This line ran close to the banks of the East Branch of the Delaware River, and had plans of expansion, but never made it far, only getting to Arkville.

There were rises in drops in the progress of extending the railroad, and a telegraph was sent in 1907 saying that they weren't continuing the extension.

There wasn't enough money being made from the passenger service in the small Delaware County towns, and the railroad was headed straight for bankruptcy.

For a time Grand Gorge was the site of great activity when the construction of the Schenectady and Margaretville Railroad was attempted.

Special sidings were built for contractors and a large volume of equipment and supplies were delivered to commence construction.

Hundreds of Italian laborers recruited from New York City were set to work grading the new line.

Evidence of the grading can still be seen today along the valley from Grand Gorge Railroad Station down to Prattsville.

With the new receivers being Andrew Moreland and Jim Welch, they made wage cuts, as to keep some money to pay off the debts they owed.

A big relief came in 1926, when the railroad purchased a maroon Brill motor car which they named the "Red Heifer".

But this didn't mean a lot to some people, considering there were rumors that he intended a $9,000,000 squeeze, and that he brought the line just to transport materials for the construction of the Pepacton Reservoir.

After all the commotion, when the D&N workers were finally about to extend the line, the Interstate Commerce Commission wasn't allowing any extensions.

The railroad was abandoned in 1942, with all the 40,000 tons of rolling stock and locomotives sold for scrap at a price of $50,000 apiece.