Wartime traffic in the early 1940s brightened the financial picture, but after that hard times returned. Despite losses in 1946, a group of investors led by J. L. Armstrong bought out the Davis group. The last of the steam engines were pulled from service in 1952 due to the arrival of four diesel locomotives (along with 200 coal hoppers) financed by a
Reconstruction Finance Corporation loan in the amount of $2.2 million. 1954 saw the opening of the first unit of the
Tennessee Valley Authority's
Kingston coal-fired power generating plant, which was largely fed coal from TC's own on-line coal mines operators. The company dropped money-losing
passenger service on July 31, 1955, which by post-war years had narrowed to a single trip from Nashville to Harriman and a reverse trip. Also in that year, the TC ended operations of their steam locomotives. 1956 saw the TC purchase more diesel locomotives and coal hoppers with another RFC loan. Brief profitability was restored from 1949 through 1956. In 1957 the TVA began awarding contracts to non-TC coal mine operators and their traffic boom went bust. Although the program of right-of-way improvement and new equipment acquisition had been carried out, the firm at length was unable to repay the RFC loans and fell into its third and final receivership in 1968. On 14 December 1967, the TC's petition for bankruptcy was approved and service ceased on 31 August 1968. Its assets were sold off. Much of the Nashville beltline south of Nashville had already been sold to the state to build
I-440. The Western Division from the western end of the I-440 right of way in Nashville to
Hopkinsville, KY was purchased by the
Illinois Central Railroad. The eastern end of the line from Harriman to the siding just west of
Crossville went to the
Southern Railway. The remaining middle portion from Crossville to Nashville went to its old and not at all friendly rival, the
Louisville & Nashville. At the end of 1956 TC operated 286 miles of road and 377 miles of track; that year it reported 278 million net revenue ton-miles of freight and 1 million passenger-miles. The Tennessee Central endured for over 80 years in the face of very tough odds, and played a considerable part in the economic development of its service region. It is still remembered fondly by many people in the small towns it served as "The Route of Personal Service," and is commemorated by a namesake institution, the
Tennessee Central Railway Museum, in its former master mechanic's shop, which also was its headquarters in its final years. An unmarked monument exists in today's
Interstate 440 loop south of downtown Nashville, which sits on the old Tennessee Central right-of-way, purchased by the state in the railroad's last years. ==Surviving portions==