In 1860, the Pennsylvania Coal Company began the construction of a 16-mile-long railroad from Hawley, Pennsylvania, to a connection with the Erie Railroad at Lackawaxen. This new line was quickly leased to the Erie Railroad, and it was operated as their Hawley Branch. In 1868 the charter of the Jefferson Railroad was reactivated and construction progressed from Hawley towards Honesdale, hoping to reach Carbondale. This extension would never be built, even after the Erie took over in 1870. It would continue operation as the Honesdale Branch, and coal was the primary traffic.