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I'll start with this:

I am a HO guy. Was born and raised a by a Family of HO Railroaders. So I know next to nothing about O-Gauge. Meet my wife, and she says HO is too small for under the Christmas tree...I tend to agree with her, because my Trains belong on my layout, not on the floor under the Christmas tree. Fast forward to now. We're in the local hobby store, and she falls in love with their O-Gauge layout, and wants it for under the Christmas tree. Crap. 

So I buy this on ebay: http://www.ebay.com/itm/POSTWA..._cvip=true&rt=nc

it came in, and it is BEAUTIFUL. Although, I am looking at it, and there is this switch at the top of the boiler, between the stack, and the bell, and I have Zero idea what it does...

Can someone point me in the right direction?

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That controls the E-unit. In one position, the engine will cycle between forward, neutral and reverse every time power to the engine is interrupted. When the switch is placed in the other position, the engine will be locked in whatever mode it is currently in, forward, neutral or reverse. Just play with it to understand it. You can't hurt anything.

Just to make sure you understand fully: In the normal sequence, each time you interrupt the power, it will cycle forward-neutral-reverse-neutral-forward, etc.

That cycle often confuses N scale or HO scale DC guys who use simple polarity switches to change a train's direction.

And if you lock the unit in neutral, it won't move at all between power interruptions. Just throw the lever back to sequence the E unit and then lock it in forward.

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