The Lincoln Tunnel had been completed in 1937, and Kidde offered the idea that it might be faster for commuters to head to Midtown by connecting with bus companies that used State Highway Route S-3.

[2] However, the idea immediately met opposition by bus companies and the Hudson and Manhattan Railroad when the Susquehanna proposed this new service in 1938.

During this time period, Kidde had proposed bustituting (replacing rail with bus) between North Hawthorne and Butler, but this was torpedoed by neighborhoods opposing the change, such as Pompton Lakes as well as a jump in ridership.

The first part was construction of Susquehanna Transfer, a station in North Bergen, where it would meet with Route S-3, 2 miles (3.2 km) west of the tunnel.

[2] The new station could include a platform for commuters to transfer directly from railroad cars to buses for the trip to Times Square at 42nd Street and Seventh Avenue.

With ridership quickly increasing, the Erie Railroad added service to the transfer station on their Northern Branch on September 25.

[9] The Susquehanna received permission to spend $14,000 (1940 USD) to reconstruct the roadbed and an extra $9,000 to build a brand new station to replace the old brick depot.

The use of steam locomotives still required turning engines at various Susquehanna facilities, including Butler, Pavonia Terminal, etc.

[10] On October 7, 1939, Kidde announced that new railcars had been ordered from the American Car and Foundry Company with expectation that service would be running by May 1940.