We tend to use "grade" these days to mean a level or standard, where Grade 1 is better than Grade 2, or vice-versa. In watches, that's not the case. Watch makers typically use the word "grade" the way we use "model" these days. The numbers are model numbers; they don't typically have any special meaning. A Grade 100 is no better or worse than a Grade 900 based on the numbers alone. It's just what the company decided to call it at the time.
"Railroad grade" watches are usually called "railroad standard" watches. As the railroad system became more complicated and ran on tighter schedules, the value of accurate watches became increasingly important. Railroad companies (particularly the better-run ones) would list their approved makes and grades for use by their employees; eventually a "standard" was adopted, and a list of makes and grades that fit the standard became the norm for everyone. In general, a standard watch was: American-made, size 16 or 18, 17-jewels minimum, temperature compensated, adjusted to five positions, lever set, open faced, stem at 12 o'clock (no side-winders), white face with black arabic numerals and bold, black hands.
Pocket watches in the 19th century, and well into the 20th, were typically just a movement that was fitted into a separate case. Thus you could buy a great watch movement and put it into an inexpensive nickel-silver case, and then have it refitted into a sterline silver or gold case as you could afford it. Or vice-versa. Because of this, movements and cases were made to standard sizes: the higher the number, the larger the watch. A size 12 was a typical ladies watch. Men's watches tended to be 16 and 18. But common watch sizes tended to get smaller over time.
Watch movements were typically made in two configurations: open face, which put the winding stem at the 12 o'clock position, or hunter-case, which put the winding stem at the 3 o'clock position. Hunter cases are the ones with a hinged-metal plate that covers and protects the watch crystal (dial glass). Many hunter-style movements were fitted into open-face cases anyway, but the stem is still positioned at 3 o'clock. These are colloquially called side-winders. If you're wondering why you couldn't just rotate the face 90°, the problem was that most watches had the second hand separate on its own dial at the 6 o'clock position, and you can't rotate the face with the second hand dial's works locked into position. Sweep-second hand watches don't become popular until well into the 20th century.
Elgin National Watch Co.
I believe they were actually the National Watch Company, based in Elgin, Illinois, but incorporated the city into their official name at some point.
Elgin concentrated on middle-class watches: lots of 7 through 15-jewel jobs. Not the best, but you don't need 23 jewels to get the job done. This was my father's favorite brand, so I have a bunch of them.
This is my Elgin Grade 111. By the serial number, it was made in 1883. It is size 18, 7 jewels, pendant wind, lever set. It was designed for a hunter case but mine was fitted into an open-face, nickel-silver case, which makes a sidewinder. I believe this is a common configuration on 111s.
It's easy to curl your lip at 7 jewels, but all it does is run and keep time. My father bought it at a swap meet or flea market and gave it me when I was probably 12 or so. It may have been cleaned once since then. I have to buff the tarnish with silver polish every so often, but I never have any other trouble with it. It's a wonderful watch.
According to the Elgin database, this is one of some 193,000 made.
Hamilton was based out of Lancaster, Pennsylvania, founded in 1892. They made "better" watches—fully jeweled and above. Hamilton is my favorite brand, but I usually can't afford them.
I bought this as a young adult because I wanted a Hamilton pocket watch to go with a Hamilton wrist watch I had. It was pre-internet and my father used to get sale circulars from an antique watch seller, so I bought it that way. I think I paid $100 around 1990 for it.
This is a grade 974. It went to the finishing department on Feb 7, 1911. It's a size 16, 17-jewel, pendant wind, lever set movement set into an open-face case. I believe it's gold-rolled. One of 325,000 made.
This one's adjusted to three positions and adjusted for temperature, so it's a quality watch. Not quite railroad grade—it's not adjusted for enough positions and the Roman numerals make it fail. But it's close.
Regardless, it's a beautiful watch. This is my weddings and funerals watch.
Railroad standard watches: http://ph.nawcc.org/Railroad/ Railroad.htm
Elgin (National Watch Co.): http://elginwatches.org/ databases/
Other pocket watch makes: https://pocketwatchdatabase. com/
Pocket watch information in general: http://www.pocketwatchrepair.com/how-to/how-to-main.php