This is a standard gauge electric rain set made by Ives Manufacturing Co. founded as a toy maker in Bridgeport, Conn. in 1868. This Ives Standard Gauge Set is a no. 701 comprising a No. 3241 electric locomotive, a No. 184 Buffet Car, a No. 185 Parlor Car, and a No.186 Observation Car.
The engine shown above is referred to as a 0-4-0 type. The engine has no painted steps and a 3rd rail; as such, I believe it was manufactured between 1922-24. I believe the cars have been repainted at sometime in the past as there are no markings on the cars.
Below is a picture of the No. 184 Buffet Car.
Below is a picture of the No. 185 Parlor Car.
Below is a picture of the No.186 Observation Car.
I have the original box for this train set as seen below.
Notice that the box contains the track clips that hold the track pieces together as seen below.
Below is a movie of the train running around the loop of original track that came with the set.
Below is a brief history of Ives Manufacturing and its relationship with Lionel (from Wikipedia):
Ives was founded in Plymouth, Connecticut by Edward Ives, a descendant of Plymouth colony governor William Bradford. Ives' trains were made of tin or cast iron and initially powered by clockwork, but like later electric trains, some models could whistle and smoke. Although several conpetitor toy companies were selling electric trains at the time, Ives opted to remain with clockwork, partly because many U.S. homes still lacked electricity but Ives did make electric-powered toy trains in later years. In 1928, Ives was purchased by Lionel and American Flyer. In 1930, Lionel bought out American Flyer's share in Ives and closed the Ives factory in Connecticut, moving operations to Lionel's New Jersey factory. Lionel kept the Ives brand on the market through 1932, then repositioned Ives for 1933, branding its entry-level trains as Lionel-Ives, then dropped the Ives name altogether following that year.