The author points out the difficulty in designing steam locomotives of high overall efficiency, no matter to what type they may belong, and shows that the efficiency of Diesel locomotives is considerably higher, while they also possess certain other advantages, particularly in bringing about a reduction in permanent way maintenance costs. Early Diesel locomotives are described and an account is given of the collaboration between the German and Russian railways, to investigate various types of transmission, and of the transportable locomotive laboratory which was built for carrying out the necessary tests. The economic aspect of railway operation is carefully analysed, and the results of extended trials in Russia of steam, Diesel-electric, and Diesel geared locomotives are given and compared with the latest available figures for operating costs in this country, and with figures for sparsely populated regions in Asia. The author, while not advocating wholesale adoption of Diesel locomotives everywhere, arrives at the conclusion that they have a definite sphere of usefulness, particularly in regions where water is scarce or of bad quality. He also emphasizes the necessity for standardized types of Diesel locomotives, and suggests that owing to the inherent drawbacks in the transmissions both of the Diesel-electric and Diesel geared types, there may be a future for the Diesel locomotive with direct drive with an enlarged engine, provided that, by research and experimental work, the difficulties previously encountered with direct drive can be removed. The author also notes that from the point of view of fuel consumption and simplicity the speed of the Diesel engine and the number of cylinders should not exceed certain limits.