Lionel Corp.

Lionel Corporation was an American toy manufacturer, specializing in toy trains and model railroads. Its trains, produced from 1901 to 1969, are the most famous toy trains in the United States and among the most famous in the world. In 2006, Lionel's electric train, along with the Easy Bake Oven, became the first two electric toys to be inducted into the National Toy Hall of Fame.

Although not the first to manufacture toy trains—its products originally were marketed as toys—Lionel is the most enduring brand name in the United States. Many of the decades-old trains in attics and basements in the United States were made by Lionel, and the products are popular with collectors.

Company History

The original Lionel Corporation was founded in 1900 by Joshua Lionel Cowen and Harry C. Grant in New York City. The company's devotees disagree over the date of incorporation, as the official paperwork gives a date of September 5, but the paperwork was not filed until September 22, more than two weeks later.

The Pre-War Era

Lionel's first train was not intended for sale to consumers, but rather, as a storefront display. Delivered in 1901, it ran on a brass track and was powered by a battery and a motor originally intended for use in an electric fan. Cowen hoped to use the public's fascination with railroads and electricity to capture the public's attention and direct it to the goods for sale. Members of the public started approaching store owners about buying the trains instead, prompting Lionel to begin making toy trains for the general public. The earliest trains were larger than the sizes commonly available today, running on two-rail track with the rails 2 7/8 inches apart. In 1906, Lionel began offering a three-rail track that simplified wiring of reverse loops and accessories. Its outer rails were 2 1/8 inches apart, which did not match any of the existing standards that other manufacturers had been using since 1891. Whether this was an accidental misreading of Märklin's Gauge 2 specifications or an intentional incompatibility is unclear, but Lionel named this non-standard track Standard Gauge, and then trademarked the name. When other U.S. companies began using Lionel's standard, they usually called it Wide gauge. Starting in 1915, Lionel followed most of its U.S. competitors and adopted the smaller O gauge standard for its budget-level trains.

By the end of World War I, Lionel was one of three major U.S. manufacturers of toy trains, and it grew rapidly due to shrewd marketing. Cowen began getting department stores to incorporate his toy trains as part of their Christmas tree displays, linking toy trains to Christmas and making them into popular Christmas presents. Lionel made its trains larger than anyone else, making them appear to be better values. When competitors criticized the realism of Lionel's trains--Cowen had been unwilling to invest in the equipment necessary for lithography, so its early offerings were simply painted with solid colors of enamel paint with brass detail parts--Lionel targeted advertising at children, telling children its products were the most realistic toy trains. Additionally, Lionel criticized the durability of competitors' products in ads targeted at parents.

By the 1920s, Lionel had overcome Ives to become the market leader, selling metal trains with colorful paint schemes. Lionel's fierce ad campaigns took their toll on Ives, who filed bankruptcy in 1928. Lionel and American Flyer bought Ives and operated it jointly until 1930, when Lionel bought Flyer's share. Lionel operated Ives as a subsidiary until 1932.

The Great Depression badly hurt Lionel. The company flirted with bankruptcy because the trains were considered a luxury item, and at the height of the Depression one of Lionel's more extravagant locomotives cost as much as a used Ford Model T. In an effort to compete with companies that were willing to undercut Lionel's prices without diluting its premium Lionel and Ives brands, Lionel introduced a line of inexpensive electric toy trains under the Winner Toys or Winner Toy Corp. brand name, which it sold from 1930 to 1932. The starting price for a set was $3.25, including a transformer.

These and other efforts to improve its financial standing were unable to keep Lionel from going into receivership in May 1934.

The product widely credited with saving the company was a wind-up handcar featuring Mickey and Minnie Mouse that ran on O gauge track and sold for $1. Lionel manufactured 250,000 units but was still unable to keep up with demand. At a wholesale price of 55 cents, the handcar's sales would not have provided enough profit to pay off Lionel's debts of $300,000, but it nevertheless provided much-needed cash. Lionel avoided bankruptcy and emerged from receivership the next year. By 1939, Lionel had discontinued its standard gauge products, concentrating instead on the more-affordable O gauge and OO gauge, which it had introduced in 1938.

