Streamlined observation car models typically have three lights at the rear of the car, two red side lights and a larger fixture located above the rear door. Of the few color nighttime prototype pictures in the books I have, most show only the red side lights illuminated. The white light above the door is illuminated only in pictures of multiple observation cars in a dead-end station. My conclusion is that said light was only used when backing the train to the coach yard or wye. Am I correct?
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Many CB&Q observation cars were modified with an additional white light above the original red marker. The white light was illuminated for backward movements.
I once owned an MTH Premier Pioneer Zephyr which featured this type of dual lighting at each end. On reverse movements the obs light displayed white while the locomtive light displayed red.
The Streamliner-era NP North Coast Limited observation cars had only the two red side-mounted lights; no roof-mounted light at all; check the photos in this link:
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My conclusion is that said light was only used when backing the train to the coach yard or wye. Am I correct?
Yes, if the light was white. There was a rear end rotary valve ("caboose valve) behind a door panel inside the rear of the car, along with a light switch, a peanut whistle valve, and, if equipped, a windshield wiper valve, for a Trainman to use when backing.
Some railroads used a red light, sometimes being an oscillating light (Burlington and Great Northern come to mind) and used the red light as an additional red marker.