Middletown and New Jersey Railroad - Decline in Traffic and Revival

Decline in Traffic and Revival

A substantial passenger service, often using railbuses, was offered with emphasis on carrying high school students from hamlets along the line to Middletown High School. Construction of a new high school far from the tracks resulted in cancellation of the school district's contract and the Middletown and Unionville abolished passenger service with the end of the school year in June 1940.

A multi-year, see-saw battle with truck competition ended with the final shipment of milk on August 18, 1941 from Borden at Johnson. Between 1938 and 1942, the NYS&W, newly independent from Erie control, and the O&W developed a very close relationship, reminiscent of the "Midland Route" of an earlier era, and for a short period routed heavy coal traffic from the O&W to the NYS&W via the M&U, once again serving as the link between the two.

In the late 1950s the M&NJ lost two of its three connections as the O&W ceased operations on March 29, 1957 and the NYS&W abandoned its Hanford Branch the next year. On February 20, 1960, the railroad was sold to three partners, Jay Wulfson, Jim Wright and Pierre Rasmussen. The GLF mill at Dolson Ave. burned down on March 30, 1962 but was rebuilt as a much larger facility including a custom mix plant and a bulk plant with an annual capacity of 50,000 tons. GLF soon merged into Agway. The complex received as many as a dozen loads daily. In the early 1960s, the Empire State Railway Museum ran diesel and steam excursions over the line until relocating to Essex, Connecticut, in the mid-1960s. The ESRM has returned to New York but is now located on the Catskill Mountain Railroad in Phonecia, New York.

Service on the south end of the line was cut back about 7 miles (11 km) to Johnson with the last run to Unionville on December 31, 1968. Within two years service was cut back two more miles to Slate Hill. Agway opened a fertilizer plant near Dolson Ave. in 1966; Balchem opened a chemical plant in an old creamery in Slate Hill in 1968 and Polytherm Plastics (now Genpak) constructed a plant in Middletown in 1969 to produce plastic plates and dishes.

These three customers were the only customers in the late 1980s and through the 1990s as the Agway feed mill at Dolson Ave. closed in the mid-1980s. Agway Fertilizer closed in June 2000 and Balchem ended rail service soon after. Pete Rasmussen became majority owner and President/General Manager of the railroad when Wulfson left to start up the Vermont Railway in the mid-1960s and sold his stock to Rasmussen.

Upon President and General Manager Pierre "Pete" Rasmussen's death in 2004, his wife, Lucy, as administratrix of his estate, ran the railroad. In December 2005, Chartwell International of Morristown, New Jersey signed an agreement with the Rasmussen estate to purchase majority control of the Cranberry Creek Railroad, holding company for the Middletown & New Jersey. In February 2006, Chartwell Corp. finished the acquisition of the railroad begun in December 2005, acquiring 100% ownership. The failing Chartwell sold the line to Regional Rail, LLC, headquartered in Kennett Square, Pa and began operations in April 2009.

When Regional Rail purchased the rail line it was in deep decline, but with NYS DOT grants and aggressive marketing, the line has made big advances. The old Agway Fertilizer site was converted to an inter-modal and trans-load site and now boasts of 4 regular customers. Commodities include beer, paper, lumber, fertilizer, wheat, barley, salt brine, potatoes and onions and of course it's original mainstay plastics and chemicals and the occasional carnival train. The railroad recently leased NS lines that provided much needed additional operating revenue that saved 3 lines from abandonment. The railroad had the only through line connection operating after the mainline devastation after Hurricane Irene in 2011. Some MTA and NS trains were diverted over MNJ trackage and all local and through freight traffic was handled by them and the NYSW via the Campbell Hall cluster and yard.