Some earliest steam powered engines claimed to be used in ancient times.
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 (FRANCE) In 1641 Marion de Lorme and the Marquis of Worcester visited together one of the Paris madhouses. Looking through the bars of his cell was a man named Solomon de Cause.

"I am not mad," he cried to the visitors, "I am not mad! But I have made a discovery that would enrich the country that would adopt it. But I am not mad. I am not mad."

"The poor creature says that he has discovered a wonderful power in the use of steam from boiling water," explained the keeper. "He came from Normandy, about four years ago, to present to the king a statement of the wonderful effects that might be produced from his invention. Cardinal Richelieu sent him away without listening to him. Solomon persisted, and, following the cardinal wherever be went, finally so annoyed him with his discovery that he had him shut up in the Bicetre as a madman."

The Marquis of Worcester, not being dependent upon Richelieu, went back to England to work at the same problem that had cost Solomon de Cause his liberty. He succeeded so well that in 1656 he erected in London a machine which "raised water more than forty feet by the power of one man only." What the machine was used for, or if it was used for anything, we are not told.

After this, however, progress was more rapid, and in 1718 steam was for the first time put into industrial harness by a Cornish miner named Savary, who built an engine to pump water from the mines. Forty seven years later in 1765 -     James Watt constructed his first steam engine at the Corson Iron Works, Glasgow, Scotland and the steam age began.

It believed that the great painter and artist Leonardo da Vinci was a great inventor also. The picture on the left what he visualised as a water pump through steam.

You can have a look at this page also : World Rail Development

      Though even before the age of steam engines, i.e., even in early 16^th Century, in England there were metalled( built with stone linings) tracks for horse-hauled trucks, the earliest is in 1630 - when a  man named Beaumont laid rails on a highway in England to transport coal from the Newcastle mines. This is the first railroad known in history. 

      Strictly speaking , the history of Railways goes back much further in time. Traces  of evidence are still available which establish that in devastated Pompeii, ancient Greece and even in the Middle-East, "rutways" in stone paving were in existence several centuries earlier, for facilitating haulage of wagons and chariots.

According to another opinion

Roads of rails called Wagonways were being used in Germany as early as 1550. These primitive railed roads consisted of wooden rails over which horse-drawn wagons or carts moved with greater ease than over dirt roads. Wagonways were the beginnings of modern railroads.

By 1776, iron had replaced the wood in the rails and wheels on the carts. Wagonways evolved into Tramways and spread though out Europe. Horses still provided all the pulling power. In 1789, Englishman, William Jessup designed the first wagons with flanged wheels. The flange was a groove that allowed the wheels to better grip the rail, this was an important design that carried over to later locomotives.

THE GAUGE 
       The distance between the two-wheel tracks was surprisingly the same, Just less than 1.5 meters, similar to standard gauge(4'-8.5") used on most modern Railways in the world today. The earlier vehicle were of course hauled by horses. It is a bizarre fact that dimension of this gauge is related to the size of the horse. 
The two bamboos of the yoke are spaced around 2'-6" to 2'-2" , and as these are in turn attached to the vehicle, allowing a clearance of 6" on either side for the horse body and 6" for the wheel, the gauge works out to 4'- 6" to 4'- 9". Apparently when the horses were replaced by locomotives the original track and vehicles were retained. This led to the proliferation of this size as the "STANDARD GAUGE" around the world.

When George Stephenson was building the Stockton & Darlington Railway he decided the rail gauge should be just over 4 ft 8 ins (1.44m). The reason for this was that was the width of the "wagon way" at Killingworth Colliery. However, after Stephenson had made this decision, other railway chief engineers followed his example and used the same rail gauge.

When Isambard Brunel was building the London to Bristol line in 1838 he decided to use what became known as the broad gauge (2.2 m) instead of the standard gauge (1.44m) on the line. Brunel argued that by using a wider track, he could provide larger and faster locomotives. It was also pointed out by Brunel that the broad gauge was safer and that locomotives would be less likely to leave the rails on sharp bends.

By 1844 the Great Western Railway had opened a new line from Bristol to Exeter and from Bristol to Gloucester where it met the standard gauge of the Birmingham & Gloucester line. This created problems as passengers and goods had to be transferred from one train to another.

In 1845 a Royal Commission looked into the subject of the railway gauge. After a long investigation that included committee members asking railway engineers over 6,500 questions, it was decided to recommend the use of the standard gauge. The Gauge Act passed by Parliament in 1846 made the standard gauge compulsory for all new railways. However, the Great Western Railway retained its broad gauge until 1892, when it was converted to the standard gauge
( source: http://www.spartacus.schoolnet.co.uk

But according to a different opinion   
1801 -   A short line of track for a horse railroad was laid between Wandsworth and Croydon in the  suburbs of London - the first chartered railroad on record. 

      But the greatest step which made possible the development of Railways to the admirable condition we saw in yester years is the invention of the Steam Locomotive Engine.The invention of the Locomotive Engine was made possible as a result of the earlier invention of the Railways.First it was discovered that trucks could be propelled by the adhesion of a smooth wheeled engine over a pair or smooth rails. 

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   The author of the page acknowledges help from old Eastern Railway Magazines IR magazines and from steam loco web pages and a lot many books and articles on the subject. Interested to read more such stories and know more on this subject steam engines?   Must visit http://www.history.rochester.edu/steam
 http://www.spartacus.schoolnet.co.uk
http://inventors.about.com

 Please post your comments  mreenaldas@yahoo.co.in 

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