From the TSHA: Railroads

The development of Texas, including its major cities, would not have been possible without railroads.

This is because Texas is not connected to any major waterway in the US, notably the Mississippi River and all its tributaries. Commerce could not reach the port of Houston like it reached the port of New Orleans, via a massive river that connected much of the US. 

Railroads were necessary to bring commerce to the Port of Houston.

- Click here for the article.

Transportation was a major problem facing early settlers in Texas. As late as 1850 the settled area of the state was largely confined to the river bottoms of East and South Texas and along the Gulf Coast. Although steamboat navigation was common on the lower stretches of a number of such rivers as the Rio Grande, Brazos, and Trinity, Texas rivers were not deep enough for dependable year-round transportation. Roads were either poor or nonexistent and virtually impassable during wet weather. Ox carts hauling three bales of cotton could only travel a few miles a day and the cost of wagon transport was twenty cents per ton mile. Many proposals to improve internal transportation were both considered and attempted during the period of the Republic of Texas and early statehood. These included river improvements, canals, and plank roads in addition to railroads. However, it was the railroads that made the development of Texas possible, and for many years railroad extension and economic growth paralleled each other.