At this time it had become clear that rural towns that were not connected to a railway would suffer economically, as necessities brought in, and manufactures and agricultural products sent out, were expensive to transport by other means. Accordingly the idea developed of a railway branch line from the Craven Arms station to a point on the O&NR near Montgomery, serving the town and intermediate areas. From a junction at Wistanstow near Craven Arms, this would run through Lydham and join the O&NR north of Montgomery station, near the bridge over the River Camlad. The town of Montgomery is on a hill, and the route of the proposed railway could not be made close to the town; a short branch line to it would be built. There would also be a branch from Lydham to Bishop's Castle.