Beginning of 20th century was also the beginning for Lionel Trains, Part I

In my years as book editor at F+W Media, I’ve had my share of calls, letters and e-mails inquiring about toys of every shape, size and color.

Of all the toys I’m asked about, it’s toy trains — mainly Lionel trains — that receive the most inquiries. There’s no doubt Lionel trains hold a very special place in the hearts of train collectors everywhere. While I’m not a Lionel collector, they still hold a special place in my heart in the sense that Lionel trains books were the first books I edited.

I thought it would be a great opportunity to explore the history of this toy train icon. It’s impossible to talk about Lionel trains in just one article, so, this is just part one of a three-part series on Lionel trains. In Part I, we look at the years 1900-1942, known as the prewar era of Lionel trains.

Founded in New York City in September 1900, the company adopted the middle name of its creator, flash-lamp inventor Joshua Lionel Cohen, who in 1910 changed his last name to Cowen. Along with  his business partner, Harry C. Grant, Cowen’s first order of business was contract work with the U.S. Navy to produce fuses for mines.

With Navy work complete, Lionel moved on, specializing in electrical novelties like fans and lighting equipment. Cowen then got the idea of creating a toy train after seeing one displayed at a toy store while walking through lower Manhattan. Lionel’s first train, the Electric Express, was fitted with a fan motor and placed on a circle of steel rails.

With the general public’s fascination with railroads and electricity in mind, Cowen hoped his trains would capture the customer’s attention and direct them to the goods for sale at the stores that displayed the trains. But in an ironic twist, customers approached store owners about buying the trains instead. Lionel was now officially in the toy train-making business.

The first Lionel trains ran on two-rail, 2-7/8-inch track. In 1906, Lionel offered three-rail track. The gauge was re-sized to a non-standard 2-1/8 inch, which Cowen ironically called “Standard-Gauge.” Soon other toy train manufacturers would adopt this new-gauge track. Because Lionel trademarked the name Standard-Gauge, other manufacturers called theirs “Wide-Gauge.”

standard catalog of lionel trains

To compete successfully with the other toy train manufacturers, Lionel produced the smaller O-Gauge (1-1/4-inch-wide track) in 1915. While Lionel produced other sizes in the coming years, like OO-Gauge and HO-Gauge, it was O-Gauge where Lionel rose to fame and power.

By the end of World War I, Lionel was one of the largest toy-train manufacturers in the country, and it was growing rapidly due to shrewd marketing and promotion. Cowen convinced department stores to feature Lionel trains as part of their Christmas tree displays, linking toy trains to Christmas, thereby making them popular Christmas presents.

Because Cowen was unwilling to invest in the equipment necessary for lithography, the early trains were painted with solid (though unrealistic) colors of enamel paint with brass detail parts. Cowen said the majority of Lionel trains were purchased by mothers for their children, and the bright colors attracted women buyers.

Lionel targeted advertising at children, telling them Lionel trains were the most realistic toy trains. Lionel also criticized the durability of their competitors’ products in ads targeted at parents.

By the 1920s, Lionel overtook Ives to become the nation’s leading toy-train manufacturer. Ives soon filed bankruptcy in 1928. On July 31, 1928, Lionel and American Flyer bought Ives and operated it jointly until 1930, when Lionel bought American Flyer’s share.

But Lionel was not immune to the Great Depression. By 1930, Lionel’s operating profit dropped to $82,000 (its operating profit in 1927 had been more than $500,000). And in 1931, the company lost $207,000. However, Lionel trains were still an item of luxury. In fact, at the peak of the Great Depression one of Lionel’s more extravagant locomotives cost as much as a used Ford Model T.

Despite countless efforts to improve its financial standing, Lionel was unable to keep from going into receivership in the early 1930s.

In 1934, Lionel produced an O-Gauge wind-up hand car featuring Mickey and Minnie Mouse that sold for $1. Lionel manufactured more than 250,000 units but was still unable to keep up with demand. Nevertheless, the enormously popular hand car provided the cash necessary for Lionel to avoid bankruptcy and emerge from receivership. By 1940, Lionel stopped producing Standard-Gauge products, concentrating instead on the more-affordable O-Gauge and OO-Gauge products.

In June 1942, Lionel ceased toy production to produce military items during World War II. The company continued to advertised heavily, however, promising new and exciting products and urging American teenagers to begin planning their postwar layouts.

Coming up in Part II of our series on Lionel trains, we look at the postwar years 1945-1969, referred to as the glory years of Lionel trains. ?

Justin Moen is a collector of 1:18-scale die-cast cars, 1:16-scale die-cast farm tractors, and Hot Wheels. He has edited more than 25 titles for Krause Publications. He may be reached at

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