The 3ft. 6in. gauge Jersey Railway, it indeed was. The sad event was in October 1936; by which date the railway was in trouble -- losing money, beset by road competition: winter services had been withdrawn a few years earlier. A large-scale fire broke out at the line's St. Aubin station, where much of the railway's coaching stock was stored: the station roof, and sixteen coaches, were destroyed. The railway company decided to call it a day; the line was abandoned and dismantled. (Its standard-gauge counterpart the Jersey Eastern Railway, St. Helier -- Gorey, had succumbed in similar wise, to general post-World War I conditions; and closed seven years previously.)
The quotation is from the epilogue in Bryan Morgan's
The End of the Line. His wording seems a bit hyperbolic -- a rather unusual proximate cause of a railway's closing, but really not all that bizarre; IMO Morgan wrote beautifully, but wasn't immune to making the occasional slightly cheap crack.
@martinsh: next question is yours to set.