It all started in 1876, when two publishers, brothers Charles O. and Samuel Dowst, began to make small laundry accessories like metal collar buttons and cufflinks. In 1893 Samuel Dowst saw a Mergenthaler Linotype machine at the Chicago World's Columbian Exposition, which made metal type for printing by injecting hot lead into molds.
Dowst soon began producing more metal items, including die-cast promotional trinkets for clients like the Flat Iron Laundry Company, which bought them to give away to its customers' children. These items, which included a flatiron, a top hat, a Scottie dog, and a candlestick, would much later be adopted for use as tokens in the board games Monopoly and Clue.
In 1906 Dowst introduced the world's first die-cast toy car, and several years later began making one patterned after the Model T Ford, which went on to sell more than 50 million copies. The firm's toy vehicles were known as Tootsietoys after company founder Charles O. Dowst's granddaughter "Toots." They proved to be popular and automobile manufacturers paid for creation of the molds so they could be included in the company's line.
In 1926 Dowst was taken over by the company Cosmo, and the merged companies took the name Dowst Manufacturing Co. Together they would make a variety of toys like trains, airplanes, doll furniture, die-cast cars and trucks. By this time the firm had abandoned its publishing operations.
After WWII, the company returned to full-time toy production. Dowst soon added new items like western-style cap gun sets, which would prove popular in the late 1950s. By that time control of the firm had passed to Nathan Shure's grandsons Myron, Richard, and Alan.
The 1950s had seen the emergence of a number of new electronic toys, including Strombecker slot cars. The cars quickly became popular with kids. To cash in on the trend, in 1961 Dowst acquired the hobby division of manufacturer Strombeck-Becker, hired 14 designers, and retooled its factory to facilitate production of the car-and-track sets. Sales of the toys, which were marketed under the name Strombecker, jumped from 20,000 to 500,000 sets by 1963, making the company one of the industry's leaders in this category. With the cars now comprising the firm's main source of revenue, Dowst Manufacturing changed its name to Strombecker Corporation.
For several years Strombecker rode high on the slot car fad, but then sales plunged in the latter half of the decade. When the firm's largest customer like Sears and Roebuck & Co., canceled orders and tried to return all of its inventory, Strombecker faced financial ruin. The firm, which had recorded profits of $3 million at the peak of the boom, suddenly found itself facing annual losses of more than $6 million. As a consequence, Myron, Alan, and Richard Shure were forced to personally guarantee the company's loans, and to avoid bankruptcy they decided to return to the more traditional toys with which the firm had earlier found success. At this time Alan Shure left to run a business that made small electric motors, leaving Myron and Richard to run the business.
Source and more slot car history at slotcarhistory.com.