Abstract: The two axle locomotive of this invention includes a diesel engine directly coupled to a generator for generating power to a single electrical traction motor. Preferably, the drive motor is an AC traction motor which drives both axles of the locomotive using a single drive shaft assembly with a drive shaft affixed to an armature of the AC traction motor. Power to the AC traction motor is controlled by using a variable frequency alternating current control system. Auxiliary equipment power is also provided by the AC generator. In addition, by reversing the current in the AC traction motor the motor becomes an AC braking motor. Changes in the traction ability of each axle resulting from weight transfer between the two axles is automatically compensated for by the single drive shaft assembly. The suspension system includes a locomotive frame supported by the pair of axles using elastomeric springs, which also provides dynamic damping to limit the motion of the locomotive.