Lionel ceased toy production in 1942 to produce nautical items for the United States Navy during World War II. The company advertised heavily, however, promising new and exciting products and urging American teenagers to begin planning their post-War layouts. It also introduced the so-called "paper train," a detailed set of cut-and-fold models of Lionel trains printed on cardstock that was notoriously difficult to put together.

The Post-War Era

Lionel resumed production of toy trains in late 1945, replacing their product line with less-colorful but more realistic-looking trains and concentrating on O gauge exclusively. Many of Lionel's models contained a new feature: smoke, produced by dropping a small tablet into the locomotive's smokestack.

During the 1950s, Lionel outsold its closest competitor, American Flyer, nearly 2 to 1, peaking in 1953. Some Lionel histories state that Lionel was the largest toy company in the world by the early 1950s. If this was the case, it was short-lived, as Lionel's total sales for 1955 were about $23 million, while rival Louis Marx, whose toys included more than just trains, had $50 million in total sales.

The time period from 1946 to 1956 is considered by many to be Lionel's golden age. The Lionel 2353 diesel locomotive, a representation of the EMD F3 in the colorful Santa Fe "Warbonnet" paint scheme first introduced in 1953, became an icon of the company and the era.

But Lionel declined rapidly after 1956. Hobbyists increasingly preferred the smaller but more realistic HO scale trains and kids' interest shifted from trains to toy cars. The shift caught Lionel off guard, and Lionel hastily brought out a line of HO scale trains in 1957 and followed with a line of slot cars as well. Neither approached the popularity its O gauge trains had enjoyed. Efforts to increase the sales of the O gauge trains by making them more cheaply were largely unsuccessful.

In 1959, Cowen and his son sold out their interest in the company and retired. The purchaser was Cowen's grand nephew Roy Cohn, a businessman and attorney who had become infamous during the McCarthy Anti-communist hearings. Cohn replaced much of Cowen's management with his own. The direction of the company changed, and a small number of Lionel fans consider 1959 the end of the "true" Lionel. Cohn's tenure with Lionel was not successful and the company lost over US$13 million in the four years he ran the company.

Lionel's efforts to diversify, which were accelerated under Cohn, were unable to make up for the public's declining interest in its trains. Meanwhile, Lionel's closest competitor was also fading. In January 1967 the parent company of rival American Flyer, The A. C. Gilbert Company, went bankrupt. Lionel bought the name and the product line in May of that year in a deal valued at $150,000. However, Lionel lacked the financial resources to do anything with the acquisition and filed bankruptcy itself less than four months later, on August 7, 1967. In 1969 Lionel Corp. sold the product dies for its struggling train line—sales had declined to just over $1 million per year—and rights to the brand name to cereal conglomerate General Mills. The Lionel brand name continues today, under the ownership of Lionel, LLC.

Some Lionel enthusiasts consider 1969 the end of "true" Lionel trains, since the design and manufacturing changed, sometimes dramatically, under Lionel's new ownership.

The end of Lionel Corporation

After the sale of its train product lines, Lionel Corporation became a holding company that specialized in toy stores. At its peak, Lionel Corp. operated about 70 stores, mostly in the eastern United States, under the names Lionel Kiddie City, Lionel Playworld, Lionel Toy Warehouse, and Lionel Toy Town. For a time it was the second-largest toy store chain in the country. However, the larger Toys R Us was consistently able to undercut its prices, and Lionel found it increasingly difficult to compete. It filed for Chapter 11 bankruptcy on June 14, 1991. By 1993 it had dwindled to 28 stores in seven states, and on June 2, 1993, it announced its intention to liquidate all of its stores and go out of business[1].

The Lionel trademarks were purchased by Richard Kughn, a Detroit real estate magnate who had bought the Lionel product line from General Mills in 1986. See Lionel, LLC.

The old Lionel factory in Hillside, New Jersey, where Lionel Corporation manufactured trains from the early 1920s up to 1969, burned in April 2004.

Identifying Lionel Equipment

With very few exceptions, all Lionel products can be identified by a four-number identifier, printed either right on the side of the car or locomotive, or stamped on the bottom.

