About two years later, a second and much larger steam engine was purchased from John Thompson of Chicago, Illinois. The locomotive was in storage in the Central Vermont Railway roundhouse in New London, Connecticut and was moved to Marion in early 1975 to further complement the CO&E Railroad's historic roster. This new Canadian-built locomotive was former Roberval & Saguenay 2-8-0 #17, although since it was not in operable condition, the new engine couldn't be used in immediate service until an overhaul was performed. Despite a promising bright future, a tragic turnaround occurred on , when the CO&E's first major incident took place as a fire suddenly broke out inside the old Illinois Central depot. The building was completely gutted, leaving the building little more than an empty brick shell. The fire destroyed the railroad's main offices, which were located inside the depot, and two of the CO&E's six passenger cars used in its tourist operation; this huge loss permanently affected future tourist services and would eventually be abolished indefinitely a year later by . All was not necessarily lost after this incident when only four months later, the sold the CO&E Railroad its trackage and property altogether after they discontinued freight service along the entire route. With this new advantage in hand, the railroad's first common carrier freight services would commence soon afterwards and the first revenue train was pulled behind 2-4-2 #5 on . These changes in operation immediately took off successfully as freight customers started growing rapidly with CO&E's new locally owned and operated service. Piggyback service was also eventually added in when a large fleet of more than 200 new flatcars and 600 highway trailers painted for the CO&E Railroad were delivered. A new engine was acquired at the same time to help switch cars around when a small Davenport 35-Ton switcher arrived on the property in 1978. Not long afterwards, the first test run of the 2-8-0 steamer finally occurred on after an extensive four-year overhaul and quickly became the primary power of choice by July. As the next decade started for the Crab Orchard & Egyptian railroad, steam-powered freight service was still expanding and the railroad purchased several different freight cars of its own over the next few years; many of these included coal hoppers, covered hoppers, and 25 former Ahnapee & Western boxcars, all of which were lettered for the CO&E with their classic pyramid logo. By the mid-decade in , the St. Louis, Iron Mountain and Southern Railway in Jackson, Missouri made a deal to purchase the CO&E's 2-4-2T #5 steamer for use on their scenic tourist trains and the locomotive was eventually retired from revenue service soon afterwards to be sent to its new owner.