@ Ron Neale, if an engine kept running with a potato in the exhaust it simply proves that there was a serious leak upstream. I had a vehicle that developed a plugged catalytic converter and it would stall as soon as the engine caught. The clue to the problem was the screaming exhaust gas leaking out around the manifold heat valve. EGR only runs back a bit of gas, not enough to be useful. And a modern engine running properly has not much oxygen coming out the tailpipe, nor any hydrocarbons, and if it works perfectly, no CO, only CO2.
Betajet beat me to it. I know from personal experience that Exhaust Gas Recirculation (EGS) has been in use for a long time. Many, many years ago I left the 455ci engine of my Grand Prix running in the Harris Semiconductor car park, with the keys locked inside.
Not wishing to damage the car by breaking in, I decided to draw on the experience of my miss-spent youth and use the old potato up the exhaust pipe trick. All we then had to do was wait. We waited and waited and waited. How was it possible that an engine could keep running when no gases are exhausted. The answer the EGS system.
Author Brian you will be pleased to know the Bluebell Railway has reopened the cutting to East Grinstead.
Modern steam locomotives (with would be 1900 and later) would have substantial difficulties with this enhancement. The steam exhausted from the cylinders is blown out through the exhaust stack to increase the draft in the firebox and boiler. (This creates the chuffs in the exhaust.) I doubt that wet exhaust would have permitted much improvement in the unburned materials in the exhaust.
Actually, we do. It's called Exhaust Gas Recirculation, though it's mostly used to reduce nitrogen oxides (no laughing matter): http://en.wikipedia.org/wiki/Exhaust_gas_recirculation
Also, I read somewhere that in Los Angeles, California the emissions from a Toyoto Prius are cleaner than the air going in. It seems the SULEV Prius reburns hydrocarbons spewed out by SUVs and the many old cars still on the roads.