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The 3-rail system is used by the model railroad manufacturer Märklin in their HO scale trains.

In addition to the usual two rails they have a third rail in the middle of the track, made up of little "bumps" more or less hidden in the ties (sleepers). It looks like this:

------------------------------- <- rail
| | | | | | | | | | | | | | | | 
. . . . . . . . . . . . . . . .<-- bumps
| | | | | | | | | | | | | | | |<-- ties/sleepers
------------------------------- <- rail

Cross section:

 I  .  I
=========

Power is supplied through the middle rail, and returned through the other two rails. It is a bit less realistic compared to a two-rail system, but makes it a bit simpler to do complex layouts.

For example, a loop like the one below requires no special actions if you use the three-rail system, but requires a break somewhere in the track to avoid short-circuits if you use a two-rail system.

         _______
        /       \
      /         /
----------------

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