In 1855, work began in earnest on the Allentown Railroad itself. The route chosen left Allentown in a southwesterly direction, passing through Dorneyville, Wescosville, Trexlertown, and Breinigsville. Ducking through Topton, it ran directly through Kutztown and followed Sacony Creek through the hills to Virginville. From thence it followed small streams west and north to Windsor Castle, site of the line's one tunnel. It was to be long, with rubble masonry portals. Leaving the tunnel, it would skirt the edges of Hamburg and push through the gorge of the Schuylkill to reach Port Clinton. By July 1856, the CNJ was prepared to abandon the project in favor of a rival route, via Reading. However, the other investors pressed on. The Auburn & Port Clinton was merged into the Allentown Railroad on January 1, 1857. The Panic of 1857, however, brought work to a halt. The D&S was foreclosed and reorganized on April 1, 1859, as the Schuylkill and Susquehanna Railroad, under control of the Reading. On May 11, 1859, the East Pennsylvania Railroad opened, connecting Allentown and Reading. From Reading, traffic could either pass north to Auburn and thence over the Schuylkill and Susquehanna, or west over the Lebanon Valley Railroad to Harrisburg. The distance cut off by the direct route from Port Clinton to Allentown was minimal, so when the Reading gained control of the Allentown RR on July 12, 1860, it saw no reason to complete it.