īy the end of World War I, Lionel was one of three major U.S. competitors and adopted the smaller O gauge standard for its budget-level trains. Starting in 1915, Lionel followed most of its U.S. companies began using Lionel's standard, they usually called it wide gauge. Whether this was an accidental misreading of Märklin's 2 gauge specifications or an intentional incompatibility is unclear, but Lionel marketed the non-standard track as 'The Standard of the World,' and soon adopted the name in catalogs as Standard Gauge and trademarked the name. 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.

In 1906, Lionel began offering a three-rail track that simplified wiring of reverse loops and accessories. Lionel's earliest trains were larger than the sizes commonly available today, running on two-rail tracks with the rails 2 7⁄ 8 inches apart. Much later, in 2014, Greenberg's Guide to Lionel Trains concluded differently: the first Lionel product was the motorized Converse Trolley, with the Electric Express being made to diversify the motor's use. Lionel sold 12 examples of the Electric Express. Instead, the public approached store owners about buying trains, prompting Lionel to begin making toy trains for the general public. Cowen hoped the public's fascination with railroads and electricity would draw attention to other goods for sale. Delivered in December 1900, it operated on a brass track and was powered by a battery and a motor that Cowen had intended to use for an electric fan. It was historically thought that Lionel's first train, the Electric Express, was not intended for sale to consumers, but rather, as a storefront display. Initially, the company specialized in electrical novelties, such as fans and lighting devices. 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 original Lionel Corporation was founded in 1900 by Joshua Lionel Cowen and Harry C.

3d ultra lionel traintown handcart