During the throes of the Industrial Revolution, the Baltimore & Ohio Railroad still ran on horsepower—literally. Steeds hauled the B&O’s railcars when the railroad launched in May 1830. But the company’s investors knew that only machines, not muscle, would be able to power trains over its planned 380-mile rail line between Baltimore, Maryland and Wheeling, West Virginia.

According to an 1868 lecture at the Maryland Institute by John H.B. Latrobe, a dramatic race between a horse and a little railroad engine would foreshadow the nation’s transition to machine power.

Engineers from Great Britain were skeptical that any steam-powered locomotive could handle the steep grades and negotiate the extremely sharp curves along the Patapsco River on the B&O system. Concerned about their investments, B&O directors turned to 39-year-old Peter Cooper, a self-educated inventor and businessman from New York City.

Cooper may not have had much railroad experience, but he had a tinkerer’s mind. “I had naturally a knack at contriving,” he recalled in a July 9, 1882 issue of the Boston Herald. Cooper had constructed a double boiler for his New York glue factory and worked with steam engines in developing a cloth-cutting machine and a continuous chain system to tow boats along the Erie Canal, which was rejected because it would take jobs from horse traders and feed suppliers. He had even obtained a patent for a self-rocking baby cradle that featured a fan to shoo flies and a musical instrument to play a lullaby.

“I told the directors that I believed I could knock together a locomotive,” said Cooper, who had a considerable financial incentive in making the B&O a success. He had invested in 3,000 acres outside of Baltimore through which a proposed B&O line would run and send the value of the land soaring. Cooper cobbled together a one-ton demonstration steam locomotive from an old brass engine he had and discarded wheels he found in a railroad shop. Unable to locate suitable iron pipes for his boiler, he broke apart two muskets and used their barrels as tubes.

The diminutive locomotive may not have looked like much, but it proved its power on its first test run on August 24, 1830. Cooper’s contraption successfully hauled a dozen passengers along a seven-mile run from Baltimore to Relay to become the first American steam locomotive to operate on a commercial track in the United States.

John H.B. Latrobe joined other B&O leaders on a subsequent test run along the railroad’s 13-mile double-track stretch from Baltimore to Ellicott’s Mills. With six people in the locomotive, which Latrobe dubbed a “Tom Thumb engine,” and another 18 in an open car, the directors were delighted as they reached a top speed of 18 miles per hour. The Tom Thumb impressed all the passengers by handling every curve and incline along the 72-minute journey.

Having seen the Tom Thumb chug by, however, the proprietors of the Stockton & Stokes stagecoach company were determined to derail the future. As the locomotive passed through Relay on its return to Baltimore, the stagecoach operators challenged Cooper to race his steam-powered invention against a horse-drawn railroad car side-by-side along the double tracks.

Cooper accepted the offer, and the locomotive and a gray horse, both yoked to railroad cars, toed the starting line with “the snort of the one and the puff of the other keeping time and tune,” according to Latrobe. When the signal was given, the steed darted to a half-mile lead as the Tom Thumb labored to build up a head of steam. The locomotive belched clouds of vapor as it started to gain ground. Eventually Cooper’s iron horse nosed ahead of the horse as its passengers gave a cheer. The gray’s master could only dip his head in disappointment as the machine age passed him by.

Suddenly, though, the locomotive’s roar morphed into a wheeze. A leather blower belt had slipped off a wheel, causing the engine to stop. As the horse regained the lead, Cooper burned his hands on the hot engine as he frantically tried to make the repair. By the time he was able to fix his contraption, it was too late.

Having built up an insurmountable lead, the horse won the race. But the triumph proved short-lived. The railroad directors came away from the test run so excited about the locomotive’s speed, power and ability to navigate tight curves that it was full steam ahead for the B&O.

“The real victory was with Mr. Cooper,” Latrobe told his audience in 1868. Hitching its future to steam power, the B&O in January 1831 advertised a $4,000 prize for the development of a more robust engine. By 1836, it had a dozen locomotives operating along its tracks and retired its horses.

Latrobe told a great story about the race, but did it actually occur? “I have not seen any hard proof of it happening,” says Travis Harry, director of museum operations at Baltimore’s B&O Railroad Museum. “The first mention of the race in any document was not until 1868 and for all the people who were supposed to be there, none mentioned it in letters, diaries or any articles at that time. But since the horse supposedly won, that would look bad on the railroad so they might not have wanted to mention it.”

Cooper did allude to a race occurring after the first experiments in an 1882 interview but mentioned few details. “It didn’t amount to anything,” he said. “It was rather funny, and the locomotive got out of gear.”

Although Cooper’s invention proved a success, he never built another locomotive. The polymath turned his attention to other ventures. A Cooper-owned rolling mill was the first in the United States to make I-beams and use the Bessemer process to make steel. He developed a remote-control torpedo and even obtained a patent for powdered gelatin.

In 1876, the 85-year-old Cooper became the oldest presidential nominee in American history after earning the Greenback Party nomination. Cooper’s ingenuity earned him a fortune, much of which he donated to found New York’s Cooper Union for the Advancement of Science and Art, which remains one of America’s top colleges.

As for the railroads, they transformed America by stitching together the young country and propelling the Industrial Revolution. Bullet trains can now whisk passengers at speeds topping 250 miles per hour, but they could be surpassed, much like the gray horse, by next-generation transportation systems, such as Elon Musk's proposed Hyperloop that promises to propel passengers at speeds of more than 670 miles per hour.