The company that built the first railway in Tasmania, between Launceston and Deloraine was unable to service its government-backed loans and was taken over by the state in 1873. The late 1870s saw increases in traffic on the line which led to an improved financial position which allowed for additional investment in rolling stock. The extra rolling stock was built at the Launceston Railway Workshops and supplemented the original equipment which had been imported from England. During the 1880s Tasmania emerged from 20 years of recession thanks to mineral discoveries on the West Coast and increased demand for Tasmanian primary produce on the Mainland. This led, in 1882, to a decision by the government to authorise the building of a network of 3'6" gauge lines as it felt that the construction and development of railways could be more effectively undertaken by the State. During the ensuing years a number of new lines and branches were constructed. These changes, and the takeover of another unsuccessful private rail venture, the Mersey and Deloraine Tramway Company, created a much larger body which by 1885 had become known as the Tasmanian Government Railways.