Newer technology in trucks, buses, and road construction provided increased competition for railroads in the 1920s and 1930s. The beginning of passenger airline service also affected railroads. In addition, the Great Depression reduced demand more generally. The effect of both was reflected in rail labor markets in which wage cuts were negotiated. The impact of competition and demand swings is comparable to the impact of deregulation in transportation in the 1980s. In the 1930s, however, rail fares and prices were still set in a regulated framework. The authorities cut prices as noted in the video due to the changing transportation market.

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