I am new to this and I have unpacked a very old train set. I think it is the Night Before Christmas set, model 90037 large set. And of course it doesn't work. Turn on power and nothing happens. I've checked the wire connections, track pieces are connected and clean.
 My question is, should the engine wheels spin freely? Mine do not.
 How do I test the engine to see if that is the problem?
Thank you,

The locomotive drive wheels should NOT spin freely. If they do, there's something wrong with the gears inside the loco.  Use the DC scale on a multimeter to verify power is actually getting to the track.  If it is, make sure the arrow on the bottom of the loco pilot truck is pointed forward. If it's not, it will create a short and the loco will not run.

Put the loco on the track and slowly turn the power up. If the light comes on, if it does not, it's most likely dirty wheels or debris between the wheels and pickup strips that ride on the wheels. If the light comes on, look closely to see if the loco moves at all in either direction. If it does, then stops, something is binding. Most likely the side rods.

If the light comes on, but the loco doesn't move at all, the gears may be jammed by dried out grease, or there is a broken wire to the motor. You'll have to open it up to see which.

Exploded diagrams can be found here:

Boiler & Cab - https://www.bachmanntrains.com/home-usa/dwg/dwgs/G816X-IS001-1_BODY.pdf
Chassis - https://www.bachmanntrains.com/home-usa/dwg/dwgs/G816X-IS002-2_CHASSIS.pdf
Wiring - https://www.bachmanntrains.com/home-usa/dwg/dwgs/G816X-IS001-2_WIRING_CONNECTION.pdf

Len

Thank you Len