[10] The NJH&D was unable to raise enough funds to begin laying down their trackage, due to money panics and competition from the nearby Morris and Essex Canal.

[11] The most successful attempt was by the New Jersey Western Railroad (NJW), which was founded by Cornelius Wortendyke in 1868, and they began laying down their trackage at Hawthorne, the following year.

[10] By 1870, the NJW expanded westward from Hackensack to Hanford, but in doing so, they encountered the NJH&D, the HR&P, and the Sussex Valley, all of which already obtained resources and created their route grades.

[11][17] In 1896, the NYS&W chartered the Susquehanna Connecting Railroad to directly access the Wyoming Valley south of Scranton, and to divert coal traffic away from the DL&W.

[27][25] The first task he did was to terminate the company's lease of the Wilkes-Barre and Eastern, effectively ending their anthracite coal operations, and the WB&E was quickly shut down and ripped up, after they filed for their own bankruptcy.

[25][31] Following the abandonment of the WB&E, the NYS&W did not prospect any benefits in continuing their Pennsylvania operations, so by 1941, they cut back the western end of their line to Hainesburg, New Jersey.

[38] Following the Recession of 1957, the NYS&W experienced additional financial problems, and a portion of their other freight customers abandoned the railroad to begin relying on truck shipping.

One of the other cutbacks was the abandonment of the Hanford Branch, the remains of the original NJM-NY&OM route, since it had lost its farm traffic to the recession, and long-time interchange partner NYO&W had shut down.

[71][72][73] In 1971, the NYS&W lost their interchange with the Central Railroad of New Jersey (CNJ) at Green Pond Junction, when a stretch of trackage at Smoke Rise was washed away and mud-covered by Tropical Storm Doria.

[81] The Securities and Exchange Commission began to investigate the NYS&W's operations, and they quickly discovered that the railroad's purchase of their $2 million bond on Maidman's behalf was stock fraud.

[18] Maidman, who often quarreled with Scott, had hopes of regaining control of the railroad before selling it on his own after it emerged from bankruptcy, having said to The Record "I expect to straighten things out.

[29][20][88] By 1979, DO's short line renovations caught the attention of New Jersey state and county officials, who were exploring ways of having the NYS&W continue operations under new ownership.

[86] That same year, DO established their own real-estate unit to begin arranging for the NYS&W to lease and sell line-side land property that was deemed unessential for railroad purposes.

[93] The Edgewater yard was subsequently ripped up and redeveloped as a shopping mall and condominium complex, and the tunnel began to house a pipeline for the Amerada Hess Corporation.

[98][97] To cover the Northern Division operations, one GP18 was transferred over, and DO purchased some ALCO locomotives second-hand: one RS-3 from the recently-closed Adirondack Railway; two C420s from a holding firm owned by Tony Hannold; and five C430s from Conrail.

[100] By that time, Walter Rich reported to his fellow stockholders that reorganizing the NYS&W helped DO expand from a short line operation to a regional railroad network.

[102] DO and Sussex County jointly purchased a portion of the route between Franklin and Lime Crest, to serve its remaining customers and to preserve the NYS&W-L&HR interchange at Sparta Junction.

[101][102] In 1984, the NYS&W was approached by SeaLand, an international shipping corporation, to form an intermodal container-shipping partnership, and to lease part of the railway's Little Ferry Yard for use as a container facility.

In 1985, SeaLand signed a contract with the NYS&W where they would lease 22 acres (110,000 square yards) of their Little Ferry property for twenty years, and they quickly began construction on their new facility.

[109] In June that same year, the Delaware and Hudson was filed for bankruptcy by their parent company, Guilford Transportation Industries, and they disbanded the D&H, following two labor strikes.

[115] The NYS&W utilized $7 million state grants and loans and initiated a rehabilitation of the route to boost its speed restriction, and they installed a new intermodal interchange with Conrail at Syracuse.

[115] The shuttle commuter provision lead to the creation of OnTrack, which the NYS&W operated in exchange for property tax relief on the route, and three former New Haven Rail Diesel Cars were acquired and restored.

[116] Since NS and CSX would both receive direct routes into the New York City area, the NYS&W would lose all of their intermodal operations, which by that time, provided 70% of the railway's annual income.

One option was to carry out their proposed "Northeast Network" alliance with the Canadian National Railway (CN), where the NYS&W would have provided a New York City connection for CN, and the two railways would have jointly purchased Conrail's Montreal Line, while the NYS&W would have either purchased Conrail's Southern Tier Line or extended their trackage rights to a Conrail-CN interchange at Buffalo.

[117] On August 17, a new privately-held holding company, DO Acquisition LLC, completed their $55 million purchase of Delaware Otsego via a stock tender offer of $22 per share.

[113][121] The NYS&W reoriented their freight operations to solely serve their industrial customers, but Rich explored other opportunities for the railway to gain additional profits.

[115][111][122] Concurrently, NJ Transit negotiated with the NYS&W to provide commuter service in the Southern Division between Hawthorne and Sparta, to alleviate roadway congestion on Route 23.

Congressman Bill Pascrell joined state legislators in creating a coalition to revive NJ Transit's proposed Hawthorne-Sparta commuter service over the NYS&W.

[133] Under Delaware Otsego management, the Susquehanna began to operate diesel-powered public excursion trains, with the first one taking place in October 1981, for the Jersey Central Chapter of the National Railway Historical Society (NRHS).

[135] Passenger ridership on the trains barely broke-even, so in 1985, the excursion services were reduced, and most of the dome cars were sold to fund the rehabilitation of the NYS&W's Butler-Sparta route.