In 1880, the Galveston Houston and San Antonio Railroad built a connecting track that joined its main line, south of town, with a rail yard on the north side of Buffalo Bayou in downtown Houston. This "entrance" into the city greatly enhanced the railroad's potential for rail service while also connecting it with the other large rail line of the city, the Houston and Texas Central.

In March of the same year, Thomas R. Chaney, founder of the Howard Oil Mill Company, began the construction of a factory to be located adjacent to the intersection of these two great railroad lines. Over the next three decades, this rail junction, called Chaney Junction, was to become the focal point of an industrial district for the local economy's first major oil boom, the cottonseed oil boom.

Cotton was produced commercially in Texas from the days of the Austin Colony, and within a decade after the Civil War, Texas had became the leading cotton producing state in the United States. Cotton was "ginned" to separate the fibers from the seeds, and large quantities of baled cotton were shipped through the ports of Houston and Galveston. However, with each pound of cotton ginned, two pounds of cotton seeds were left over. For the most part, the seeds were disposed of as a waste product. Advances in technology during the 1870's, however, made the milling of cotton seeds commercially viable, and by 1882, there were fourteen cottonseed oil mills in Texas, producing a total of five million barrels of oil per year. The processing of cotton seed was one of the earliest large-scale industries in Texas.

To complement the mill operations at Chaney Junction, the Inman Compress Company of Georgia decided to build a compress on the tract of land adjoining the Howard Oil Mill. George W. Harris, president of the Inman Compress in Georgia, arrived in Houston in the summer of 1882 to oversee the construction of the compress. The Inman Compress of Houston was organized on August 9, 1883 and was operational for the fall cotton crop. Cotton compresses used screwjacks, and later haydraulic presses, to reduce the bales of cotton that came from the cotton gins to roughly half their size so that the bulky bales could be packed for shipment by sea.

Shortly after midnight on August 28, 1886, the Howard Oil Mill caught fire and was completely destroyed. The flames lit the night sky and could be seen clearly from the city. Fire hoses had been attached to the hydrants, but when the vales were turned, the hydrants failed to provide water to fight the fire. The whole facility and five box cars of cotton belonging to the H&TC RR were consumed by the fire. The only items saved were two oil tanks of 4500 barrels and 3500 barrels of oil, respectively. The loss was estimated at $250,000. The Howard Oil Mill Company was determined to rebuild the mill. The cottonseed oil business was extremely competitive at this time, and the interim offered an opportunity to one of Howard's chief competitors.

On March 5, 1887, the Southern Oil Company was organized in Philadelphia with Henry C. Butcher as president. A few days later, the officials of the Southern Cotton Oil Company were in Houston to locate a site for one of eight new oil mills for the company. The company planned to build mills for producing cottonseed "crude" across the South, and the Houston facility was one of the first. In early April, Butcher and P. Oliver, his General Manager, negotiated agreements with the H&TC Railroad to secure tracks for the proposed new oil mill. On May 7, 1887, the Southern Cotton Oil Company acquired about 44 acres land for the new mill in the Hollingsworth Survey, on Lots 5, 6 and 7 for $4,783. The mill was located along the east side of the GH&SA Railroad spur, south of Washington Avenue. By October, 1887, the mill had received six new presses to bring its production to full capacity, and it was in operation day and night.

Not to be outdone, the Howard Oil Mill Company was hurriedly rebuilding its mill.  In August, 1887, a stand pipe to deliver 700,000 gallons of water in case of a fire was set on the premises. They were not going to get caught short the next time!

The economic influence of the cotton industry on the local community was fully evident as Houston began the 1890's. In January, 1892, the newspaper reported the National Cotton Oil Company, the new name for the Howard Oil Mill Company, employed 200 to 225 men with a payroll of $2000 to $2500 per week. The Southern Cotton Oil Company employed 250 men with a weekly payroll of $3000. The cotton compresses in Houston, of which the Inman Compress was one of three, collectively employed about 400 persons with a weekly payroll of over $3,000.

