Classic Toys: Lionel Trains
“Lionel: The Father and Son Railroad”
Lionel trains are best known for their glory days—the 1950s—when young boys and their dads enjoyed designing train layouts as a great American pastime. Today many collectors and hobbyists enjoy the nostalgia and tradition of Lionel trains.
The Lionel Corporation was founded in 1900 by Joshua Lionel Cowen, an enterprising young inventor. He was born the eighth of nine children to Jewish immigrant parents in 1877. He had dropped out of college three times, unable to conform to the structure of a formal education. He took a job at Acme Lamp assembling battery lamps. His fascination with electricity lead to a patent for a device that could ignite a photographer’s flash powder using dry cell batteries. He also succeeded in creating several other inventions including mine fuses he developed under contract with the US Navy. Cowen grew up at a time when trains had only recently begun to travel across the country with the opening of the Pacific Railroad in 1869. In the late 19th century trains, were the most advanced form of travel and electricity was only beginning to be brought to private homes.
In 1900 Cowen founded the Lionel Manufacturing Company in New York City with his partner, Harry C. Grant, who had worked with him at Acme Lamp. They made a slow start at manufacturing, first creating an electric fan. The public’s response was positive at first, but quickly waned. After seeing a toy push train in a toy store window, Cowen got the idea of creating an electric train that could move on a circular track by itself. The Lionel Manufacturing Company produced the Electric Express as a display for the very toy store where Cowen had first seen the push train. This battery-operated train circled a track and was propelled by a fan motor. It was a large but simple open gondola-style wooden train car that attracted enough customer interest that the store owner requested twelve more train displays because customers wanted to buy them.
In 1902 the City Hall Park Trolley was introduced and was accompanied by a 2-foot long suspension bridge. They followed this model with the electric B&O locomotive with car bearing a motorized derrick. The previously released gondola car was changed from wood to metal construction. Lionel produced its first catalog in 1902 so train hobbyists could view their product lines and plan their own layouts. In 1904 Cowen married Cecelia Liberman. In 1918 the company name was changed to the Lionel Corporation. Cowen became one of the first manufacturers to use print advertising, placing ads in “The Saturday Evening Post”, newspapers and boys’ magazines.
Business for the Lionel Manufacturing Company really took off after Cowen convinced owners of some of the larger department stores to set up a Lionel train beneath their Christmas tree displays during the holiday season. The trains were advertised as a bonding activity for fathers and sons and Cowen hoped the additional exposure in department stores would encourage parents to buy electric trains for their sons as Christmas presents. His plan worked and within a few years Lionel was the biggest toy train manufacturer in the country.
Lionel struggled after the stock market crash of 1929 and through the Great Depression. They continued to falter after they released the No. 400E steam locomotive with a price tag of $42.50, placing it well out of reach for most families. Business improved with the release of the brisk-selling $1 Mickey and Minnie wind-up handcar. A new design trend called “streamline” became popular in the early 1930s and Lionel released train designs based on this new aesthetic. They introduced the Union Pacific diesel M10000, the Hiawatha and the Flying Yankee. In 1935 they introduced trains with a steam whistle. Artists created the first Lionel Showroom for the 1938 New York Toy Fair so people could view Lionel trains among handcrafted scale scenery. Lionel participated in the 1939 New York World’s Fair.
Toy train production was halted during WWII when Lionel was manufacturing compasses and compass cases for the US Navy’s defense efforts. Lionel encouraged people to use this downtime to plan future train layouts. Production of toy trains resumed in 1945 with a move to more realistic scale models. The postwar years through 1956 are considered Lionel’s “Golden Age”. 1953 was the most profitable year in Lionel’s history, but by the mid-1950s they saw significant decreases in sales. Trains were falling out of favor among young boys and were being replaced by toy airplanes and electric racing cars on tracks (slot cars). Hobbyists had begun to favor smaller model trains, or HO-scale models. Lionel responded to the market changes with both HO-scale model trains and slot cars, but their change in direction came too late and sales were disappointing. In 1959 Joshua Cowen sold his Lionel stock to his grand-nephew, Roy Cohn, and retired. Cohn changed most of the company’s management and thereby, the direction of the company. Collectors saw this as the end of Lionel trains as they had been.
Lionel began to diversify their business but profits did not rally. By 1966 40% of Lionel revenue was from government contracts. They filed bankruptcy on 1967. In 1969 they sold the Lionel brand to General Mills. They formed the holding company Lionel, LLC that operated approximately 150 toy stores during the 1980s, putting them up against huge chains like Toys R Us. Lionel continued to make trains, such as the highly successful and collectible Mickey Mouse Express. In 1990 there was an excellent reception of the reissue of the No. 700E. Together with the rock star and model train collector, Neil Young, Kughn developed a model train remote control and digital sound system called Liontech. The Lionel brand was sold to the wealthy real estate developer, Richard Kughn of Detroit, in 1986. Kughn sold the controlling interest of Lionel, LLC to Wellspring Capital Management in 1995. Lionel continued their train building tradition and produced a full-color catalog in 1996, the first in over 30 years.
In 2004 Lionel sought bankruptcy protection, and in 2008 they emerged debt-free. Today they are manufacturing Lionel trains for large department stores like Target and Macy’s as well as hobby shops.