In 1937 the Cleveland Model & Supply Company  C-D) were manufacturers of wooden airplane kits, but decided to enter the
model railroad market. Their scale chosen was 3/16" to one foot on a 7/8" track gauge for a 1:64 ratio, and was marketed as
'C-D' gauge. The designation "S Gauge" originated at a
National Model Railroad Association Convention held in the summer
of 1943 where names of various gauges were officially adopted by a committee. Legend has it that
Al Kalmbach noticed the
repetition of S in the sixteenths and 'sixty-fourths' and suggested that "S" be adopted at that convention. As the legend
further goes, it was hot and getting late and the committee wanted to hit the tavern for a cold beer so "S" it was and the
meeting ended.

A. C. Gilbert Co. purchased the Chicago firm American Flyer in 1936 but did not use the designation until 1946 when they
introduced their two rail S Gauge line, most of which had been re-gauged from their "3/16ths - 0 Gauge" line, introduced in
1939 after most of the Standard and 0 Gauge inventory acquired from the Chicago company had been depleted. Gilbert
continued "S" production until the company failed in 1968, whereupon the
Lionel Corporation acquired the name, tooling and
most of the remaining inventory.
Hobby Surplus Sales bought much of the parts and unfinished inventory



A far more complete history of S can be found at the NASG website (
http://www.nasg.org/articles_1)
A Short History of S Scale