The output of the cotton mills was increasing. By the end of the 1840s the factory system was completely established, the loom was improved into its modern form, and there were 35 cotton factories in Blackburn, which contained 150,000 spindles and 12,000 looms. The decade from 1850 to 1860 was one of ever increasing prosperity. By 1860, the number of mills had increased to 78, with 1,000,000 spindles and 29,000 looms in the town.
The foundation stone of the Cotton Exchange - now the Classic Cinema - had been laid, the Weavers Association formed and the Blackburn List worked out to cover payments for most types of cloth woven in the area. The consumption of cotton by the Blackburn cotton industry was 160,000,000 lbs. per annum, but significantly almost entirely American in origin. The estimated annual value of the cloth woven in the town was £9,000,000. The population had increased from 36,629 to 63,126 between 1841 and 1861.
In the year 1861 an event occurred which was to have a profound effect on Lancashire.