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

Around 1875, technological improvements in materials and manufacturing allowed tin to be stamped, cut, wrapped, and lithographed faster than previously.
Toy trains were altered when Märklin, a German firm that specialized in doll house accessories, sought to make an equal toy for boys in which a continuous revenue stream could be ensured by selling add-on accessories for years after the initial purchase. In addition to boxed sets comprising 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 an operating train.

Electric trains adopted, with the first appearing in 1897, produced by the U.S. company Carlisle & Finch. As home use of electricity became more common in the early 20th century, electric trains gained popularity and as time moved 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 cargo. Toy trains by the first half of the 20th century were frequently made of lithographed tin; afterwards trains were often 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 kids, while electrical trains were marketed towards teenagers, particularly teenaged boys. It was during the 1950s the modern emphasis on realism in model railroading started to grab on.

Now, S gauge and O gauge railroads are still considered toy trains by their own adherents and are often accessorized with semi-scale model buildings by Plasticville or K-Line (who owns the rights to the Plasticville-like buildings created by Marx from the 1950s to the 1970s). However, due to 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 set.

Many modern electrical toy trains comprise sophisticated electronics that emit digitized sound effects and allow the operator to safely and easily run multiple remote control trains on one loop of course. In recent years, many toy rail operators may operate a train with a TV camera at the front part of the motor and hooked up to a display, such as pc monitor. This will show a picture, like that of a genuine (smaller size) railroad.

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