When Depression era Illinois Traction was in financial distress and had to reorganize, the Illinois Terminal name was adopted to reflect the line's primary money making role as a freight interchange link to major steam railroads at its terminal ends, Peoria, Danville, and St. Louis.

Freight operation continued but was hobbled by tight street running in some towns requiring very sharp radius turns.

Because the Illinois Traction/Illinois Terminal traversed some towns on street trackage with very tight turns, freight operation required the use of short trains and special hardware.

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.

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.

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.

The Post-Dispatch from the 1960s to the 1980s operated in a profit sharing arrangement with their competitor the St. Louis Globe-Democrat, and eventually took on the printing of the latter's paper at their location.

At the Interstate 70 overpass, the trackage meandered through North St. Louis via a 1.5 mile-long trestle to Branch Street where a small interchange yard with Norfolk Southern Railroad was located.

[5] Following this, RSM's parent company, Ironhorse Resources, applied for, and was subsequently granted, permission from the United States Surface Transportation Board to abandon the entire line on January 12, 2005.