In Pennsylvania during the mid 1800s, all railroad charters were granted by the legislative actions, and the legislature was firmly in the grip of representatives from Philadelphia, Pittsburgh and Erie. These lawmakers decided that all land commerce to and from the East must pass through Pittsburgh and Philadelphia and they crushed all attempts to build railroads through Pennsylvania via other routes.
This was a great dilemma for the backers of the Atlantic and Great Western who needed to cross Pennsylvania to build their system. The solution to the problem was discovered in the charter of the Pittsburg and Erie Railroad. The charter called for the Pittsburg and Erie to build a line between its namesake cities, but also granted it the right to build branches from the Ohio state line, near Kinsman, across Pennsylvania to a point on the New York state line. To increase interest in its own company, the P&E was willing to permit the Meadville interests to build such a branch under the P&E’s charter.
A meeting was held on October 8, 1852 at the American Hotel in Cleveland with representatives of various railroad interests in the area. Attending the meeting were Jacob Perkins, president of the Mahoning Railroad Company; Prof. H. N. Day, president of the Clinton Line Railroad; Judge Kinsman, Marvin Kent, Mr. Boyer and Dr. Earle of the Franklin and Warren Railroad; Judge Benjamin Chamberlain of the Erie and New York City Railroad; Dr. William Gibson, David Garver and E. Sankey of the Pittsburg and Erie Railroad; and William Reynolds and D. A. Finney of the Meadville railroad interests. The group agreed that a branch of the Pittsburg and Erie spanning Pennsylvania was a good idea and a committee approached the president of the Erie Railroad on October 26th. President Loder agreed to support the venture as a western connection for his railroad.
On August 19, 1853 ground was broken in Meadville and work was begun, but soon abandoned after only a few miles of grading. The Erie Railroad had offered to assist the building of the line, but its own poor financial situation prevented it.
On April 3, 1857, the Pennsylvania legislature chartered the Meadville Railroad to build a line from Meadville to Erie, and granted it the rights to transfer the branching rights from the Pittsburg and Erie Railroad. In July of 1857 the company purchased the right for $400,000 and let a contract with A. C. Morton to construct the railroad. On August 31, 1857 Morton made a similar contract with the Erie and New York City Railroad and he and Henry Doolittle went to Europe to get money and iron.