Demise
The 1935 Labor Day Hurricane washed away 40 miles of the Middle Keys section of the line. In addition, the Long Key Fishing Camp was destroyed, along with an FEC rescue train which — with the exception of steam locomotive 447 — overturned by the storm surge at Islamorada, Florida.
With Flagler gone, FEC was unwilling to repair a line that had never repaid its construction cost — an unknown figure at the time only hinted at by the federal valuation of $12 million ($203,417,476 today). It was later determined that the total cost of what had been derisively nicknamed "Flagler's Folly" exceeded $50 million ($1,293,333,333 today), all from his personal fortune.
The railroad structures, however, were built to withstand the harshest of the Key's tropical climates. The FEC cut the railroad back to Florida City, 30 miles south of Miami, and sold the remaining land to the state of Florida. As the concrete viaducts and steel trestles survived intact, the state built Overseas Highway (U.S. 1) over them in 1938.
Most of U.S. 1 was rebuilt in the 1980s, turning the former viaducts into fishing piers and pedestrian paths part of the Florida Keys Overseas Heritage Trail. The viaducts and bridges were added to the National Register of Historic Places in 1979.
Read more about this topic: Overseas Railroad