The 0-6-2T class E3 was designed by Stroudley to replace the 0-6-0T E1 in short-distance goods and shunting duties. He only ordered the production of one prototype in 1891, but did not survive its completion. His successor Billinton took some time to fix the teething problems and had Brighton produce 16 more in 1894 and 1895. They were also called “Small Radials”, while the E4 was called “Large Radials”.
From 1918, they were rebuilt with a new boiler that had an extended smokebox and was operated at a higher pressure of 170 psi. The Southern Railway later decreased the cylinder diameter from 18 to 17.5 inches. Only the prototype was withdrawn in 1934. The other 16 were all taken over by British Railways and the last one was gone by 1959.