Cartwright produced and patented his loom, which was powered by steam and called it the Power Loom.

By 1850 over 2,50,000 improved power looms were at work in the English factories. Thus England became the cloth factory of the world.

The beauty of what is commonly called the Industrial Revolution lies in the fact that it started so humbly when in 1733 James Kay invented the Flying Shuttle, which made the process of cloth weaving very much faster. Then, in 1764 James Hargreaves invented the Spinning Jenny. Both these machines improved the efficiency of cloth production. This was followed by a water-powered spinning machine invented by James Arkwright; and a machine called the Spinning Mule. Soon after, Crompton invented the Mule, which was an improvement on Arkwright's Water Frame. The proliferation of the Mule resulted in the availability of plentiful good quality factory-made yarn, more than could be consumed by handlooms of the Flying Shuttle type. It set the stage for progress to the next level of power looms. This happened when Edmund Cartwright invented the first steam-powered weaving machine in 1787. The Power Loom could weave a much larger yardage of cloth per loom.

Cartwright steps in

Cartwright, originally from Nottingham, was born in 1743. Unlike Lay and Hargreaves, Cartwright was a graduate from Oxford University. After his studies he became the rector of a church in Leicestershire. He visited a cotton yarn-spinning mill, spinning yarn on a mechanically powered Mule, in 1883, which excited Cartwright's interest in an improved weaving machine. He was sure that he could develop something better. In two year's time, he produced and patented his new loom which was powered by steam and called it Power Loom. However, Cartwright's power loom needed to be improved upon and several inventors did just that. Once Cartwright's model was ready it was easier for the next set of people to improve upon it. It took William Horrocks 10 more years to perfect Crompton's Loom. Another man named Cort replaced the early wooden machines with new machines made of iron. With that the modern Power Loom was ready for mass use. These heavy looms needed more steam power to run which could only be generated by burning coal. By 1850 over 2,50,000 improved power looms were at work in the English factories. Thus England became the cloth factory of the world. After Cartwright had patented the first version of his power loom he set up a factory in Doncaster in 1785. But he was no businessman. As a result of his inexperience he went bankrupt in 1793, and he had to close his factory. But those who knew the textile trade profited by buying his power looms and running them to produce cheaper cloth. In 1809, the House of Commons voted him a sum of £10,000 in recognition of his contribution to the textile industry. Cartwright retired to a farm in Kent to live the life of a gentleman.

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In IndiaThe power loom was quickly integrated into the weaving industry. Thus both the production of yarn and cloth was being carried out at the same place, leading to economy of scale. However, the invention of the Power Loom had a disastrous effect upon India's economy. As the production on cloth increased in England, the cost of production went down. Once the machine-made cloth became available in England at cheaper rates, the terms of trade between India and England changed. England became an exporter of the cloth to India and India became an importer. It led to total ruin of India's handloom industry since cheaper imported cloth replaced the handloom cloth. And India's foreign trade balance became negative.