You most certainly can use a steam engine to make it possible to make a bigger steam engine by driving machine tools. So.

Stream engine can't modify itself. Sorry. Somebody using tool A to create tool B, isn't what we are discussing here.

Tool A should modify itself to become Tool B. And Tool B should modify itself to become Tool C and so on...

Modify itself? OK, I will grant you that there are no sentient, self-aware steam engines.