Steam locomotives continued to pull passenger trains on railroads all over the country until the mid-1950s. But the number of steam locomotives rapidly diminished after the end of World War II in 1945, as new diesel locomotives replaced them soon after.
In the 1930s and early 1940s, some steam locomotives were "streamlined" i.e., given new, Art Deco-styled exterior skins over what was still traditional steam technology underneath. Some of these locomotives were quite beautiful, such as those for famous trains like the "20th-Century Limited" from New York to Chicago, the "Hiawatha" between Chicago and the Twin Cities, and the "Daylight" between San Francisco and Los Angeles.
But the real story after 1945 was the quickly disappearing railroad passenger.
In 1926, when Southern Railway locomotive 1401 was built, about 800 million intercity passengers and commuters boarded trains nationwide, and almost 32 billion passenger-miles were generated by the major railroads annually. (A passenger-mile, a standard measure, is one passenger carried one mile.)
Then, during World War II (1941-1945, when there was gasoline and tire rationing), rail travel surged to record amounts, peaking at nearly 98 billion passenger-miles in 1944.
After that, steady decline in rail travel set in as Americans took to the highways and, increasingly after 1960, to the skies.
By 2000, rail passenger-miles, for commuter and intercity, were about 15 billion. But the U.S. population was much greater, and overall mobility had expanded enormously since mid-century.
(Sources: U.S. Department of Transportation; Eno Foundation; Assoc. of Western Railways, Railroad Facts, 1958 ed.)