Hafner was a Chicago-based maker of clockwork-powered O gauge trains during most of the first half of the 20th century. The trains were inexpensive but durable. William Hafner developed the clockwork motor as a hobby around the turn of the previous century and put the motor in toys. Eventually he decided to make a train–perhaps he thought his two sons would like one–and he did. He even sold a set or two, but didn’t have the facilities to mass produce them, or the money to buy such a facility. So he approached William Coleman, who had an interest in a struggling farm tool company, and after Hafner secured an order for $15,000 worth of trains, Coleman agreed to use the company’s excess capacity to produce the trains.
And so began American Flyer, the company that battled Lionel for the hearts and minds of train enthusiasts for about sixty years, until 1967.
But for reasons that Coleman and Hafner took to their graves, the partnership dissolved in 1914. The sons didn’t know exactly what happened. John Hafner said Coleman had promised his father a larger share of the company if the trains proved successful, then broke his promise. John Hafner said the two families had animosity afterward. But Robert Hafner recalled receiving wedding gifts from the Colemans in 1917, and said the dissolution was purely for business reasons. Going it alone, William Hafner formed his own company, rented factory space for $50 a month, and started a product line that would last into the 1950s.
Unlike his erstwhile partner, Hafner didn’t have to deal much with Lionel. Hafner’s greater concern was with this upstart named Louis Marx.