The Dryades Streetcar line opened in 1866 to serve the areas above St. Charles Avenue. Known as the "Banlieu" (outskirts), this area was an economic center even before the Civil War. The Dryades Street Market opened in 1849 at the corner of Melpomene and Dryades and drew many to the neighborhood. The New Basin Canal had its head on nearby Rampart street; many businesses, especially lumber and construction-related ones, located near the terminus for ready access to lumber barged in from Lake Pontchartrain. After the Civil War, Hugh Kennedy served as the city's appointed mayor. During his brief tenure, his office granted franchise agreements to various street railway companies.
The original route of the Dryades line began on Canal Street and went up St. Charles to Delord (Howard) before joining Dryades; its return path followed Rampart and then rejoined Delord. With only one set of tracks leading uptown from Canal, the St. Charles Street Railroad company economized by using its St. Charles rails until Lee Circle, when other lines fanned out for different neighborhoods.
The railway fueled the development of the Dryades Street residential areas and shopping district, which became second in size only to the Canal Street commercial district. Dryades shopkeepers also allowed African-American consumers some freedom from the worst aspects of Jim Crow racial discrimination practiced in shops along Canal Street.