During 1857, the canal was threatened by the prospect of a competitor. The Tyrone and Lock Haven Railroad was chartered to run down the Bald Eagle Valley between Tyrone and Lock Haven, and to build a branch to Bellefonte, paralleling the canal route. However, the Tyrone & Lock Haven was unable to secure sufficient financing for its immediate construction, completing only the branch from Bellefonte to Milesburg and a short section of line from Milesburg to the Bellefonte and Snow Shoe Railroad at Wingate by 1859. It was operated by the latter road for the next several years. Initially, the railroad was something of a boon to the canal: docks were built on the canal at Milesburg so that coal carried down by the railroad from the Snow Shoe area could be loaded into eastbound canal boats. However, this state of affairs was not to last. The Pennsylvania Railroad took up the financing of the Tyrone & Lock Haven, reorganized it as the Bald Eagle Valley Railroad, and pushed it to completion along the length of the Bald Eagle Valley in 1865.