Cotton diplomacy was the attempt by the Confederacy during the American Civil War to coerce Great Britain and France to support the Confederate war effort by implementing a cotton trade embargo against Britain and the rest of Europe. The Confederacy believed that both Britain and France, who before the war depended heavily on Southern cotton for textile manufacturing, would support the Confederate war effort if the cotton trade were restricted. Ultimately, cotton diplomacy did not work in favor of the Confederacy, as European nations largely sought alternative markets to obtain cotton. In fact, the cotton embargo transformed into a self-embargo which restricted the Confederate economy. Ultimately, the growth in the demand for cotton that fueled the antebellum economy did not continue. [1]
Until the American Civil War, cotton was the South's primary form of production. The Southern economy heavily relied on the continual growth and production of cotton. Southern cotton, also referred to as King Cotton, dominated the global cotton supply. By the late 1850s, Southern cotton had accounted for 77 percent of the 800 million pounds of cotton consumed in Britain, 90 percent of the 192 million pounds used in France, 60 percent of the 115 million pounds spun in the German Zollverein, and as much as 92 percent of 102 million pounds manufactured in Russia. [2]
In 1858 Senator James Hammond of South Carolina bluntly declared that without cotton,
This faith in King Cotton further added to the South's confidence in American cotton as economically dominant and as a global necessity.
On April 16, 1861, U.S. President Abraham Lincoln ordered a blockade of Confederate ports to weaken the Confederacy's economy. [5] Confederate President Jefferson Davis and his cabinet realized the Confederates could not compete economically with the Union because cotton exports served as the primary economic driver of the Confederate economy. The blockade restricted naval and merchant access to Confederate ports. It proved highly effective, decreasing cotton "exports to Europe from 3.8 million bales in 1860 to virtual nothing in 1862", and eventually stagnating the Confederacy's economy. [2] By late 1861 the Confederate Congress believed that the best way to remove the Union blockade was through cotton diplomacy, or a cotton embargo. De facto popular cotton diplomacy stopped Southern cotton exports [6] to Britain and Europe in 1861 "to coerce European intervention by withholding all exports of raw cotton or attempt to create a cartel that would reduce the quantity of exports to a level that earned monopoly profits." [3] In doing so, the Confederacy hoped to gain valuable allies to fight alongside them during the Civil War, or to generate enough profit from cotton to sustain the war effort.
In 1860, Europe consumed 3,759,480 bales of American cotton and held 584,280 bales of American cotton in reserve, compared to a mere 474,440 bales of East Indian cotton consumed by Europe and Britain. [3] Britain accounted for 366,329 bales of American cotton in reserve of the 584,280 bales across all of Europe. [3] Davis and the Confederacy believed "King Cotton's" dominance of the global cotton supply would force Britain and France to support the Confederate war effort in order to access cotton. Davis' intuition proved true insofar as many manufacturers in Liverpool and Manchester demanded "government recognition of the Confederacy", [2] while in France "delegations of cotton merchants and manufacturers converged on Paris to press the government to help make U.S. cotton accessible again . . . and pleaded with Napoleon to recognize the Confederacy and to bring the blockade to an end". [2]
The cotton embargo contributed to a cotton famine in Lancashire and to a sharp drop in cotton supply from 1861 to 1862, decreasing the consumption and stock of American cotton in Britain and Europe from 3,039,350 bales to 337,700 bales and from 477,263 bales to 67,540 bales, respectively. [3] However, Britain and France remained determined to maintain neutrality in the American Civil War. London worried about "the fate of its Canadian provinces, and its growing dependence on wheat and corn imports from the United States". Continental Europe "had an interest in maintaining a strong United States to balance British economic and military power". [2] Britain and continental Europe found other cotton supplies and in 1862 began importing cotton from Egypt and from the East Indies. Consumption of East Indian cotton increased from 742,390 bales to 1,034,865 bales and the stock decreased from 372,130 bales to 316,590 bales to help alleviate the cotton shortage. [3] In 1865 the consumption of East Indian cotton increased by 400,000 bales, indicating a decisive and forced substitution of cotton suppliers to Europe and Britain. [3] However, this did not recover all the deficit of American cotton. And East Indian and Egyptian cotton "was used only reluctantly and appeared likely to continue in a supporting role for the foreseeable future". [2]
The American Civil War was a civil war in the United States between the Union and the Confederacy, which was formed in 1861 by states that had seceded from the Union. The central conflict leading to war was a dispute over whether slavery should be permitted to expand into the western territories, leading to more slave states, or be prohibited from doing so, which many believed would place slavery on a course of ultimate extinction.
