American Flyer toy trains first chugged onto the scene around 1907 as windup, tinplate O Gauge trains, a cheaper alternative to the larger-scale electric trains made by Lionel and others. The firm that produced them, founded by William Ogden Coleman in Chicago, was originally called Edmonds-Metzel Manufacturing Company, and Ogden was briefly joined in it by William Hafner, who went on to launch his own Hafner line of windup trains in 1914.

Before the company changed its name to American Flyer Manufacturing Company in 1910, it only produced passenger-train sets, known as “Chicago cars,” as they weren’t numbered but had “Chicago” stamped onto their sides. Then, in 1910, the newly minted Amercian Flyer company launched its first line of freight cars. The company also produced a lower-end Hummer line of passenger and freight cars, though these were never branded with the American Flyer name.

Finally, in 1918, with the market already dominated by Lionel and Ives, American Flyer began producing electric locomotives and cast-iron O Gauge trains, using technology that had been developed 20 years earlier. Between 1920 and 1934, the company released electric toy trains meant to resemble trains running in New England at the time. They were made out of lithographed steel, enameled steel, and cast iron.

To compete with Ives, Lionel, and Dorfan, American Flyer launched a larger, “premium” line of electric toy trains in 1925. These trains could run on Lionel’s “Standard Gauge” tracks, which American Flyer named “Wide Gauge” (both were 2 1/8 inches between the rails). Marketed as “Wonder Trains,” American Flyer’s shiny, brightly colored train sets had patriotic names like “American Legion,” “President’s Special,” and “Mayflower.”

They were also extremely pricey for the 1920s. The cadmium-plated “Mayflower” set, for example, ran about $100, a full month’s salary for an average person. In 1926, the company joined up with Lionel to produce hybrid freight cars for a line featuring Lionel bodies on American Flyer trucks.

Around 1929, American Flyer joined forces with Lionel again to buy out Ives, and for a few years, all three brands were produced by the same conglomeration, featuring a mix-and-match of each company’s parts. Then, in 1931, Lionel bought out American Flyer’s share of Ives, and American Flyer was on its own again.

These efforts were not met with much success. American Flyer was hit hard by the Great Depression that started in 1929—by 1932, it had stopped manufacturing its Wide-Gauge line e...

Fortunately, entrepreneur Alfred Carleton (A.C.) Gilbert, inventor of Erector toys, was looking for a way to break into the toy train market. In 1938, he eagerly bought out the company. A Yale medical school graduate and record-breaking Olympic pole-vaulter, the vigorous and aggressive Gilbert had just what the company needed—high standards and the business smarts to pull the company out of debt. Coleman worked out a potentially lucrative royalty deal with Gilbert, but he died in 1939 before he could reap the benefits. After Coleman’s death, Gilbert closed American Flyer’s Chicago plant and moved all of its manufacturing to New Haven, Connecticut.

Right before World War II, Gilbert revived the company by tapping into the emerging adult-hobbyist market, launching its own 3/16-inch scale (1:64) trains, which were about two-thirds the size of O-Gauge trains but ran on a three-rail O-Gauge track. Focusing on realism, Amercian Flyer put out this line of tiny, high-quality, and highly detailed diecast train sets in 1939, led by the acclaimed Union Pacific 4-8-4 “Challenger” Model 806.

Model train hobbyists were even more taken with 1940’s diecast Pennsylvania K-5 locomotive and the Baltimore & Ohio “Royal Blue” 4-6-2. American Flyer also produced inexpensive sheet-metal versions for consumers who didn’t have such deep pockets—Gilbert gave the O-Gauge line a sprucing up in 1941 with updated features and a new coat of paint. However, the arrival of World War II meant the company had to devote 95 percent of its production and materials to the war effort, making pieces for machine guns and landmines.

In anticipation of America’s involvement in the war, Gilbert opened the Gilbert Hall of Science in New York on September 17, 1941, to keep his company’s name in the public consciousness. It was a brilliant marketing maneuver, showcasing American Flyer products, as well as Erector sets and other Gilbert items like chemistry sets and microscopes. Soon, other cities had their own smaller versions of Gilbert Hall.

After the war, Gilbert was caught off guard by how quickly Lionel introduced its new train featuring a life-like knuckle coupler (the mechanism for connecting train cars). In 1946, Gilbert struck back with its even more realistic S-Gauge track, a two-rail line for its 3/16-scale American Flyer trains. Still, Gilbert could not knock off the patented Lionel coupler, which meant its customers were left with its disappointingly simple link coupler.

Still, the S-Gauge line had a devoted following of fans, who were drawn to the detail and realism of the trains. Lionel trains, however, had more bells and whistles—literally. Lionel’s patented built-in whistle sounded just like a real steam engine’s—American Flyer fans had to content themselves with “whistling billboards” off to the side of the track, or the wheezy, fake sound of the “Nathan air-chime” whistle.

Like Lionel, Gilbert sent vast American Flyer train layouts and sets to department stores for their Christmas displays. In the 1950s, his company even made special displays for television shows like Dave Garroway’s “Today” show, “The Price is Right,” and “American Bandstand.”

When Gilbert died in 1961, his son, Alfred Jr., took over the company, only to sell 52 percent of it to “Lassie” producer Jack Wrather. By 1966, American Flyer was sold to Lionel, which continued to produce popular American Flyer pieces like the Alco PA and the Electro-Motive GP7.

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