40 was ordered by the Lancaster and Chester Railroad of Lancaster, South Carolina from the Baldwin Locomotive Works and was completed on December 2, 1925. Very little is known about 40's career on the Lancaster and Chester other than that it was primarily used to haul textiles.
In 1947, 40 was sold to the 3.7 mile long Cliffside Railroad, a short line in North Carolina. During its entire tenure on the Cliffside, the relatively diminutive 80-ton 2-8-0 was the largest locomotive the railroad owned.
Even though 40 was operational at the time, it only saw limited service in the summer of 1967 as stablemate 1533 was reportedly easier to run and fire and was more popular with engine crews. In 1974, 40 was rebuilt by the New Hope & Ivyland's new owners, the McHugh Brothers and returned to service. In the late 1970s in addition to 40 being taken out of service for repairs, the New Hope & Ivyland's passenger operations were handed over to the newly formed New Hope Steam Railway. From 1981 to 1986, 40 was the New Hope Steam Railway's workhorse, pulling the majority of their trains until the groups leadership changed in late 1986.
In 1990, the New Hope and Ivyland came under new ownership and 40 was rebuilt to operational condition by shop forces from the Strasburg Rail Road, returning to operation in June 1991.