I finally got around to setting everthing back up for my O gauge. I took a single strand wire and inserted it into the serial connection terminal pin #5 and ran that directly to the house ground pin where the home made wall wart plugged into the power strip. I powered up the power strip which powered the Base-1 and PM-1(but left the 135w Power house transformer turned off ). I placed the Alco-1 locomotive on the tracks and let it communicate. After about 30 seconds I turned on the Powehouse and the train runs as it is supposed to. I can control the speed and the bell and horn sound when their respective buttons are depressed.
Thank you for all of your help.