With the Great Depression, the Illinois Traction System staggered.
 The ITS relinquished many of its city streetcar lines in the 1930s, and due to the Public Utility Holding Company Act of 1935 it was forced to cut its ties with an affiliated firm that provided electrical utility services.
 The passenger railroad reorganized in 1937 as the Illinois Terminal Railroad (ITR) and continued to provide electric-powered interurban, long-distance multiple car passenger train service Peoria/Danville to St. Louis for almost another two decades.
United States postal contracts helped provide revenue to make this service viable.

In the 1950s, with the final dominance of the automobile, ITC's passenger service became hopelessly unprofitable.
This was even after IT had purchased three expensive electric multiple car streamlined train sets ("Streamliners") from St. Louis Car Company.
These were capable of decent speeds on ITC's well-maintained open country roadbed, but had to negotiate tight streetcar-style curves in the numerous towns along the line; moreover, they suffered an abnormal number of failures.
Worst of all, this new equipment generally failed to attract passengers, even on the St. Louis-Peoria runs which had no railroad or direct highway competition, despite having parlor-observation and dining facilities.
 On March 3, 1956, ITC's interurban passenger service ended, followed by its last passenger service, the St. Louis-Granite City suburban cars, in 1958.

Because the ITR had some valuable trackage and lineside freight customers, it was acquired in June 1956 by nine Class I railroads.
These collectively continued to operate ITR as a diesel-powered short line to carry freight to the acquiring railroads.
The co-owned reorganized Illinois Terminal Railroad took down its trolley wire and abandoned much of its trackage, particularly the interurban street running in towns and villages.
At various points ITC track was connected to trackage of adjacent lines and was available for optional routing.
For the following 25 years (1956-1981) the ITC continued to operate diesel-powered trackage north and east of St. Louis, providing freight business for the railroads that owned it.
The Norfolk and Western Railway purchased its partners' interests in the Illinois Terminal Railroad on September 1, 1981, and ITC officially merged into the N&W on May 8, 1982.
With the Great Depression, the Illinois Traction System staggered.  The ITS relinquished many of its city streetcar lines in the 1930s, and due to the Public Utility Holding Company Act of 1935 it was forced to cut its ties with an affiliated firm that provided electrical utility services.  The passenger railroad reorganized in 1937 as the Illinois Terminal Railroad (ITR) and continued to provide electric-powered interurban, long-distance multiple car passenger train service Peoria/Danville to St. Louis for almost another two decades. United States postal contracts helped provide revenue to make this service viable.
In the 1950s, with the final dominance of the automobile, ITC's passenger service became hopelessly unprofitable. This was even after IT had purchased three expensive electric multiple car streamlined train sets ("Streamliners") from St. Louis Car Company. These were capable of decent speeds on ITC's well-maintained open country roadbed, but had to negotiate tight streetcar-style curves in the numerous towns along the line; moreover, they suffered an abnormal number of failures. Worst of all, this new equipment generally failed to attract passengers, even on the St. Louis-Peoria runs which had no railroad or direct highway competition, despite having parlor-observation and dining facilities.  On March 3, 1956, ITC's interurban passenger service ended, followed by its last passenger service, the St. Louis-Granite City suburban cars, in 1958.
Because the ITR had some valuable trackage and lineside freight customers, it was acquired in June 1956 by nine Class I railroads. These collectively continued to operate ITR as a diesel-powered short line to carry freight to the acquiring railroads. The co-owned reorganized Illinois Terminal Railroad took down its trolley wire and abandoned much of its trackage, particularly the interurban street running in towns and villages. At various points ITC track was connected to trackage of adjacent lines and was available for optional routing. For the following 25 years (1956-1981) the ITC continued to operate diesel-powered trackage north and east of St. Louis, providing freight business for the railroads that owned it. The Norfolk and Western Railway purchased its partners' interests in the Illinois Terminal Railroad on September 1, 1981, and ITC officially merged into the N&W on May 8, 1982.
Illinois Terminal Railroad