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The first toy trains were made of lead and had no moving parts. Some had wheels that flipped, but these needed to be pushed or pulled. A few of the early 19th-century push toy rails were made of tinplate, like the big, durable, stylized locomotive toys in the U.S., that were painted gold and red and decorated with hearts and flowers. model trains buildings

Around 1875, technological advancements in materials and manufacturing allowed tin to be stamped, cut, rolled, and lithographed faster than previously.
Toy trains were altered when Märklin, a German company that specialized in doll house accessories, sought to create an equivalent toy for boys where a continuous revenue stream could be guaranteed by purchasing add-on accessories for years after the initial purchase. Along with boxed sets comprising a train and track, Märklin offered additional track, rolling stock, and buildings offered separately, creating the predecessor to the modern model train layout featuring buildings and scenery along with an operating train.

Electric trains followed, with the first appearing in 1897, produced by the U.S. firm Carlisle & Finch. As residential use of electricity became more common in the early 20th century, electric trains gained popularity and as time moved on, these electric trains grew in sophistication, gaining lighting, the ability to change management, to emit a whistling noise, to smoke, to remotely couple and uncouple cars and even load and unload freight. Toy trains from the first half of the 20th century were frequently made of lithographed tin; later trains were frequently made mainly of plastic.
Pull toys and wind-up trains were marketed by children, while electric trains were marketed towards teens, especially teenaged boys. It was during the 1950s that the modern emphasis on realism in model railroading started to catch on.
Consumer interest in trains as toys waned in the late 1950s, but has undergone resurgence since the late 1990s due in large part to the popularity of Thomas the Tank Engine.

Today, S gauge and O gauge railroads continue to be considered toy trains even by their own adherents and are often accessorized with semi-scale model buildings by Plasticville or even K-Line (who owns the rights to the Plasticville-like buildings created by Marx in the 1950s to the 1970s). However, as a result of their high cost, one is more inclined to locate an HO scale or N scale train set at a toy shop than an O scale collection.

Many modern electric toy trains comprise sophisticated electronic equipment which emit digitized sound effects and allow the operator to safely and easily run multiple remote controller trains on a single loop of track. In recent years, many toy rail operators will operate a train using a TV camera in the front of the motor and hooked up to a display, such as pc monitor. This will show an image, similar to that of a genuine (smaller size) railroad.

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