Is this a 261 or 261E?

If it has a reverse lever inside the cab that moves vertically, it's manual reverse and it's a 261. If it has a solenoid E-unit reverse whose lever protrudes up through the top of the boiler and a cab plate that says 261E, it'll be a...... 

From your description it is a 261, thank you

You're welcome. 261Es came out in 1935, painted black with nickel trim. Yours has brass trim.

When the 261 was introduced in 1931 it was non-reversing. The reversible version was the 262, everything else was identical to the 261 except for the number plate and the addition of the switch. If the loco you picked up at York has a hand reverse switch in it, someone mounted it in AFTER it was shipped from the factory.

When Lionel introduced the 261E in 1935, besides adding the E-unit, they changed the number plates on the cab to read: "261E".

Ron M

I think I can add an ERR  system to it

While we are talking about the 261-262 series.  What cars came with the 261E

The 261E was available only 1935. It was available as a separate sale item with a 261T tender for $10.00 and in a set (set 269E O gauge distant control freight train)

This "outfit" consisted of

261E distant control locomotive

261T four wheel coal tender

654 oil tank car aluminum finish ( Sunoco )

659 dump car with tilting body

657 caboose richly trimmed in nickel

8 curved and 2 straight tracks

Number 88 controller and 1 OTC lockon

Price $10.95   

Any of the 600 series cars with latch couplers would be fine additions to this set and would look fine with the 261E locomotive and tender

These would include ( in addition to the cars in the set )  the

652 gondola

653 coal hopper

651 flat car

655 box car

656 cattle ( stock ) car

For passenger service you could get the 607 pullman and 608 observation car, which would also look fine.

Enjoy

Frank

Ives/Lionel 1695-1697 passenger cars look good, too