In 1901, 20-year-old William S. Harley drew up plans for a small engine designed for use in a regular pedal-bicycle frame. Over the next two years, he and his childhood friend Arthur Davidson worked on their motor-bicycle using the northside Milwaukee machine shop at the home of their friend Henry Melk. It was finished in 1903 with the help of Arthur’s brother Walter Davidson. Upon testing their power-cycle, Harley and the Davidson brothers found it unable to climb the hills around Milwaukee without pedal assistance, and they wrote off their first motor-bicycle as a valuable learning experiment.

They would continue to work on their Motor Bikes until 1907 when company was officially incorporated. They also began selling their motorcycles to police departments around this time, a market that has been important to them ever since. Harley-Davidson would manufacture 450 bikes in this year, 1908.