Contrary to popular belief, not all Lionel trains are worth large sums of money. A Lionel 1110 Scout locomotive, for instance, typically sells for around US$40 in good condition—very close to what it would have sold for in 1949-1952. A rarer and/or more versatile locomotive from the same time period can sell for several hundred dollars, or, occasionally, more than $1,000.

Lionel's O-gauge tracks actually came in two different radii: O and O27. O scale is supposed to approximate 1/48-1/55 scale and O equipment can accommodate curves of no less than 31 inches in diameter. In practice, O27 cars are shorter than O gauge (but the same width and height) making them better able to handle sharper turns in the track -- as O27 track is 27 inches in diameter for a circle. O track tends to ride slightly higher than O27 track and come in longer sections. The two types are easily identifiable with a ruler: a straight section of O27 track is 7/16 inch high and about 8 3/4 inches long, while a straight section of O track is 11/16 inch high and 10 inches long. A circle of 8 pieces of curved standard O track measures 31 inches in diameter, while 8 pieces of O27 curves make a circle 27 inches in diameter, hence the name O27.

O27 trains will run without trouble on O track, but longer O locomotives and cars can struggle on the tighter curves of O27 track, coming to a stop or derailing.

The easiest way to identify the vintage of Lionel equipment is to examine the train couplers. Lionel trains made before World War II use toy-like couplers that resemble a hook. The cars tend to be made of metal and have colorful paint schemes, somewhat similar to those of a holiday tin. Lionel trains made after World War II use two types of couplers. The less common (and less desirable) couplers, used in Lionel's entry-level Scout series, are longer and resemble a capital 'G'. Scout couplers do not open. The more common couplers open when you pull a peg on the bottom of the coupler. These couplers are compatible with modern O-scale cars from Lionel and other manufacturers.

Toy trains manufactured by Louis Marx and Company between 1938 and 1978 often resemble Lionel trains and are largely compatible with them, but most Marx locomotives and cars are slightly smaller and have less detail than their Lionel counterparts. Many Marx locomotives had three-number identifiers, which helps distinguish them from Lionel, and many Marx cars had no identifiers at all. Marx couplers also differ from Lionel and are usually more toy-like.

Troubleshooting and Maintaining Lionel Equipment

Lionel locomotives tended to be durable. Frequently a Lionel locomotive that has been sitting for long periods of time will start running again if put on clean, corrosion-free track and gently guided by hand over the track with power applied. Axles can be lubricated with a light machine oil, and gears can be lubricated with a light grease. Avoid use of WD-40 or similar oils on Lionel locomotives.

The axles and wheels on Lionel train cars should also be lubricated. A small amount of a light oil should be applied with a small, fine tool, such as a toothpick. Household oils such as WD-40 are fine for this purpose. Lubrication permits longer trains and quieter operation.

The easiest way to remove corrosion from the tracks is to use a fine sandpaper, such as 600 grit. Track can be cleaned with isopropyl alcohol. Never use steel wool on Lionel track, as the particles are quickly attracted to the magnets in the locomotive motor and will ruin it. Excessively corroded or dirty track should not be used, as debris from the track will work its way into the locomotive and hinder its operation. Suitable replacement track is still readily available from many larger hobby shops.

The safest way to remove dust from the locomotive and cars is to use a very soft, dry paint brush. If necessary, a very soft-bristled toothbrush and a mixture of warm water with a very small quantity of dish detergent may be used to remove stubborn dirt. Avoid using laundry detergent, as it can damage the paint. If using a toothbrush, extra care should be taken on printed surfaces, as scrubbing will frequently remove the paint. Avoid using general-purpose household cleaners, as they can damage the paint or the plastic. In addition, some experts recommend against ever cleaning surfaces that are painted bright red, as Lionel's red paint is easily damaged.

If the wiring on a transformer is frayed, it should be replaced before use, as it is a shock and fire hazard.

External link

• http://www.postwarlionel.com - a database of Lionel trains, cars, and accessories manufactured between the years of 1945 and 1969, including photographs and descriptions