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The earliest toy trains were made of lead and had no moving parts. Some had wheels which turned, but these needed to be pulled or pushed. A few of the early 19th-century drive toy trains were made from tinplate, such as the big, durable, stylized locomotive toys from the U.S., that were painted red and gold and decorated with hearts and flowers. model trains york pa

Around 1875, technological improvements in materials and manufacturing allowed tin to be stamped, cut, rolled, and lithographed faster than previously.
Toy trains were altered when Märklin, a German firm that specialized in doll house accessories, sought to create an equivalent toy for boys in which a continuous revenue stream could be ensured by selling add-on accessories for decades after the first purchase. Along with boxed sets containing a train and track, Märklin offered additional 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 followed, with the first appearing in 1897, made by the U.S. firm Carlisle & Finch. As residential use of power became more prevalent in the early 20th century, electric trains gained popularity and as time went on, these electrical trains grew in sophistication, gaining light, 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 often made of lithographed tin; later trains were frequently made mainly of plastic.
Prior to the 1950s, there was little differentiation between toy trains and model railroads–model railroads were toys by definition. Pull toys and wind-up trains were marketed towards children, while electric trains were marketed towards teens, especially teenaged boys.
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.

Now, 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 even K-Line (who owns the rights to the Plasticville-like buildings created by Marx from the 1950s to the 1970s). However, as a result of their high price, one is more likely to locate an HO scale or N scale train set in a toy store than a O scale collection.

Many modern electrical toy trains contain sophisticated electronic equipment which exude digitized sound effects and permit the operator to safely and easily run multiple remote control trains on one loop of track. In recent years, many toy rail operators may operate a train using a TV camera at the front of the engine and hooked up to a display, such as computer monitor. This will show a picture, similar to that of a real (smaller size) railroad)

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