The unprofitable branch lines that made up much of the THI&E did not fit into Insull's master plan, and they were abandoned. The busy west-east Terre Haute through Indianapolis to Richmond line survived, but the Danville, Martinsville, Lafayette and Crawfordsville branches were abandoned on October 31, 1930. The Sullivan and Clinton lines were abandoned early the next year. In June 1931, Midland Utilities absorbed the THI&E into its Indiana Railroad. Track and facilities were improved, and THI&E's large wood passenger combines (passenger+freight in one car) replaced with new lightweight fast passenger cars. Some of the old wood cars became freight box motors. The last of this former THI&E line was abandoned in 1940, and the Indiana Railroad itself abandoned all operations in 1941. The IR's connection to the THI&E's former 1920s partner, the Dayton and Western, at Richmond, Indiana, was essential for IR's freight business from Indianapolis to Dayton, Ohio and from Dayton to the rest of Ohio, particularly to industrial Toledo and Cleveland. When the Dayton and Western went bankrupt in 1937, it was a blow to the Indiana Railroad and to its important Ohio freight partner at Dayton, the Cincinnati and Lake Erie Railroad. Both the IR and the C&LE ceased operations within a few years.