When Joshua Lionel Cohen designed his first electric train in 1900, he wasn’t trying to make a toy for children. Rather, he thought his wooden, open-bed gondola with the words "Electric Express" on the side would make a good vehicle to show off the wares of Manhattan toy-store merchant Robert Ingersol. Ingersol thought so, too, but when a customer purchased the display right out of his store’s display window, tracks and all, Ingersoll contacted Cohen and ordered six more. Cohen and an associate named Harry Grant scrambled to fill the orders and Lionel was essentially born.

The Electric Express ran on metal tracks spaced 2 7/8-inches apart and was driven by a small electric motor between its wheels. A battery, which could run the gondola for 10-15 hours, powered the motor. The train had one speed, plus reverse.

In 1901, when Cohen’s company published its first catalog, an open-air Electric Trolley Car joined the line. The Morton E. Converse Company manufactured the trolley’s 12-pound body, whose wheelbase was the same as the Electric Express. Grant customized the car by adding a brass controller at the front to mimic the look of a trolley engineer’s tiller—such attention to detail would remain a hallmark of Lionel.

Cohen’s second catalog in 1902 was the first to use the name Lionel. In it, he added an unmotorized Electric Express car with six little barrels that a child could load and unload. Also for sale, for the sum of $1.50, was a Suspension Bridge, Lionel’s first accessory. 1902 was also the year Lionel introduced its first switch, which allowed users to create figure-eight configurations in addition to ovals and circles.

By 1903, the Electric Express was being made of metal rather than wood, and cars were pulled by the company’s first locomotive, a "faithful reproduction," as it is described in the catalogue, of a 40-ton Baltimore & Ohio locomotive. A crane car, complete with hand crank, was also available.

In 1906, Lionel shifted from tracks that were 2 7/8-inches apart to ones that were 2 1/8-inches apart, which was the standard toy-train gauge of the time. It also began making tracks with an electrified third rail, which was powered by electricity tapped from an empty light socket. A transformer converted the 110-volt current to 20 watts and a controller allowed users to regulate the train’s speed.

Between 1906 and 1910, products in the Lionel line included 13 different cars, including the No. 5 and No. 6 steam engines and the highly collectible No. 8 and No. 9 trolleys. So...

The company moved again in 1914, this time to Irvington, New Jersey, and Lionel added a smaller O scale line in 1915. As America entered World War I, Lionel introduced a Military Train which features a car topped by twin cannons—the train was very popular but was only produced in 1917.

The 1920s were glory years for Lionel. In 1921, one of its most venerable locomotives, the No. 42, was given a second motor to dramatically increase its power. Another dual-motor locomotive, the 402, was introduced in 1923, as was the round-hooded 380. That model would be eclipsed by what is today one of the most prized antique Lionel trains from the 1920s, the No. 381, which was sold in an "E" version (automatic reverse and a bell) and a "U" version (as a kit, complete with tools).

In 1928, Lionel and American Flyer partnered to buy out a competitor named Ives. Lionel eventually purchased AF’s share of Ives in 1931, but dumped the line entirely in 1932. In between, Lionel produced a few Ives trains, in particular the highly sought 1764E, which was branded with both the Ives and Lionel names. Lionel even made an Ives line of less-expensive wind-up trains, but Cowen disliked the line and it was quickly discontinued.

The 1930s saw the introduction of Lionel’s Bild-A-Locomotive kits in response to competition from a company called Dorfan. It also saw the launch in 1933 of Lionel Jr., a line of cheaper trains that was a response to the economic circumstances of the day. But Cowen was a purist who continued to put precious resources into expensive locomotives and cars, such as the highly collectible Blue Comet trains introduced in 1930. His rigid standards were causing Lionel to go broke.

Into the breach stepped two new products. The first was the fast-selling Union Pacific M-1000 streamliner, the so-called yellow caterpillar, which got its nickname from its brown top and yellow sides. The other savior was a wind-up Mickey and Minnie Mouse handcar, which sold for a buck. Lionel moved more than a quarter million of the toys, which, along with strong sales of the M-1000, literally pulled the company out of receivership.

Disney went on to add a Santa handcar and a Mickey Mouse Circus Train Outfit to its Lionel offerings. For its part, Lionel added whistles to its new streamline trains, including the orange-and-silver Hiawatha and the ominous-looking, jet-black Commodore Vanderbilt, both introduced in 1935. In 1936, the cast-metal Flying Yankee appeared, as did the gray Torpedo, whose real-life prototype had been designed by Art Deco and Mid-century Modern pioneer Raymond Loewy.

By 1937, Lionel was firmly on its feet again, able to afford such costly introductions as the die-cast 700E Hudson, which required as much as $75,000 to manufacture and boasted a hefty retail price tag of $75. Some of the cars pulled by the 700E were cast out of a magnesium alloy, others were made of a new plastic called Bakelite. Automated, remote-controlled accessories such as coal elevators and log loaders followed in 1938 and sold well until 1941, when the nation was drawn into a second world war.

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