The Great Depression proved catastrophic for the fortunes of the line beyond Ōkaihau, with construction abandoned in 1931. The Rangiahua section was essentially complete: the line wound downhill to the settlement and a station yard complete with platform was built, though the station building itself was not erected. In 1936, a change in government led to a review of the work beyond Ōkaihau and the decision was made not to extend the line to Kaitaia. The steep route to Rangiahua was not seen as being particularly useful and had been plagued by slips. The line was accordingly terminated in Okaihau, which was on the main State Highway north (SH1). During 1938 and World War II the abandoned trackage was salvaged, sometimes by bullock teams, for use elsewhere, especially the Dargaville Branch.