In the very early 1900's, the catchments for Maroonda Dam went in, which removed 90% of the available logging area. The rest of the available area was logged at a smaller scale. 1920's saw the yard expanded for the construction of the Maroonda dam, with 4 road down end establish (not too different to the current 4 road)
The 1939 bushfires (which heavily damaged the line at the yarra glen end, resulting in some concrete bridges) meant that all available timber needed to be removed before it rotted while still standing, which is i belive a crazy thing related to the mountain ash in the area. Healesville and Warburton lines both went nuts as the cutters removed as much timber as possible. It was from this time that the statement of "more timber was handled by Yarra Junction Railway Station that any other station in the world except Seattle in the US" was made, and for years, every yard on both lines was stacked 12 feet high with sawn timber ready for shipment, but this was all finished by the mid 1940's, with the war over, demand dropped, and the remaining timber was hard to reach and of poor quality.
With the end of this big rush, came the end of rail hauled timber in the region. Poweltown tramway on the warby line was removed, the smaller timber tramways began to close (Healesville had two in 1945, Yarra Glen one, all gone by 1955). Timber was still milled in the area (there was a sawmill in the main street of Healesville until the mid 1990's, and theres still a few in the surrounding hills) but most moved by road transport.
The big downshift in operations became clearly evident in the 1960s, with major yard rationalization, both double slips removed, 2 and 3 road up end removed (2 totaly removed and 3 left a small head shunt that stopped at the engine shed for fueling the railmotors from the tank there), engine shed itself removed and consolidated to only one track on shed pits, over head timber crane removed, stock sidings removed and the shift to railmotor service.
thanks John 