The production volumes were equally as significant. The value of goods produced by the local economy was enormous. The output of the National Cotton Oil Company mill in 1892 was 12,000 tons of oil cake and cotton seed meal, 1.25 million gallons of crude oil and 2000 bales of lint. The Southern Cotton Oil Company mill produced 12,600 gallons of oil, 31 tons of oil cake and 25 bales of lint. The mill of the National Cotton Oil Company was significantly larger than its neighboring competitor, and the National mill was the largest cotton oil mill in Texas at the time. Taken together, the mills of Houston consumed more cotton seed and produced more oil, cotton seed meal and cake than anywhere else in the world. At the turn of the century, cottonseed processing was second only to the lumber industry in Texas in value of the product, and Texas was the leading processor of cottonseed in the US.

The success of the cotton industry in the late 19th century and early 20th century was due to the improvements in processing the plant that expanded the commercial uses for the cotton and cotton seeds. Ginning technology to separate the cotton fibers from the cotton seeds was perfected in the early 1800's, but the seeds were discarded because there was no commercial process to make the seed products usable. After the Civil War, however, techniques for milling the cotton seeds were developed so that the seed products could be used. After cotton was ginned to remove the seeds, the mills reduced the seeds to four by products: linters, hulls, meal and cottonseed oil.

Cotton linters were processed for textiles. Cottonseed hulls provided roughage in cattle feed, and the ashes of the hulls were used as fertilizer and to produce lye for soap. Cottonseed meal was used as a high protein supplement for livestock feed. The most valuable product from the milling process, however, was the oil or "crude." The crude oil was used to make commodities such as soap and candles because it was inedible and unsuitable for cooking purposes. A major breakthrough in the process for refining cottonseed oil brought changes to the industry. In 1899, David Wesson developed the process for making cottonseed oil edible, and that year he installed the process at the Southern Cotton Oil Co plant at Savannah, GA. Refined oil quickly found uses in cooking oil, margarine and mayonnaise. As one contemporary writer reported: "Cottonseed was garbage in 1860, fertilizer in 1870, cattle feed in 1880 and 'table food and many things else in 1890'."

In 1909, the Proctor and Gamble Company acquired the rights to the hydrogenation patent for cottonseed oil and produced the first all vegetable shortening in 1911. Originally named "kipso", the product became popular when it was renamed Crisco, an abbreviation of "crystallized cottonseed oil." Crisco was promoted as a vegetable oil with more purity and healthfulness than lard from slaughterhouses and meat packing companies which were perceived in a bad light at that time. Proctor and Gamble also bought large quantities of cottonseed oil to produce Ivory Soap. The Southern Cotton Oil Company so successfully marketed Wesson Oil that the company was renamed the Wesson Oil and Snowdrift Company in 1925. Many of the cottonseed oil products that contributed to Houston's turn of the century prosperity remain familiar household names today, even though the connection with cotton has been largely overlooked.

The success of the cotton business attracted other businesses to the Chaney Junction industrial development. By 1896, Michael Butler's Brick Works was established west side of the Galveston Harrisburg & San Antonio railroad tracks, near Buffalo Bayou. The facility for making bricks included four kilns, several drying sheds and a steam and hot air drying house. By 1907, the Butler Brick Yard had expanded to seven kilns.

The Dickson Car Wheel Company relocated its foundry from the site on Steam Mill Street in the Fifth Ward to a site on the west side of the tracks just north of the Butler Brick Works. In these expanded facilities, the company was producing 400 railroad car wheels per day in 1913.

Directly across the railroad tracks from the Butler Bricks Works, the Bayou City Rice Mills built a four story rice mill that was flanked by a single story rough rice warehouse and a one story clean rice warehouse. Incorporated in January, 1902, the mill was receiving train car loads of rice at the mill by 1903.

