It and its sister railway, the Algoma Central, were originally owned by the Lake Superior Corporation, a conglomerate centered on Sault Ste.

[1] Despite ambitious plans to expand across Lake Huron to the Bruce Peninsula using a railcar ferry, the company failed to develop further and was acquired by the Canadian Pacific Railway in 1930.

The railway's most notable surviving piece of infrastructure is the Little Current Swing Bridge, which crosses the North Channel of Lake Huron to connect Manitoulin Island with the mainland; as of 2021[update], it is used exclusively by road traffic, and is planned to be decommissioned.

[5] The line had a traffic base focused on forestry products from the abundant forests on the north shore of Lake Huron such as pulp and paper and milled lumber, as well as the metal mining and smelting industries of the Sudbury Basin.

A yard, offices, engine repair facility and deep water port was located at Turner, directly opposite Little Current on Goat Island.

The need for sulfuric acid in paper-making drove Clergue's interest in far eastern nickel-mining locations near Sudbury, which were quite distant from his Lake Superior Corporation's Sault Ste.

These far eastern properties, the Gertrude and Elsie mines, soon became important to the Lake Superior Corporation, and drove the demand for a rail link.

[7] When construction began in 1901, the builders, Fauquier Brothers, avoided cutting straight through the "ever-present" rock ridges of the western Sudbury area.

The builders did make cuts through softer clay ridges, but used an absolute minimum of track ballast, inevitably causing the rails under the weight of trains to be submerged in mud during or after wet weather.

[7] Around the same time, a then-unconnected section was constructed of what would ultimately be the Algoma Eastern line, from Stanley Junction (later McKerrow) south to what would become Espanola, through the hills north of the La Cloche Mountains and across the Spanish River.

[7] Sluggishly, and after a number of financial and management setbacks with its parent company, the Lake Superior Corporation, the Manitoulin and North Shore Railway continued to push west from Sudbury throughout the late 1900s and early 1910s, maintaining its plans to build all the way to Sault Ste.

By October, the now-iconic Little Current Swing Bridge was open, allowing trains (and later, road vehicles) to cross the North Channel.

As well, the clay belts and muskeg west of Sudbury would always be challenging terrain, and as active and passive deforestation due to industrial operations at locations like O'Donnell devastated the environment in the area, it would become even more desolate, and less attractive to permanent human habitation.

Before its acquisition by Canadian Pacific, the Algoma Eastern Railway had a small but significant amount of steam-driven rolling stock, which serviced its passenger and freight operations.

The first, in February 1913, was Algoma Eastern #52 (or MLW #51182), which was capable of a higher tractive effort than any engine the company currently had.

[11] At the other end of the spectrum were a pair of brand-new dedicated first-class passenger cars built by CCF in August 1912.

The majority of freight cars were flatcars (creating important logistical capacity for the timber industry), followed by boxcars and gondolas.

After the railway's acquisition by Canadian Pacific, much of the infrastructure would be slowly removed, especially as the towns and industries it served declined.

This junction connected Algoma Eastern and Canadian Pacific tracks and allowed ore from mines like at Creighton to be moved eastward.

Elsie Junction, the location of one of the Algoma Eastern's earliest stations, faded from prominence after the First World War, in no small part due to the closure of the Elsie Mine, and was approximately replaced by Nickelton, the location of the British-American Nickel Company (BANC) smelter, which was near the Murray Mine.

[7] While a number of potential junction points and interchanges with the Canadian Pacific were not used, such as at Crean Hill, others were set up further west.

Further to the west, the Algoma Eastern had a stretch of track consisting of its station at Espanola, the Espanola rail bridge across the Spanish River, a north-south-east wye connecting to the rest of its mainline to the south and east, and to the north a short spur connecting it to the Canadian Pacific mainline at Stanley Junction.