Founded in 1952, by Martin Robert Gross and Herman C. Ellinghausen Sr., the Severn Engineering Company has continued to manufacture and calibrate it's Low-Mu Permeability and Ferrite Indicators, which are used around the world today. Severn Engineering was originally created for the purpose of developing and manufacturing a field instrument known as the Severn Gage, to test the magnetic permeability of feebly magnetic materials for the U. S. Navy Bureau of Ships. It was used in the Mine Sweeper Program during the Korean War.

Mr. Gross and Mr. Ellinghausen were employed as civilians at the U. S. Navy Engineering Experimental Station that later became the David W. Taylor Research Laboratory in Annapolis, Maryland. In their area of research they had been concerned with the magnetic permeability of feebly magnetic stainless steel. The Navy's urgent need for a field instrument to measure magnetic permeability prompted the people in the Bureau of Ships to talk to Misters. Gross and Ellinghausen about producing such an instrument. An arrangement was made concerning a possible conflict of interest since both men were Federal Civil Servants. With this resolved, Severn Engineering Company was founded and the Severn Gage was designed. The Navy then placed an order for 317 instruments. Other orders soon followed from the Navy and contractors working for the Navy.

The Permeability Indicator was first developed and manufactured in 1952. Since it's invention, the Permeability Indicator, now called the Low-Mu Permeability Indicator, has undergone only minor design changes, and the Indicator retains it's original form today. The standards to calibrate the Indicator were developed by Severn Engineering with help from the Experimental Station and the National Bureau of Standards. These standards are still in use. The Indicator had it's own Military Specification (MIL-I-17142B) up until 1994 when it was phased out by the military. The Indicator is approved by ASTM A342-95 as an acceptable method for measuring low magnetic permeability. The Company has since developed its own Specifications and Quality Standards for the Permeability Indicator.

The Ferrite Indicator was developed in 1972 to measure the Ferrite content of Austenitic Stainless Steel weld metals. A Welding Research Council Sub-committee was asked to find a better way to measure Ferrite content of welds. The result was an arbitrary measure called Ferrite Number. The American Welding Society and the industry have accepted this as the standard measurement of Ferrite content in welds. The standards for the Ferrite Indicator were based upon the Ferrite Number. They were designed by Severn Engineering Co. and Babcock and Wilcox. Ferrite Indicators can be calibrated either by Ferrite Number or by Percent Ferrite. The Ferrite Indicator is approved by ASTM A 799/A799M-04 and ANSI/AWS4.2M/A 4.2-1997 as an acceptable method for measuring Ferrite content of welds. The Company has since developed its own Specifications and Quality Standards for the Ferrite Indicator.