonnet, and the Katy Flyer. In 1931, even in the middle of the Great Depression, the company owned 82 locomotives and 1,000 cars and reported passenger earnings of $1.7 million and freight earnings of more than $8 million. Wheat rolled in from Missouri and Kansas, and oil flowed out of Texas.
But after the boom years of World War II, the railroad began a long slide into oblivion. New transportation options like air travel and freeway systems took their toll on the once-prosperous line. In 1964, the 99-year-old company that had brought Midwestern wheat south and sent "Texas tea" (oil) north had fallen onto hard times and dropped the passenger trade to concentrate its resources on freight. On January 26, 1924, dozens of people crowded aboard for one last historic jaunt of steel and steam.
Despite cost-cutting measures, mergers, and consolidations, the Katy's fortunes continued to decline. In 1967 it reported a net loss of more than $10 million. Even a $19 million government guaranteed loan in 1976 to repair deteriorating track ties could not stop the railroad’s declining fortunes. In 1988, the Interstate Commerce Commission gave Union Pacific and its subsidiary, the Missouri Pacific Railroad Company, permission to buy the Katy. On December 1, 1989, the two companies merged and the Missouri-Kansas-Texas was no more.