In 1906, Lionel introduced a new line of model trains that ran on track with a width (between rails) of 2.125 inches. In order to power the electric locomotives, the track included a third rail in the middle, which conveyed electricity.

After coming up with a slogan that proclaimed “Lionel—Standard of the World,” Lionel named the design “Standard Gauge” and filed a trademark. Lionel derived the name from an incorrect interpretation of a gauge defined by the German toy company Märklin. Whereas Lionel measured width between rails, Märklin measured the width from the center of one rail to the center of the other.

In fact, this “standard” gauge was decidedly non-standard—European manufacturers had settled on two inches, as had Carlisle & Finch, the company that invented the toy train. The No. 1 gauge was much smaller, at 1.75 inches. But “standard” stuck and, more importantly, implied the sizes of other brands were, in fact, the strange ones.

Regardless, Lionel’s standard gauge trains became exceedingly popular, especially in the 1920s, when the company’s care and attention to detail helped it dominate the market. Models like the super-realistic State-series passenger cars and the huge Shasta locomotive (the highly prized No. 381 E) thrilled kids—not to mention collectors today.

But Lionel’s trademark didn’t prevent other companies from producing their own 2.125-inch trains, which they generally called “wide gauge” instead. American Flyer, Ives, and Dorfan all entered the market, often with success.

Founded in 1924 by German immigrants Milton and Julius Forchheimer, Dorfan specialized in wide- and O-gauge trains. Whereas Lionel promoted itself as the standard, Dorfan pitched a slightly different angle—its trains, the company proclaimed, were easy to disassemble and reassemble. Accordingly, the company encouraged its young users to do just that as a way of learning about the trains’ design and inner-workings. Like Lionel, Dorfan also pushed for increasingly high levels of detail, including illustrations of passengers in their train windows. Like many other businesses of that era, Dorfan could not survive the Great Depression.

Dorfan locomotives are highly valuable today because of the copper-zinc alloy the company used to manufacture them. This metal—now known as “Dorfan alloy”—was prone to impurities...

Another producer of standard-gauge trains was Ives, which began as a toy company in 1868. Buoyed by its famous slogan, “Ives Toys make Happy Boys,” Ives was making toy trains early on. In 1921, it introduced its own line of wide-gauge trains to compete with Lionel, perhaps motivated by a fierce personal rivalry between Harry Ives and J. L. Cowen of Lionel.

Although Lionel bought out Ives in 1931, Ives made an important contribution to the history of toy collecting in the 1920s when it arranged exhibitions of its trains in New York galleries and showrooms. Many historians believe these shows sparked an interest in old toys as collectible objects.

American Flyer was another player in the wide-gauge market, producing its first wide-gauge trains in 1925. Unfortunately, within just a few years the size began to fall out of fashion. As it had done with Ives, Lionel eventually bought out American Flyer—that consolidation occurred in 1967.

Once a mighty fad in the 1920s, wide- or standard-gauge trains were killed by the hard times of the Depression. Instead, companies shifted to O gauge trains, which were smaller, and therefore cheaper, to manufacture. Even Lionel, the inventor of the standard gauge, discontinued its own line in 1940, although it reproduced its standard-gauge trains in 1990s for collectors eager to own a piece of the past.

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