The Confederate States of America (CSA), commonly referred to as the Confederate States (C.S.), the Confederacy, or the South, was an unrecognized breakaway republic in the Southern United States that existed from February 8, 1861, to May 5, 1865. The Confederacy was composed of eleven U.S. states that declared secession; South Carolina, Mississippi, Florida, Alabama, Georgia, Louisiana, Texas, Virginia, Arkansas, Tennessee, and North Carolina; they warred against the United States during the American Civil War.
The Confederate States Navy (CSN) was the naval branch of the Confederate States Armed Forces, established by an act of the Confederate States Congress on February 21, 1861. It was responsible for Confederate naval operations during the American Civil War against the United States's Union Navy.
The Trent Affair was a diplomatic incident in 1861 during the American Civil War that threatened a war between the United States and the United Kingdom. The U.S. Navy captured two Confederate envoys from a British Royal Mail steamer; the British government protested vigorously. American public and elite opinion strongly supported the seizure, but it worsened the economy and was ruining relations with the world's strongest economy and strongest navy. President Abraham Lincoln ended the crisis by releasing the envoys.
At the time of the American Civil War (1861–1865), Canada did not yet exist as a federated nation. Instead, British North America consisted of the Province of Canada and the separate colonies of Newfoundland, New Brunswick, Prince Edward Island, Nova Scotia, British Columbia and Vancouver Island, as well as a crown territory administered by the Hudson's Bay Company called Rupert's Land. Britain and its colonies were officially neutral for the duration of the war. Despite this, tensions between Britain and the United States were high due to incidents such as the Trent Affair, blockade runners loaded with British arms supplies bound for the Confederacy, and the Confederate Navy commissioning of the CSS Alabama from Britain.
The Lancashire Cotton Famine, also known as the Cotton Famine or the Cotton Panic (1861–1865), was a depression in the textile industry of North West England, brought about by overproduction in a time of contracting world markets. It coincided with the interruption of baled cotton imports caused by the American Civil War and speculators buying up new stock for storage in the shipping warehouses at the entrepôt. It also caused cotton prices to rise in China, in which trade had been steadily increasing following the Second Opium War and during the ongoing Taiping Rebellion. The increase in cotton prices caused the textile trade to rapidly lose two-thirds of its previous value of exports to China from 1861 to 1862. The worldwide cotton famine also produced a boom in cotton production in Egypt and Russian Turkestan.
The Union blockade in the American Civil War was a naval strategy by the United States to prevent the Confederacy from trading.
The American Civil War was the first conflict where large armies heavily relied on railroads for transporting supplies. The Confederate States Army's railroad system was fragile and primarily designed for short hauls of cotton to nearby rivers or ocean port. Due to the South's limited manufacturing and industrial capacity, obtaining new parts during the war was challenging. Consequently, the railroad system deteriorated due to overuse, lack of maintenance, and systematic destruction by Union raiders.
"King Cotton" is a slogan that summarized the strategy used before the American Civil War by secessionists in the southern states to claim the feasibility of secession and to prove there was no need to fear a war with the northern states. The theory held that control over cotton exports would make a proposed independent Confederacy economically prosperous, would ruin the textile industry of New England, and—most importantly—would force the United Kingdom and perhaps France to support the Confederacy militarily because their industrial economies depended on Southern cotton.
The Confederate States of America (1861–1865) started with an agrarian-based economy that relied heavily on slave-worked plantations for the production of cotton for export to Europe and to the Northern US. If classed as an independent country, the area of the Confederate States would have ranked as the fourth-richest country of the world in 1860. But, when the Union began its blockade of Confederate ports in the summer of 1861, exports of cotton fell 95% and the South had to restructure itself to emphasize the production of food and munitions for internal use. After losing control of its main rivers and ports, the Confederacy had to depend on a delicate railroad system for transport that, with few repairs being made, no new equipment, and destructive raids, crumbled away. The financial infrastructure collapsed during the war as inflation destroyed banks and forced a move toward a barter economy for civilians. The Confederate government seized needed supplies and livestock. By 1865, the Confederate economy was in ruins.
Henry Hotze was a Swiss American advocate for the Confederate States of America during the American Civil War. He acted as a Confederate agent in Great Britain, attempting to build support for the Southern cause there. Hotze attempted to use liberal arguments of self-determination in favor of national independence, echoing the failed European revolutions of 1848. He also promised that the Confederacy would be a low-tariff nation in contrast to the high-tariff United States, and he emphasized the consequences of cotton shortages for the industrial workers in Britain, as caused by the Union blockade of Southern ports.
Prize Cases, 67 U.S. 635 (1863), was a case argued before the Supreme Court of the United States in 1862 during the American Civil War. The Supreme Court's decision declared the blockade of the Southern ports ordered by President Abraham Lincoln constitutional. The opinion in the case was written by Supreme Court Justice Robert Cooper Grier.
