Here's what I hear:

Oh, our pappy was an engineer so many years ago,
But it was in the woodshed that he taught us what we know.

The steam that blows the whistle never turns the wheel.
To drive that mighty engine along that road of steel,
From Maine to Californy, from Memphis to Mobile,
The steam that blows the whistle never turns the wheel.

Takes a ton of coal and water to get that train to go.
Only takes a thimble-full to make that whistle blow.

Oh, the steam that blows the whistle never turns the wheel.
To crush that wheat and barley and grind it into meal.
To spin that heavy gyro and keep that ship on keel,
[The steam that blows the whistle never turns the wheel.]

Notes:
Woodshed = the proverbial place that kids were spanked (paddled, whipped, whatever)
Maine to California = a cliché for the width of the USA, before Alaska and Hawaii became states.