Heavy flooding in August 1912 washed away several staithes, and resulted in a breach of the canal bank above Bacton Wood Lock. The canal was bought by the mill owners Edward Cubitt and George Walker in 1921, who expected that a new drainage board was to be created, which would take over the running of the canal. This did not occur, however, and so the two millers set up the North Walsham Canal Co Ltd, which bought the canal in January 1922 for the £1,500 they had paid. Cubitt and Walker dredged the canal from Wayford Bridge up to Bacton Wood in 1927, but at the same time dewatered the upper section above Swafield Lock. Decline continued and the wherry "Ella" made the final trading journey on the canal from Bacton Staithe in 1934. Because the canal was moribund, it was not nationalized in 1948 when most other British canals were, and continued to belong to the North Walsham Canal Company. The company sold around of the dry canal bed above Swafield Locks in 1948, and it reverted to farmland. In order to protect the water supply to Ebridge mill, which was still water powered, the Ebridge to Bacton Wood section was dredged in 1957. Three years later, a culvert near Royston bridge became blocked. Rather than repair it, the culvert was demolished, and the water from the canal was diverted, to rejoin the waterway below Bacton Wood lock.