The operating segment of the New Jersey West Line did not have enough income to pay its costs, as it served small farms and an undeveloped region, and the company fell into receivership in 1878. The property was foreclosed on and sold on August 3, 1878 an official of the Delaware, Lackawanna and Western Railroad, its only connection, for $51,580. The new company was called the Passaic and Delaware Railroad. For many years the Gladstone Branch was known to railroad employees as the "P and D", but it was operated by the DL&W from 1878 onward as a branch of the Morris and Essex. The DL&W formally leased the line on November 1, 1882.