During World War II, the US Army Transportation Corps developed a Mikado for narrow-gauge lines that could be used in much of the world. The design was officially called “2-8-2 Dual-Gauge - African Theatre - 42' and 39 3/8' Meter Gauge” and was actually suitable for three gauges. It was originally intended to be used on meter gauge and cape gauge. Eleven locomotives were converted to three feet with spacers for the White Pass and Yukon Route in Alaska.

The locomotive was based on the Queensland Railways class C17. The cylinders were changed from 17 by 22 to 16 by 24 inches and the boiler pressure was increased by ten psi. With an axle load of 20,000 pounds, they could be used on most narrow gauge lines. They were built to be coal and oil fired and accordingly had tenders carrying 18,000 pounds of coal or 1,600 gallons of oil.

During the war, 741 locomotives were built by several manufacturers. In the following years, 52 more were built, which were no longer commissioned by the USATC and are therefore referred to as “copies”. Most of the wartime locomotives were delivered to African countries, others also went to Asia. When the Queensland Railway originally wanted to order 20 more C17s, they actually got the USATC standard design under the Lend-Lease agreement and designated these locos AC16.

After the war many used locomotives were sold to Southeast Asia and some came to the United Fruit Company in Central America. Some were also later resold over long distances, such as 16 of the Malayan Railways, which were sold to the Tanganyika Railway. They later became the East African Railways class 27. Overall, the S118 was used in at least 24 countries.