Originally chartered as the South Western Traction Company, the line was renamed the London and Lake Erie Railway in 1909.
Unlike the municipally-owned London and Port Stanley Railway, the South Western Traction Company was chartered primarily as a passenger hauling line.
Continuing southward, the line passed through the village of Union and entered Port Stanley via Colborne Street.
A long trestle carried the line over the Thames River valley before terminating at the company's station on Horton Street.
The line was dealt a major blow on August 10, 1907, when a fire caused by crossed wires destroyed the company's car barns in London.
In 2012, the South Western Traction Line was inducted to the North America Railway Hall of Fame.
The line was inducted in the "Community, Business, Government or Organization" class in the "Local" category (pertaining specifically to the area in and around St. Thomas, Ontario.)
A consortium of businessmen led by G.B Woods of Toronto purchased the line from Mr. MacDougall and formed the London and Lake Erie Railway and Navigation Company.
In 1911, the company was dealt another blow when Sunday service was suspended by the Province under the Lord's Day Act.
Fish from the dock in Port Stanley was the main commodity hauled, but never panned out into the big revenue generator the company hoped for.
The tight curves and steep grades of the London and Lake Erie Railway, while satisfactory for interurban cars, was not conducive to effective freight operations.
That, combined with the ever-growing threat of the automobile, eventually spelled the end for the London and Lake Erie Railway.
The beach area in Port Stanley was very developed as well, but the London and Lake Erie, being on the opposite side of the harbour, lost out on the majority of the tourist traffic.
Wartime demands had reduced the amount of coal available, and service had to be drastically cut back due to no heat being available for the cars.
Both London and St. Thomas expressed interest in purchasing portions of the line, but neither were willing to pay the full $600,000 asking price.
Sir Adam Beck, Ontario Hydro visionary and former mayor of London, suggested that the City counter with just over $300,000, but this was declined by management.
On October 28, 1918, a statement was issued by manager Warburton that the London and Lake Erie Railway had ceased operations.