The sharp increase in both passenger and freight demand during World War II led many of the major railroad operators to invest in new rail infrastructure ready to continue high capacity operations following the war. Contrary to prior predictions, there was a steep decline in overall rail use following World War II as the highway network was expanded and air travel became more cost effective. Steam locomotives, which had been used for almost all rail operations throughout the war, were quickly phased out in favour of diesel-electric locomotives, which were much more efficient and cheaper to maintain. By the mid-1960s the total number of passenger journeys had fallen by more than half since the end of World War II and many railroad companies began to declare bankruptcy. The decline in demand in the northeast, which had historically been the area with the densest railroad coverage in the country, was especially damaging to the profit margins of operators in the region.
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