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Not quite in the beginning, there was a newsagent called Tom Cooper who got into garden railways. He put an LGB layout in his shop window and started selling a few bits, including steam locos from a German firm called Beck- which unlike traditional British steam locos ran on this strange stuff called gas.
Eventually, he started to be a bit more ambitious, modifying the Beck locos to look more British and thus was born the Merlin Locomotive Works. Eventually he outgrew the Beck-based designs and started making his own, at a factory on the banks of the Banwy in Llanfair. Unfortunately he was a better hobby visionary than businessman. Merlin fell on hard times, and the creditors had him removed and the company put in charge of its former accountant. Fortunately this worthy knew lots about numbers and money. Unfortunately she knew little about small locomotives. Fortunately she cleverly found ways to save the company money. Unfortunately one of these was getting rid of some senior engineering staff. Fortunately costs went down. Unfortunately so did sales as quality declined. Fortunately the ex-engineer went on to found his own company which went on to achieve great things as Pearse Engineering. Unfortunately Merlin went under and disappeared.
Meanwhile, undaunted, Tom Cooper set up another Garden Railway business, Steamlines Models and Publications. This offered an irregular magazine "steamlines" (later to become Garden Railway World before being swallowed by GR), and some products- most of which were made by other people like the Motor Mule (Roger Hine/Friog) and Mr Merlin's Pooter (a Roundhouse special with modified bodywork).
At heart Tom was a pioneer, and when the 16mm market got crowded he looked for another unique approach. Buying an expensive CNC machining centre, he came up with a very unusual design of live steam model that featured a chassis chewed out of a solid metal block in one piece. Some designs were for 16mm and some for 22.5mm/ft (7/8" before it took off). There were British Bagnalls, generic American machines (hence the new company name) and the European-style beastie you've acquired. I don't think many were made before poor health overtook Mr Cooper and the business faded away.
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