Louisiana was a dominant population center in the southwest of the Confederate States of America, controlling the wealthy trade center of New Orleans, and contributing the French Creole and Cajun populations to the demographic composition of a predominantly Anglo-American country. In the antebellum period, Louisiana was a slave state, where enslaved African Americans had comprised the majority of the population during the eighteenth-century French and Spanish dominations. By the time the United States acquired the territory (1803) and Louisiana became a state (1812), the institution of slavery was entrenched. By 1860, 47% of the state's population were enslaved, though the state also had one of the largest free black populations in the United States. Much of the white population, particularly in the cities, supported slavery, while pockets of support for the U.S. and its government existed in the more rural areas.
The United Kingdom of Great Britain and Ireland remained officially neutral throughout the American Civil War (1861–1865). It legally recognized the belligerent status of the Confederate States of America (CSA) but never recognized it as a nation and neither signed a treaty with it nor ever exchanged ambassadors. Over 90 percent of Confederate trade with Britain ended, causing a severe shortage of cotton by 1862. Private British blockade runners sent munitions and luxuries to Confederate ports in return for cotton and tobacco. In Manchester, the massive reduction of available American cotton caused an economic disaster referred to as the Lancashire Cotton Famine. Despite the high unemployment, some Manchester cotton workers refused out of principle to process any cotton from America, leading to direct praise from President Lincoln, whose statue in Manchester bears a plaque which quotes his appreciation for the textile workers in "helping abolish slavery". Top British officials debated offering to mediate in the first 18 months, which the Confederacy wanted but the United States strongly rejected.
The Second French Empire remained officially neutral throughout the American Civil War and never recognized the Confederate States of America. The United States warned that recognition would mean war. France was reluctant to act without British collaboration, and the British government rejected intervention.
The Confederate States of America financed its war effort during the American Civil War through various means, fiscal and monetary. As the war lasted for nearly the entire existence of the Confederacy, military considerations dominated national finance.
During the American Civil War, blockade runners were used to get supplies through the Union blockade of the Confederate States of America that extended some 3,500 miles (5,600 km) along the Atlantic and Gulf of Mexico coastlines and the lower Mississippi River. The Confederacy had little industrial capability and could not produce the quantity of arms and other supplies needed to fight against the Union. To meet this need, British investors financed numerous blockade runners that were constructed in the British Isles and were used to import the guns, ordnance and other supplies, in exchange for cotton that the British textile industry needed greatly. To penetrate the blockade, these relatively lightweight shallow draft ships, mostly built in British shipyards and specially designed for speed, but not suited for transporting large quantities of cotton, had to cruise undetected, usually at night, through the Union blockade. The typical blockade runners were privately owned vessels often operating with a letter of marque issued by the Confederate government. If spotted, the blockade runners would attempt to outmaneuver or simply outrun any Union Navy warships on blockade patrol, often successfully.
The diplomacy of the American Civil War involved the relations of the United States and the Confederate States of America with the major world powers during the American Civil War of 1861–1865. The United States prevented other powers from recognizing the Confederacy, which counted heavily on Britain and France to enter the war on its side to maintain their supply of cotton and to weaken a growing opponent. Every nation was officially neutral throughout the war, and none formally recognized the Confederacy.
S. Isaac, Campbell & Company in London started out as a boot manufacturer for the British military and later became one of the largest suppliers of arms and military wares to the Confederacy during most of the American Civil War. Before the war the firm handled large contracts for the British military, but after a corruption scandal it lost its privilege of doing any sort of business with the British government. The company then turned to supplying British militia, and then to the desperate Confederacy, which quickly became their largest customer. Confederate business and purchases of arms in Britain was conducted mostly by Confederate Major Caleb Huse, and his associate Major James Bulloch who acted as chief purchasing agents and diplomats for the Confederacy. Ultimately, it was the Confederacy's enormous debt to Isaac, Campbell & Company that was the primary cause of the company's ruin.
The economic history of the American Civil War concerns the financing of the Union and Confederate war efforts from 1861 to 1865, and the economic impact of the war.
1858 [...] Senator James Hammond of South Carolina delivers his 'Cotton is King' speech on March 4, expounding on the importance of the product to world industry and issuing a warning: 'No, you dare not make war on cotton. No power on earth dares to make war upon it. Cotton is king.'
Although congressmen frequently debated a national cotton embargo act, it never passed beyond the point of discussion. Davis was convinced that any such overt, coercive embargo would provoke the Europeans, as well as limit their motivation to confront the Northern blockade. [...] He encouraged Congress to talk freely, but never act, and depended on other factors to keep cotton from Europe. A nationwide enthusiasm for cotton diplomacy made a de facto embargo an accomplished fact. State legislatures and extra-legal citizens committees prevented most cotton from leaving the Confederacy in 1861. So effective were these citizens movements that the British Consul in Charleston, Robert Bunch, reported to London on June 5, 1861, when referring to an embargo, 'Any act of Congress would be superfluous.'