In doing some additional research, there were two versions of the general. The 1872 was the more substantial version with a three position e-unit and Magnetraction. In set form, it came with Super O track and the cars had lights, etc. It also has the gold bands. This is the picture from Tandem.
This next version is the 027 version No 1862, no Magnetraction and a two position e-unit. It has less detail and no gold bands.
So, this really does not answer the question why Lionel produced a new Five Star General with a No 1872, but gave us the 027 version with no gold bands. Maybe they did not have any Super O track to include? You Know, Topps randomly includes vintage baseball cards in new packs. They are usually stamped with a gold emblem. The acquire the old cards on the open market.
Lastly, I was able to find some old articles in CTT on the Lionel General. Its relatively easy to do in their DVD set. I wonder if there were any articles in OGR.
Dave, The bands are there, they just painted them grey and left the domes and bell molded bright yellow. They did a nice job on the Western Union General with the brass bands, gold stripes and lettering, I don't know why they ruined the Five Star set.