From Today in History from the Library of Congress:
On February 28, 1827, the Baltimore & Ohio Railroad became the first U.S. railway chartered for commercial transportation of freight and passengers. Investors hoped a railroad would allow Baltimore, the second largest U.S. city at that time, to successfully compete with New York for western trade. New Yorkers were profiting from easy access to the Midwest via the Erie Canal.
Construction began at Baltimore harbor on July 4, 1828. Local dignitary Charles Carroll, last surviving signer of the Declaration of Independence, laid the first stone.
The initial line of track, a 13-mile stretch to Ellicott’s Mills (now Ellicott City), Maryland, opened in 1830. The Tom Thumb, a steam engine designed by Peter Cooper, negotiated the route well enough to convince skeptics that steam traction worked along steep, winding grades.