Since 1907, the City of New York was looking for a good place to put a reservoir. There was the Ashokan Reservoir in what used to be the Ashokan Valley, which the U&D helped build. The D&N officials got together to discuss an idea of an extension from Andes to Bovina, and another from Grand Gorge to Prattsville, where the line could get the supplies for a reservoir that was planned to be near the line. However, the town of Bovina didn't like the idea, and it was dropped. The railroad now had an income loss of $50,898, and because there was a good chance of a $29,392 debt, prices were increased from 3.6 cents a mile to 5 cents a mile. An offer came to the D&N from the Delaware and Hudson Railroad in 1921 to buy the line, but they refused. With the new receivers being Andrew Moreland and Jim Welch, they made wage cuts, as to keep some money to pay off the debts they owed.