After years of running second-hand equipment, the parent companies of Spokane, Portland and Seattle Railway, Great Northern Railway and Northern Pacific Railway, agreed to allow SP&S to purchase its first new locomotives. These included three Northern E-1 class locomotives (700, 701 and 702) for passenger service and 6 Z-6 class Challengers (4-6-6-4s) for freight service.
700 was delivered on June 21 1938 joining the 702 pulling overnight passenger trains between Spokane and Vancouver, Washington, along the north shore of the Columbia River, with the 701 providing backup and pulling freight. Due to an undersized turntable, the Northerns didn't reach Portland, Oregon, until 1943.
By 1947, The Great Northern Railway had begun to streamline its premier passenger train, The Empire Builder, and had started adding diesels to the locomotive mix. SP&S also started purchasing diesels at this time, but they arrived after the streamlined cars were brought into service and for a few months, the 700s pulled the Portland section of the Empire Builder.
Through the late 1940s and early 1950s, the E-1s continued to pull secondary passenger trains, but by 1954, the diesels had completely replaced steam for passenger service and the E-1s were relegated to pulling freight trains until 1955.
Finally, on May 20, 1956, a spruced up 700, with its normally grey smokebox painted silver, pulled its last passenger train. The Farewell To Steam run had a total of 21 cars carrying 1,400 passengers from Portland, Oregon, to Wishram, Washington, in the heart of the Columbia Gorge and back again.
After the trip, the 700, 701, 702, Challengers and other SP&S locomotives were sent to the scrap line. At the same time, however, Union Pacific Railroad was offering to donate a steam locomotive to the city of Portland, Oregon, and not to be outdone, the SP&S offered the 700. The two locomotives (SP&S 700 and OR&N 197) were moved into Oaks Park along the Willamette River in 1958 and were soon joined by SP 4449 where they sat for nearly 20 years.
Though it's the third largest steam locomotive still in operation and expensive to run and insure, the 700 has managed a number of excursions since its restoration in 1990, including an historic double header with SP 4449 from Portland, Oregon, to Wishram, Washington, and back during the 2005 National Railway Historical Society national convention, and a 2002 "Steam across Montana" from Sandpoint, Idaho, to Billings, Montana, and back.
The 700 and its two companions now reside at the Brooklyn Roundhouse. The City of Portland leases the roundhouse from its current owner, Union Pacific Railroad (UP), but soon the locomotives will be moved, and the roundhouse will be taken down so UP can expand the yard, leaving it unclear where they will be stored. The 700 continues to be maintained by the Pacific Railroad Preservation Association and a dedicated team of volunteers.