Ten years later, the railway began losing business to automobiles and trucks, and in 1933 the of track between Prairie City and Bates were abandoned. Scheduled passenger service on the remaining line ended in 1937. Freight service remained, however, and in 1939 the railway purchased two 2-6-6-2T "mallet" locomotives from the Uintah Railway in Colorado. These engines were converted from coal to oil burners and given tenders from two 2-8-2 locomotives. As traffic declined, the railway sold off the other, unneeded locomotives. In 1947, the railroad ceased all operations except for of track in the Oregon Lumber Company yard in South Baker City. This last section was abandoned and removed in 1961.