Prior to the establishment of the NY&H, the SSRLI established a short-lived subsidiary named the Hempstead and Rockaway Railroad designed to connect the Far Rockaway Branch Railroad to the Southern Hempstead Branch.

Without notifying the company, the bondholders illegally appointed receiver Seaman Snediker, a friend of Pusey's, under foreclosure, and they took the railroad on January 8, 1872.

The owners discovered this the next morning and took control of the railroad's only locomotive and two cars had been taken away by bank creditors.

[4] The railroad left the South Side Valley Stream station at Fifth Street and struck out northeastward.

Immediately to the east the track crossed the Schodack Brook on an embankment and culvert about five or six feet above the stream bed.