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Excerpt from: http://en.wikipedia.org/wiki/Shay_locomotive:

Ephraim Shay (1839–1916), was a schoolteacher, a clerk in a Civil War hospital, a civil servant, a logger, a merchant, a railway owner, and an inventor. He lived in Michigan.
In the 1860s he became a logger and wished to devise a better way to move logs to the mill than on winter snow sleds. He built his own tramway in 1875, on 2 ft 2 in (660 mm) gauge track on wooden ties. This was much more efficient than his competitors because he could log all year round.
Two years later he invented the Shay Locomotive. In about 1877 he developed the idea of having an engine sit on a flat car with a boiler, gears, and trucks that could pivot. The first Shay only had two cylinders and the front truck was mounted normally while the rear truck was fixed to the frame and could not swivel, much as normal drivers on a locomotive. He mounted the 3-foot (914 mm) diameter by 5-foot (1,524 mm) tall boiler centered on the car with the water tank over the front trucks and the Crippen's engine mounted crossways over the rear trucks. Shay experimented first with a chain drive from the engine through the floor to the truck axle. It is not known if he powered one or both axles, but he soon found that the chain drive was not practical and he next tried a belt drive. It did not take long for the idea to become popular.
Shay applied for and was issued a patent for the basic idea in 1881. He patented an improved geared truck for his engines in 1901.^[2]
Lima Locomotive Works of Lima, Ohio built Ephraim Shay's prototype engine in 1880. Prior to 1884, all the Shays Lima produced weighed 10 to 15 short tons (8.9 to 13.4 long tons; 9.1 to 13.6 t) each and had just two cylinders. In 1884, they delivered the first 3-cylinder (Class B) Shay, and in 1885, the first 3-truck (Class C) Shay. The success of the Shay led to a major expansion and reorganization of the Lima company. When Lima first received the Shay idea it was not impressed, until John Carnes influenced the company to use the idea, resulting in the classic Shay design.
In 1903, Lima could claim that it had delivered the "heaviest locomotive on drivers in the world", the first 4-truck (class D) Shay, weighing 140 tons. This was built for the El Paso Rock Island line from Alamogordo, New Mexico to Cox Canyon, 31 miles (50 km) away over winding curves and grades of up to 6 %. The use of a two-truck tender was necessary because the poor water quality along the line meant that the locomotive had to carry enough water for a round trip^.
Lewis E. Feightner, working for Lima, patented improved engine mounting brackets and a superheater for the Shay in 1908 and 1909.
After the basic Shay patents had expired, Willamette Iron and Steel Works of Portland, Oregon, manufactured Shay-type locomotives, and in 1927, Willamette obtained a patent on an improved geared truck for such locomotives. Since "Shay" was a trademark of Lima, strictly speaking it is incorrect to refer to locomotives manufactured by Willamette and others as "Shays". Six Shay Patent locomotives, known as Henderson-style Shays, were built by the Michigan Iron Works in Cadillac, Michigan.

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For lots and lots of information on the Shay Locomotives, please drop by this site:

http://www.gearedsteam.com/shay/shay.htm

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By the way, didn't you just LOVE that whistle?????   :o)