Castle Douglas was founded in 1792 by William Douglas, who claimed but had no close connection with the ancient Douglases of Threave Castle. He had made his money in an 'American Trade' and created a planned town on the shores of Carlingwark Loch. The town's layout is based upon the grid plan pattern of streets as used in Edinburgh's New Town, built around the same time. Sir William Douglas also created a number of industries in Castle Douglas, including hand-woven cotton factories from which Cotton Street derives its name.