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In the heyday of the North America passenger train (say 1880's - 1950), many trains had an "Observation Car" as the last car. This came about due to the first Private Cars (from the 1870's) being configured with a "rear facing platform/deck", which had a surrounding (safety) handrail usually with brass trim. As Private Cars were coupled to the rear of the passenger trains, this allowed for a nice - and very unique - view of the scenery for the wealthy occupants. This "rear platform" became known as the Observation Platform, and the cars having one came to be called "Observation Cars". And, it wasn't long before the railroads started buying cars with Observation Platforms for their best trains. These Observation Cars were sometimes a full lounge car, but more often a combination lounge and sleeping car. Prior to about 1939 Observation Cars were only for 1st Class passengers, but eventually all-coach trains were built which also had Observation Cars.
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An Observation Car, circa 1920's, on the Milwaukee Road's Olympian, which ran from Chicago to Seattle. Note the "drumhead" and (1st Class passengers) on the "Observation Platform". This train was replaced - in 1947 - by the Olympian Hiawatha.
However, as the train speeds increased it became less desirable to sit outside in the wind. The railroads then introduced the Solarium Observation car which eliminated the open platform on the back but had an enclosed lounge with larger windows. Starting in the late 1930's, and continuing through the 1950's, the railroad car builders came-up with some marvelous enclosed Observation Cars that still displayed the train's name, but oftentimes in neon. There are (at least) five Observation Cars in the model train display case on the 3rd floor.
A streamlined Observation Car, circa late 1950's, on one of the Milwaukee Road's Twin Cities Hiawatha trains, which ran between Chicago and St Paul MN; covering 410 miles at an average speed of 65 mph. There were two each day in each direction, and were some the fastest trains in the world at time.
For an explanation of why the US lost all its fast trains, see the FAQ: "Why doesn't the US have fast trains" in the "Fast Trains" page.
Perhaps the pinnacle of railcar imagination; the Vista Dome Observation Car.
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