This is an overview of the chain drive. The chain to the right in the photo is the primary drive from the engine to the idler shaft. The chain to the left is the secondary chain that couples the idler shaft to the axle.  It passes through the deck through two 1/2" square holes. In fact, there is no reason that the holes couldn't be round, albeit a little larger, say 5/8" diameter.  To preserve the integrity of the deck, a 1/4" doubler plate is glued to the underside prior to making the holes.
In this photo, the secondary chain is easier to see.  The "U" shaped idler support can also be clearly seen, as well as the method of adjusting the chain slack.  The washers beneath the idler bracket were added after the chain had stretched from a few years service.  This method of taking up slack is just as valid in the construction of a new engine.  The correct fit is pretty loose.  The chain should be able to deflect at least 1/4" between the sprockets.  The only time you need to adjust out some of the slack is when the fit is so loose that the chain appears ready to jump a tooth.
This illustration shows the components of the drivetrain and how they relate to each other.

The part numbers shown in the next illustration are from Stock Drive Products. These parts may also be obtained through Sulphur Springs Steam Models.

All the sprockets and chain used on this engine are made of brass.
The gearing shown delivers a 7.3:1 reduction ratio. In other words, the engine has to make a little over seven revolutions for every turn of the wheels.  This increases the torque available at the wheels making it possible for the little oscillating engine to do some useful work.

This ratio works well with wheels of about
1 1/4" diameter.  Larger wheels would need a greater reduction, while smaller wheels would require less.  There are no hard and fast rules here - moderate deviations from these guidelines are perfectly OK.

DISCLAIMER
All content presented in these pages is for informational purposes only and does not constitute an endorsement or recommendation of any particular technique, component, or design practice. It is up to each individual visiting this site to research and decide for themselves the suitability and safety of any techniques, components, or design practices they may wish to employ in their own practice. You - and only you - are responsible for your safety. When approached correctly, building and operating live steam locomotives is a safe and enjoyable hobby. There are many books available in the hobby that can guide and educate the novice. Check with one or more of the online live steam discussion groups for recommendations.