As the world began to emerge from the Depression, Marx observed that people might have more resources they were willing to devote to more expensive toys for their children. He noted that both Lionel and American Flyer were doing well with "scale trains". This put pressure on Marx to enter the scale market. He started development in 1939-40, likely planning to use the 999 engine as the "scale locomotive". The plan was to produce the full line by Christmas 1942. Of course this was interrupted by the War and restrictions on production. Marx decided to select "S" scale for his cars or 3/16" to the ft, however to take advantage of all the development work for tracks, crossings, and switches, unlike American Flyer he maintained "O" gauge and used his existing track. These freight cars were all metal, lithographed and equipped with metal automatic couplers. Two boxcars were made before the war , these are pictured here. Here are Marx "S" scale but "O" gauge box cars from 1941 (Note- they are placed on Lionel 3 rail track) , likely designed beginning in 1939-1940.
The #3200 NY, NH,&H box car
The Union Pacific # 9100 , note the clever use of lithographed "shadows" behind the ladder and stirrup steps to give a 3 dimensional look to the lithography.
Finally, since all things when pictured alone in a photo appear the same size, here is a comparison between the Marx 3/16"to the ft scale car and a Lionel 6464 (-100 in this case) which is very close to full 1/4" to the ft scale for a 40 ft box car.
The Marx scale line did add some new cars post 1945 but was never very extensive and they lasted until about 1957. The metal automatic couplers were replaced by plastic about 1953.