Here is an S Gauge American Models streamlined Pennsylvania Railroad K4s 4-6-2 pacific running in the garden with a train of American Flyer cars. The PRR pacific streamline design was done by Loewy.
That building is indeed a model of a water tower with a stone base; it is a plastic gauge 1 model made by Märklin some 30 years ago. It is based on a water tower (wasserturm) in Crailsheim in Germany. The tower still stands and is a restaurant/bar: http://www.wasserturm-crailsheim.de/wasserturm.php
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