For a time Grand Gorge was the site of great activity when the construction of the Schenectady and Margaretville Railroad was attempted. Special sidings were built for contractors and a large volume of equipment and supplies were delivered to commence construction. Hundreds of Italian laborers recruited from New York City were set to work grading the new line. Unfortunately, the money soon ran out, the workers were not paid and the whole project collapsed. Many of the laborers walked back to New York City following the tracks on which they had arrived. Evidence of the grading can still be seen today along the valley from Grand Gorge Railroad Station down to Prattsville.