I've rewired many pieces of prewar equipment, particularly locomotives. The main problem is rubber insulation that has dired up and flakes off when you pinch it. I find that I can get most of that insulation off by pinching it with my fingers or pliers. After unsoldering one end, I slip on fabric insulation that I buy from Dr. Tinker. While the insulation is new, I am usually able to use the original metal wire. I've done that even with O and standard gauge engines from the 20's.
Malcolm Laughlin