The Melbourne & Hobson’s Bay Railway Company started Melbourne’s and Australia’s first steam railway service between Sandridge (Port Melbourne) and Flinders Street in 1854, only twenty years after Melbourne was founded.
The railway was built to the Irish gauge of 5 ft 3 in (1600 mm) because the chief engineer from Sydney who set the standards was Irish, when he was replaced by a Scot, NSW switched to 4 ft 8 ½ in (1435 mm), the English and Scottish gauge, but Victoria had already ordered its trains and was unable to change. This was the reason and the beginning of Australia’s railway gauge problem.
The Melbourne and Suburban Railway Company was formed in 1857. It had authorization to build a railway line from Princes Bridge to Windsor with a spur from Richmond to Hawthorn as well.
The line from Princes Bridge to Richmond opened in 1859 and in that same year extended to another station named Pic-Nic in the Cremorne Gardens on the banks of the Yarra River. In 1860 they built a bridge over the Yarra River to have the line extended to South Yarra, Prahran and then eventually reaching, Windsor in 1861. Another bridge was built in 1861 for a spur to reach Hawthorn.
Plagued with financial problems around the time the Windsor and Hawthorn stations were completed, the company sold out to the Melbourne Railway Company in 1862.
The Melbourne Railway Company along with many other private railway companies was taken over by the government owned Victorian Railways in the early 1880s.
The era had begun and Melbourne’s suburban railway network experience significant growth over the next two decades.