The Red Bank Branch of the Bellefonte Central Railroad, from Mattern Junction to Red Bank, was built through the town around 1887. The branch was built to carry iron ore, the mining of which supported Graysdale and other local towns. It was cut back to end in Graysdale in 1894 due to the shutdown of Bellefonte Furnace, the principal consumer of the local ore. However, the furnace re-opened under new management in the 1890s, and was back to near-full capacity by 1900. Ore mining resumed, the line from Graysdale to Mattern Bank was re-laid in 1900, and a new branch was built from Graysdale to Scotia. However, the furnace was unable to compete with more modern iron and steel mills, and shut down again, permanently, in 1910. The McNitt-Huyett Lumber Company laid a third rail on the line from Mattern Junction to Scotia around this time, to operate its 36 inch (91.44 cm) logging trains, but both the lumber company and the Bellefonte Central removed their tracks through Graysdale in 1915.
- Rudnicki, Jack; Bezilla, Mike (2001). "From Iron Ore to Limestone and Lime...to Nothing". National Railway Bulletin 66 (2): 4–33.
- Kline, Benjamin F. G., Jr. (1999) . Pitch Pine and Prop Timber. Friends of the Railroad Museum of Pennsylvania/Pennsylvania Historical and Museum Commission.
- "Graysdale Homeowners Association". Retrieved January 28, 2007.
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