Road vehicle competition worsened the railway's already weak position and in 1931 the passenger service was discontinued.
However, the importance of Old Meldrum declined with the building of a canal between Aberdeen and Port Elphinstone, on the River Don at Inverurie.
[note 1] Whereas goods had been transported by road via Oldmeldrum and the small port of Newburgh at the mouth of the River Ythan, trade increasingly concentrated on Inverurie and its canal link with Aberdeen.
It was already plain that small towns not connected to the railway network would suffer a decline, and the people of Oldmeldrum saw that a link to the GNoSR was essential.
Ideas put forward at this stage included ambitious plans to extend much further north than Oldmeldrum, but it was realised that the money for a long line was not easily raised.
A more modest scheme, the Inverury and Old Meldrum Junction Railway was promoted; its necessary capital was £22,000, and the GNoSR promised a moderate contribution.
The authorising Act for the Inverury and Old Meldrum Junction Railway received the Royal Assent on 15 June 1855.
[4] There were few engineering complications in constructing the line, the biggest work being a 50-foot girder bridge over the River Ury.
[7] There was an intermediate station at Lethenty, opened on 1 November 1856; a platform halt was established at Fingask, where there were wool-carding mills, in 1866.
Goods traffic outwards was chiefly agricultural produce: oats, potatoes, milk, livestock and milled grain.
The local company was also allowed to issue £10,500 worth of preference shares against the security of the lease charge, to clear the debt.
[13] After 1919, road services became an important competitor for the branch line; at first passenger buses operated, but soon afterwards goods lorries too.