Early railroad regulation was based on the notion that railroads formed a market structure requiring close public control to function in the public interest. By the early 1930s motor carriers were providing substantial competition to railroads, and pressure for federal regulation of motor carriage mounted. Motor carriers suffered from cutthroat competition as did many atomistic industries in the depression of the 1930s. The intensive competition during this depressed era resulted in belowcost rates, diversion of traffic away from railroads, and general industry instability. The resulting political support by railroads and established motor carriers for regulation led to the Motor Carrier Act of 1935, the initial federal statute regulating motor trucking. The federal regulatory philosophy applied to motor carriage paralleled that for railroads. The Motor Carrier Act of 1935 included provisions which controlled motor carrier rates, entry and exit, and routes. However, regulatory exemptions were incorporated into the legislation, most notably the exemptions on unmanufactured agricultural products. Thus the regulatory effect of the Motor Carrier Act on rural and agricultural shipper/receivers (S/R) was uneven. For-hire interstate motor carriage of unmanufactured agricultural products was exempt from economic regulation, whereas general freight carriers providing interstate transportation services to rural communities were controlled in a manner similar to railroads including the common carrier requirement that, as public utilities, they must extend their services to all of the general public.