Machinery made factories possible. But the English had no intention of sharing their technology. They planned to keep the Industrial Revolution for themselves. Americans wanted those machines. Some people offered a big reward to anyone who could build a cotton-spinning machine in the United States . In England, no one who worked in a cotton factory was allowed to leave the country. A cotton spinner's apprentice named Sam Slater was one of the many who signed binding agreements with their employers called indentures. Sam's read this way: "This indenture witnesseth that Samuel Slater doth put himself apprentice to Jedediah Strutt for the term of six years and a half. During which time he faithfully shall serve his secrets, and keep his loyal commands."

Young Sam Slater had a remarkable memory. He memorized the way the spinning machines in Jedediah Strutt's cotton factory were built and operated. Then, in 1784, he ran off to London, pretended to be a farm worker, and sailed for America. He had the key to the Industrial Revolution with him—in his head. In 1790, Sam built a small cotton-spinning factory next to a waterfall on the Blackstone River at Pawtucket, Rhode Island . It was the first true American factory. Waterpower turned the machines that spun cotton fibers into yarn. Soon there were spinning mills—and, later, weaving machines—beside many New England streams .

Now that factories could turn cotton into yarn quickly and easily, there was a great demand for raw cotton. Anyone who could grow cotton would make a lot of money. But the cotton that would grow in most of America—short-staple cotton—has lots of dark seeds, and those seeds stick to the cotton balls. It took a worker all day to remove the seeds from just one pound of cotton . So cotton was very expensive.

Eli Whitney , a New Englander with an inventive mind, had just graduated from Yale when he arrived in Savannah, Georgia, to take a job as a teacher. He heard about the cotton problem. He said, "If a machine could be invented that would clean cotton, it would be a great thing." In 1793, he came up with a simple machine that removed seeds from cotton. He called it a "cotton engine"—the name was soon shortened to "cotton gin." A worker with a cotton gin could clean fifty pounds in one day—instead of just one pound.

Eli Whitney's cotton gin did a lot more than just supply cotton to northern mills; it transformed the whole economy of the South. It made the cotton pickers—who were slaves—essential. Slavery, which had been dying out, again became important economically. Whitney never expected that.