Originally introduced by German toy manufacturer Märklin around 1900, by the 1930s three-rail alternating current O gauge was the most common model railroad scale in the United States and remained so until the early 1960s. In Europe, its popularity declined before World War II due to the introduction of smaller scales.
O gauge had its heyday when model railroads were considered toys, with more emphasis placed on cost, durability, and the ability to be easily handled and operated by pre-adult hands. Detail and realism were secondary concerns, at best. It still remains a popular choice for those hobbyists who enjoy running trains more than they enjoy other aspects of modeling, but developments in recent years have addressed the concerns of scale model railroaders making O scale popular among fine-scale modellers who value the detail that can be achieved.
In the United States, manufacturers such as the Ives Manufacturing Company, American Flyer, and Lionel Corporation used O gauge for their budget line, marketing either Gauge 1 or ‘Wide gauge’ (also known as ‘standard gauge’) as their premium trains. One of the Lionel Corporation’s most popular trains, the 203 Armoured Locomotive, was O gauge and ran on tracks with rails spaced 1.25 inches apart. The Great Depression wiped out demand for the expensive larger trains, and by 1932, O gauge was the standard, almost by default.
Because of the emphasis on play value, the scale of pre-World War II O gauge trains varied. The Märklin specifications called for 1:43.5 scale. However, many designs were 1:48 scale or 1:64 scale. Early Marx Trains and entry-level trains, usually made of lithographed tin plate, were not scaled at all, made to whimsical proportions about the same length of an HO scale (“half O”) piece, but about the same width and height of an O scale piece. Yet all of these designs ran on the same track, and, depending on the manufacturer(s) of the cars, could sometimes be coupled together and run as part of the same train.
After World War II, manufacturers started paying more attention to scale, and post-war locomotives and rolling stock tended to be larger and more realistic than their earlier counterparts. This has been reflected in the change of name from O gauge to O scale: gauge describes merely the distance between the rails, while scale describes the size ratio of a model as it relates to its real-world prototype.