From water-powered textile mills, to mechanical looms, much of the machinery that powered America's early industrial success was "borrowed" from Europe.

Long before the United States began accusing other countries of stealing ideas, the U.S. government encouraged intellectual piracy to catch up with England’s technological advances. According to historian Doron Ben-Atar, in his book, Trade Secrets, “the United States emerged as the world's industrial leader by illicitly appropriating mechanical and scientific innovations from Europe.”

Among those sniffing out innovations across the Atlantic was Harvard graduate and Boston merchant, Francis Cabot Lowell. As the War of 1812 raged on, Lowell set sail from Great Britain in possession of the enemy’s most precious commercial secret. He carried with him pirated plans for Edmund Cartwright’s power loom, which had made Great Britain the world’s leading industrial power.

Halfway across the Atlantic, a British frigate intercepted Lowell’s ship. Although the British double-searched his luggage and detained him for days, Lowell knew they would never find any evidence of espionage for he had hidden the plans in the one place they would never find them—inside his photographic mind. Unable to find any sign of spy craft, the British allowed Lowell to return to Boston, where he used Cartwright’s design to help propel the Industrial Revolution in the United States.

Dr. Edmund Cartwright shown next to the Power Loom, which was inspired by machinery he saw in England. Hulton Archive/Getty Images

Founding Fathers Encouraged Intellectual Piracy

Lowell was hardly the first American to pilfer British intellectual property. The Founding Fathers not only tolerated intellectual piracy, they actively encouraged it. Many agreed with Treasury Secretary Alexander Hamilton, who believed that the development of a strong manufacturing base was vital to the survival of the largely agrarian country. Months before taking the oath of office as the first president in 1789, George Washington wrote to Thomas Jefferson that “the introduction of the late improved machines to abridge labor, must be of almost infinite consequence to America.”

The fledgling country, however, lacked a domestic textile manufacturing industry and lagged far behind Great Britain. The quickest way to close the technological gap between the United States and its former motherland was not to develop designs from scratch—but to steal them.

In his 1791 “Report on Manufactures,” Hamilton advocated rewarding those bringing “improvements and secrets of extraordinary value” into the country. Among those who took great interest in Hamilton’s treatise was Thomas Attwood Digges, one of several American industrial spies who prowled the British Isles in the late 18th and early 19th centuries in search of not just cutting-edge technologies but skilled workers who could operate and maintain those machines.

In order to protect its economic supremacy, the British government banned the export of textile machinery and the emigration of cotton, mohair and linen workers who operated them. A 1796 pamphlet printed in London warned of “agents hovering like birds of prey on the banks of the Thames, eager in their search for such artisans, mechanics, husbandmen and laborers, as are inclinable to direct their course to America.”

Digges, a friend of Washington who grew up across the Potomac River from the president’s Mount Vernon estate, was one such intellectual vulture. Foreigners recruiting British textile workers to leave the country faced £500 fines and a year in prison, and Digges found himself jailed repeatedly.

The American spy printed 1,000 copies of Hamilton’s report and distributed them throughout the manufacturing centers of Ireland and England to entice textile workers to the United States. His most successful recruit was Englishman William Pearce, a mechanic whom Digges thought a “second Archimedes.”

Dispatched to the United States with letters of introduction to both Washington and Jefferson, Pearce initially worked on manufacturing projects for Hamilton. He later established a cotton mill in Philadelphia that was personally inspected by Jefferson and George and Martha Washington. The first president praised Digges for “his activity and zeal (with considerable risk) in sending artisans and machines of public utility to this country.”

The first water-powered textile mill established by English-born Samuel Slater in Pawtucket, Rhode Island. Bettmann Archive/Getty Images

Pirated Technology Was Patented

Under the Patent Act of 1793, the United States granted dubious patents to Americans who had pirated technology from other countries at the same time that it barred foreign inventors from receiving patents. “America thus became, by national policy and legislative act, the world’s premier legal sanctuary for industrial pirates,” writes Pat Choate in his book Hot Property: The Stealing of Ideas in an Age of Globalization. “Any American could bring a foreign innovation to the United States and commercialize the idea, all with total legal immunity.”

That’s what Samuel Slater did. The English-born cotton mill supervisor posed as a farmhand and sailed for the United States in 1789. Having memorized the details of Richard Arkwright’s patented spinning frames that he oversaw, Slater established the young country’s first water-powered textile mill in Rhode Island and became a rich man. While President Andrew Jackson dubbed him “Father of American Manufactures,” the English had a quite different nickname for him—“Slater the Traitor.”

More than two decades after Slater’s emigration, the textile industry in the United States still lagged behind the British who had the cutting-edge technology of the Cartwright power loom, the water-driven machine that weaved thread into finished cloth. Living in Edinburgh, Scotland, under doctor’s orders to recuperate from nervous exhaustion, Lowell grew determined to bring British technology back to the United States.

Lowell’s upper-crust pedigree had made him an unlikely spy, but that was precisely how he gained access. Bearing letters of reference, the sickly American did not appear to be a threat to the textile mill owners and England and Scotland who gave him the unusual privilege of touring their factories, which were concealed behind fortress-like walls topped with spikes and broken glass. Lowell took no notes and asked few questions, but all the while he studied the power loom design and committed it to memory.

Back in Boston, Lowell did more than replicate the pirated British technology. With the help of Paul Moody, he improved upon Cartwright’s power loom in 1814 by constructing in Waltham, Massachusetts, the first integrated textile manufacturing mill, which converted cotton into finished cloth under one roof.

The spinning water wheels of American textile mills—and the stolen secrets upon which they were built—propelled the United States forward and quickly transformed it into one of the world’s leading industrial powers.