The power pack which controls the railroad feeds power to the track at the lower right, marked “Feeders”. The track switches, marked “W1” and W2” allow track power only in the direction to which the turnout is set. The gaps isolate a segment of track.
When a train passing through W1 to the upper side track passes over the gap in that track, it either stops or continues depending upon the position of W2. If W2 is set for the straight position, then the train will continue. If W2 is set to the curved position, then the power is off for the straight segment and the moving train stops after is passes over the gap.
A train moving in the opposite direction can be controlled in the same manner. And, theoretically, a third train can be operated from the stub siding in between the two through tracks. Even the largest Arnold rapido layouts use this same control approach.
As noted earlier, this layout was started before command control, so there were at least two control issues.
Train Speed Control
Control of the trains would have originally been through a conventional DC power pack, which controlled trains by increasing or decreasing track voltage. The higher the voltage, the faster the train. Because this is a coffee table layout, the idea is to set the transformer for one “speed”, and then leave things alone. In the analog situation, the power pack would have been set for one voltage and the train would be left alone. In this situation it would go one speed on level track, then it would go slowly uphill and very quickly downhill.