The Fidelity Cotton Oil and Fertilizer Company was granted a permit to do business in Texas on July 22, 1905. It acquired the former Southern Cotton Oil Company mill along the GH&SA tracks south of Washington Avenue, and continued the operation of the mill in 1907 with essentially the same plant and facilities that were on the site in 1896.

The Industrial Cotton Oil Company, formerly the National Cotton Oil Company, operated its mill and its refinery which was expanded by 1907 to provide for the improved refining processes that new technologies brought to the cottonseed industry.

The Inman Compress, by 1907, had moved its compress facility to the east side of town near the International and Great Northern Railroad yards at Harrisburg Road and Velasco Street. The former Inman Compress site at Chaney Junction lay vacant. The development of processes to compress cotton at the gin into high density bales by the 1890's eliminated the need for cotton compresses.

In 1918, the GH&SA Railroad completed a new entrance into Houston between Chaney Junction and West Junction. The original 1880 entry between Chaney Junction and Stella was partly abandoned, leaving only a siding that ran south from the junction near Center Street, across Buffalo Bayou to West Dallas Avenue. Although this change did not seriously diminish the prospects for the industrial district, the mixture of business in the area did change. Reflecting the over capacity in the cottonseed oil business and the subsequent consolidation of mills and plants, the American Cotton Oil Company mill, formerly the Industrial Cotton Oil Mill and the National Cotton Oil Mill, was no longer in operation by 1924. The refinery, located just north of the mill, was also deactivated by this time. The Butler Brick Works, located near the bayou, also closed and vacated the site by this time. Otherwise, the industries along the GH&SA siding south of Washington Avenue to Buffalo Bayou prospered in the aftermath of World War I.

The three main businesses operating in the industrial district in 1924 were the Fidelity Cotton Oil & Fertilizer Company, Dickson Car Wheel Company and the Standard Rice Company. A diversification of the business mix reflected a change in the foundations of Houston's economic base from cotton to rail transportation and other agricultural products, such as rice. The consolidation of the cottonseed oil industry continued during the Depression, especially in response to the introduction of solvent extraction that permitted larger capacity and more efficient mill operations. The cotton industry declined further after 1940 with the advent of synthetic fabrics. Eventually, the Fidelity Cotton Oil mill closed and the site was redeveloped by Henke and Pillot, Inc. in 1946.

In Houston's post-World War II economy, the industrial zone at Chaney Junction, especially along the railroad spur from Washington Avenue to Buffalo Bayou, showed a variety of business that comprised Houston's modern economy.  The cotton mills and refineries were gone. The Dickson Car Wheel Company was acquired by the Pullman Car Company and the foundry was taken over by another railway equipment manufacturer, the American Brake Shoe and Foundry Company. The rice mills continued to be operated by the American Rice Growers Cooperative Association. The wholesale grocery operations of Henke and Pillot highlighted the new concept of suburban supermarkets. And, the Ed Sacks and Company plant for waste paper was opened on the tract of land previously used by the Butler Brick Works.

Eventually, though, these industries gave way to the changing development patterns of Houston. Henke and Pillot was sold to the Kroger Corporation of Cincinnati in 1956 and the warehouses were moved to other locations. The American Rice storage silos, which had been vacant for several years, were destroyed by a five alarm fire on January 14, 1988.  The rice silos were one of the last reminders of Houston's agricultural heritage within the inner Loop area. The silos were imploded in 1996, and since 2004, the property has been transformed into the 100 acre Memorial Heights residential development.

In 2004, Ameriton Properties, a subsidiary of developer Archstone-Smith, purchased the 2.75 acre Sacks Paper Company site on the north side of Buffalo Bayou along Memorial Drive at Studemont. Construction of a high rise residential tower on the site began early 2008. With the completion of that structure, the transformation of Houston's early industrial zone into a residential development will be complete. Even the railroad spur that laid the foundation for the area will disappear from view. The only remnants of the historic past will be the concrete footings for the railroad trestle that lie in the sandy bottom of Buffalo Bayou and the notched  bulkhead that supported the rail right of way along Memorial Drive.