About the middle of the nineteenth century, an anonymous officer of the Austrian Marine Artillery conceived of the idea of employing a small boat carrying a large charge of explosives, powered by a steam or an air engine and remotely steered by cables to be used against enemy ships. Upon his death, before he had perfected his invention or made it public, the papers of this officer came into the possession of Captain Giovanni Luppis of the Austrian Navy. Impressed with the potential of the idea, Luppis had a model of the boat built which was powered by a spring-driven clockwork mechanism and steered remotely by cables. In 1864, not satisfied with the device, Luppis turned to Robert Whitehead, an English engineer then manager of Stabilimento Tecnico Fiumano, a factory in Fiume, Austria (now Rijeka, Yugoslavia) on the Adriatic Sea. Whitehead was also impressed with the potential of such a weapon and became determined to build an automatic torpedo that could run at a given depth below the surface for a reasonable distance.

In October 1866, the first experimental model was ready. As designed by Whitehead, the model was driven by a compressed air-driven two-cylinder reciprocating engine, which gave the torpedo a speed of 6½ knots for a distance (range) of 200 yards. Compressed air for propulsion was stored in a section of the torpedo known then, and still known now, as the air flask at a pressure of 350 psi.

Austria, the first government to show interest in the invention, purchased and conducted experiments with the torpedo during 1867–1869. As a result, in 1869 Austria purchased the manufacturing rights from Whitehead for an unknown price, but permitted Whitehead to sell his torpedoes to other governments.

Contemporary Russian literature on torpedoes states that the first self-propelled mine (torpedo) was developed by the Russian inventor I. F. Aleksandrovskiy in 1865. In spite of successful tests of the Aleksandrovskiy torpedo, the Russian Naval Ministry preferred to buy the torpedoes designed by Whitehead which, it is claimed, were no better in quality or characteristics than the Aleksandorovskiy torpedo.

Reference: A Brief History of U.S. Navy Torpedo Development by E. W. Jolie.