Great Depression: Boy hopping fright train, Dubuque, Iowa. Photo by John Vachon
Under the Emergency Railroad Transportation Act of 1933 the ICC was relieved from formulating a national consolidation plan, and private voluntary consolidations were encouraged. This act also modified the rule of rate making imposed by the Transportation Act of 1920.
The fair return on fair value standard of that act was eliminated. Instead, the ICC was directed to consider, when passing on rates, not only what would be a fair return, but also the public need for service, the need of carriers for revenues, and the effect of rates on the movement of traffic. In addition, the so-called recapture clause of the earlier act was repealed.
Federal regulations covered motor carriers, with passage of the Motor Carrier Act of 1935, and water carriers, with enactment of the Transportation Act of 1940; however, exemptions applicable to both motor and water carriers left large and important areas of their business outside of economic regulation. In 1940 Congress enacted a Declaration of National Transportation Policy in the form of a statement preceding the Interstate Commerce Act. It directed that the act be administered so as to preserve the inherent advantages of each mode of transportation.