In those early days of the hobby the marketing and selling of model trains must have been a major challenge, especially for a maker like Scale-Craft hoping to go into a new scale in a big way. Besides great catalogs and print advertisements in publications such as Model Craftsman and Model Railroader, Donnelley decided that a newsletter would be of help to their marketing efforts.
Volume I, number 1 was published in May of 1938. This issue (as are most other issues) is four pages long and features elements of their O and OO gauge lines along with helpful articles. The OO gauge equipment featured are the tank car, hopper, and their OO switch kits (these were produced to match their line of OO sectional track on a metal base--see this article for more information on the track); on the O gauge side of things they featured the gondola, stock car, and two rail trucks. Articles included the topics of laying OO track (with fiber ties), applying decals in O and OO gauges, and wiring locomotives for two rail operation. But the most interesting item is the opening editorial from Donnelley himself. He began,
With this issue, Scale-Craft “Blow-Smoke” is born. I intend to use these columns in each issue to say what I wish in an informal manner. Every organ of this kind ought to have a purpose all its own and our purpose is to inform you what is new; to throw fresh light on what is old; and to help you in building and expanding your model system by giving you various construction hints not usually available nor fully described on instruction sheets. We will try to include in each issue a description of an attractive addition to your model system which you can make yourself and which is not found in available kits.Marketing was his major concern. Scale-Craft was at the time experimenting with different sales policies, which included a price reduction after the publication of their 1937 catalog and a change to direct sales. I will let Donnelley elaborate.
Since the change in our policy, there have been a great many rumors floating into our office. Most of them boil down to the belief that we are in distressed financial condition. This is emphatically not the case. Our financial condition has never been better and it is steadily improving. Our bills our paid and our inventory is well up. Our plant is fully equipped and we are incurring no new expenses that we are not prepared to meet.An example of their switch kit in box may be seen here.
Our reasons for changing our policy are these:
We found few dealers who were in a position to merchandise model railroad equipment properly. Not many were willing to stock our complete lines and give them the attention needed to keep them moving. This gave rise to complaints from many of our customers whom we directed to certain dealers. They found the dealers unhelpful—mere order takers, in fact. A still more important reason was the fact that selling through dealers necessitated too high a level of prices. We could not reduce them, as we have now done, while we were selling to dealers at approximately one-half list price. Lastly, we were unable to get enough wholesale volume to make it profitable, and, naturally, no business can last without a profit. …
No doubt many of you will wonder at the listing, herein and in our national advertising, of our three new display rooms and outlets. After several weeks of operating a strictly mail order business under our new policy, we decided to establish these display rooms in various parts of the country for the convenience of our customers. At present they are located in New York City, Los Angeles and San Francisco. They will not be operated as dealer-outlets in the strict sense of the term, but under a new plan. If the plan proves successful, other displays will be established in other cities.
Be watching for more soon from the Blow-Smoke newsletter; it is a fascinating window into the history of Scale-Craft and the marketing of American OO gauge. [Article updated 2012]
Continue to part 2 of series.