Founded as the Novelty Iron Works by Edward H. and Charles Morgan in 1868, the forerunner of the Arcade Manufacturing Company conducted business in two small buildings with a staff of ten people.

In 1874 the company expanded, erecting a new and larger structure at the cost of $25,000.  They continued at the new location until 1885, when the Novelty Iron Works  was discontinued and reorganized as the Arcade Manufacturing Company by Albert Baumgarten, Cyrus Tobias and Edward H. Morgan.

The company moved their location in 1891, but that building was destroyed by fire in 1892.  Construction began on a new factory and foundry immediately.  Operations were resumed in 1893 at a newly platted site which became known as the Arcade Addition.  Local Freeporters still refer to this area of town as ?The Arcade.? 

The first products of Arcade were a cork extractor and a screen door hinge, but within two years they began assembling box type coffee mills.  Later the product line included lid lifters, small notions and novelties.  Few marked examples of this age of production exist.

Around the turn of the century they produced a miniature coffee mill which proved to be an immediate success. 

In 1908 the animal banks started.  The horse was first, and Arcade made horses in a variety of different poses.  Later a lion, seal, pig, buffalo, cow, rhinoceros and even a rat was added.  More animal banks followed in 1910, along with other bank figures such as a safe, clock and mailbox. 

In 1921 Isaac P. Gassman, secretary and sales manager, went to Chicago to visit a friend who was a former resident of Freeport and, at the time, was president of Yellow Cab Company.  The two men agreed that Arcade would manufacture a miniature copy of the well-known Yellow Cab. 

It was the first promotional toy to be built by Arcade.  At the time, toys were only 5% of the Arcade line.  The Yellow Cab sold so well that Arcade re-dedicated itself to larger, more expensive but well made toys. 
City kids bought the Yellow Cab in droves, but The Yellow Cab sold well among town boys, but most country kids had never seen a cab.  In 1922 the first farm toy was made, the Toy Fordson Tractor.  It's rumored that the driver on the toy tractor is Henry Ford himself.   Plows and trailers were also made, with the slogan "Tiny Plows for Tiny Plowmen!"

In 1923 Arcade discovered girls.  The Toy Food Chopper (looks like a meat grinder) was advertised with "Devoted doll mothers will refuse to feed their children anything but chopped food after trying out this Arcade toy food chopper."  The Food Chopper was followed by a toy stove, and eventually an entire toy doll house.

The doll house's walls were made of cardboard but the furniture was sturdy cast iron. The Historical Society has on display a complete set (including walls) from the 1929 doll house.

By 1926, Arcade had sales offices in New York, Philadelphia and Chicago.  That same year the "Tiny Arcadians" made their first appearance.  These were tiny elf-like creatures that supposedly made the toys - similar to the fairy tail shoemaker's elves. 

In 1927 a storybook about the Tiny Arcadians was published. 

In 1933 the Worlds Fair was in Chicago, and Arcade did its part with a fleet of toy Worlds Fair busses. 

During World War II the factory made war goods.  In 1945 the company was sold to the Rockwell Manufacturing Company.  A power tool division was added in 1946, but work was gradually moved elsewhere until only the armor plate division remained to be closed in