The midget Offy came into being because Earl Gilmore was tired of unreliable home built motors blowing up and delaying his programs at Gilmore Stadium. In the 1941 Kuns Racing Annual the 1938 AAA midget rules are printed. All overhead cam or overhead valve motors were limited to 105 cubic inches. Flatheads were allowed 136 cubic inches. Outboards or 2 cycles got 61 cubic inches. No special deals for anyone; no leveling the playing field. Want to cut up a Buick straight 8 or Chevy 6? Go ahead but keep it under 105 cubic inches. Plenty of diversity until the Offy and V8 60 basically chased everyone else away.
The entire rule book is less than two pages & most of it is about the rules for running the events. If only things were that simple today.