In September 1898, the Choctaw, Oklahoma & Gulf Railroad
leased and later purchased the Little Rock & Memphis Railroad, a company which held the distinction of operating over the first railroad trackage in Arkansas. The LR&M; had been in and out of receivership since the late 1870s, a precarious financial condition brought about by Jay Gould
's diversion of through traffic to his own lines. The CO&G;, owned by Philadelphia investors and coal mine financiers, sought entry into Memphis to expand their market for coal produced by company mines in Indian Territory (eastern Oklahoma). The Choctaw & Memphis Railroad
was created as a CO&G; subsidiary to operate the LR&M;, while also constructing approximately 140 miles of new track from North Little Rock to Howe, I.T. When the new trackage was in place, CO&G; would possess a direct route from Weatherford and Oklahoma City to Little Rock and Memphis. The St. Louis, Iron Mountain & Southern, a Gould road, bitterly opposed the CO&G; entry into Little Rock because it threatened Gould's near monopoly in the area. One of the Gould tactics to discourage CO&G; expansion was a refusal to allow CO&G; operation over either of the existing Arkansas river rail crossings (Baring Cross and Junction bridges) at Little Rock.
In the face of continued opposition from the Gould management, the CO&G; made a decision to build a third railroad bridge across the Arkansas River at Little Rock, along with a belt line surrounding the city on a route which eliminated the need to share stations or other facilities with the Iron Mountain. The Choctaw bridge would cross the river near the existing LR&M; shops in Argenta, entering Little Rock east of downtown. Belt line trackage would circle south of the city before curving back north, crossing the Iron Mountain tracks just west of Union Station, then continuing westward along the Arkansas River toward Perry County.
The City of Little Rock welcomed the impending arrival of the Choctaw, closing McLean street to provide right of way easements in the vicinity of East Second, East Third, and East Fourth streets. This area opened the southern approach to the Choctaw & Memphis bridge, and the contract for bridge construction was let on March 21, 1899. In September 1899, the C&M; purchased the old Little Rock Infirmary property on Second Street, between McLean and Byrd, soon converting that structure into the general offices for the railroad. Additional land was secured for freight and passenger stations, and for railroad yards and servicing facilities needed to complete the terminal.