Cleveland Models a model airplane manufacturer announces it 3/16" scale CD gage May 1937. Kits range from .45 to .95 cents ..balsa wood superstructure and printed paper overlays for skin, builder has to be creative on how to get them to run. 1938 Cleveland adds a 460 and 060 now with die-cast chassis and 6 volt motor from Knapp.
A C Gilbert adapts 3/16" scale bodies for his new O gauge line in 1938 . NMRA assigns "S" gauge to 3/16" scale ..7/8" gauge models .
American Flyer switches to S gauge in 1946. Postwar the Cleveland Models train line is sold by S Pikes . Many unsold Cleveland Models graphics were still available in the 1980's.
Please see link for Cleveland Models Chicago Great Western 4-6-0 pulling a string of freight cars
https://youtu.be/ThNM3tAymH0
Cheers Carey