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The Texas charter requirement was a reaction by the citizens of the state, and particularly by Atty Gen Jim Hogg (later governor) to the shenanigans and double dealings being pulled by Jay Gould and his cronies, that were threatening to bankrupt and severely disrupt the railroad companies then operating in Texas (who accounted for most of the transportation and, hence, nearly all of the commerce, in one way or another). The situation had become so bad that Hogg was elected AG in 1886 on a specific platform to require railroads operating in the State to maintain general offices there, to keep their track and equipment in good condition, and to provide adequate service, in line with an Act of the Texas Legislature passed in 1870. Two good references regarding this issue are V. V. Masterson's The Katy Railroad and the Last Frontier, and T. S. Reed's A History of the Texas Railroads (both out of print but still available in libraries and thru hist. societies). At the time, Gould owned the MP, Cotton Belt, Katy, Texas & Pacific, International & Great Northern (MP) and Galveston Houston & Henderson, accounting for a substantial fraction of the trackage in the state at the time. Gould had, in a word, raped these roads, nearly destroying their infrastructure and ability to move traffic, and that was killing the economy. The straw that broke the camel's back was Gould's lease (through the Katy) of the narrow gauge East Line & Red River, which ran from Jefferson (then head of navigation on the Red River) to Greenville where it connected with the Katy. The line had been allowed to fall apart by Gould to the extent that (according to Reed, p. 383) "a tramp was afraid to ride its best passenger coach" (this same sentiment was echoed by other contemporaries, one of whom is said to have compared riding the decrepit and rickety EL&RR to "tempting God"). After several precedent-setting Texas Supreme Court battles, all won by the State, charters were forfeited, and the Legislature in 1891 chartered the Katy of Texas and the other roads whose charters had been revoked by the court. From that point in time, based on the court decisions, railroads operating in the state had to have general offices there, leading to the formation of separate Texas subsidiary companies that lasted almost 100 years. <br /> <br />To my knowledge, MC is correct. The right of charter is a basic state right that still stands today. The Texas law was never overturned by the USSC to my knowledge, and the state was convinced in the 1980's that this practice was running up costs and driving off business, so it was dropped.
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