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The earliest toy trains were made of lead and had no moving parts. Some had wheels that turned, but these had to be pulled or pushed. Some of the early 19th-century drive toy rails were made from tinplate, like the large, durable, stylized locomotive toys from the U.S., that were painted gold and red and decorated with hearts and flowers. model trains railroading shows

Around 1875, technological advancements in materials and manufacturing enabled tin to be scraped, cut, rolled, and lithographed faster than previously.
Toy trains were revolutionized when Märklin, a German firm that specialized in doll house accessories, sought to make an equal toy for boys where a constant revenue stream could be guaranteed by purchasing add-on accessories for decades after the first purchase. Along with boxed sets comprising a train and track, Märklin offered extra track, rolling stock, and buildings sold separately, creating the predecessor to the modern model train layout featuring scenery and buildings in addition to a working train.

Electric trains adopted, with the first appearing in 1897, produced by the U.S. company Carlisle & Finch. As residential use of electricity became more common in the early 20th century, electrical trains gained popularity and as time went on, these electric trains grew in sophistication, gaining lighting, the ability to change management, to emit a whistling sound, to smoke, to couple and uncouple cars as well as load and unload cargo. Toy trains from the first half of the 20th century were often made of lithographed tin; later trains were often made mainly of plastic.
Pull toys and wind-up trains were marketed towards kids, while electric trains were marketed towards teens, especially teenaged boys.

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

Many modern electric toy trains comprise sophisticated electronic equipment which emit digitized sound effects and permit the operator to safely and easily run several remote controller trains on a single loop of course. In the last few decades, many toy train operators may operate a train using a TV camera at the front of the engine and hooked up to a screen, such as computer monitor. This will show a picture, like that of a genuine (smaller size) railroad.

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