This is a shortened version of a paper I wrote for my History of Sea Power class. Ignore the less than stellar prose, I was pretty tired when I wrote it. For further reading on the subject consult King Cotton Diplomacy: Foreign Relations of the Confederate States of America by Frank Lawrence Owsley.
In 1861, a naval blockade was declared on Southern ports, as part of the Union effort to win the American Civil War. Southern society was agrarian, taking more interest in good manners than in industrialization, and thus depended on trade for necessities. This was especially important during the war, when the South needed to import weapons, uniforms, and other necessities. Thus, with no significant navy of its own, the Union blockade produced a serious problem for the South. The one thing the South could rely on was it’s dominance in the cotton market, in particular, the British dependence on American cotton. Cotton exports to England valued about $150 million at the outbreak of the war, and the British milling industry was the livelihood of one sixth of the British population. Thus the Union blockade was a serious threat to the British textile industry. Southern planters even tried to use this threat to their advantage, placing an embargo on cotton in the early years of the war in the hopes that the subsequent loss of raw materials to British mills would cause English intervention. However, the outcome was not to the favor of the South, and the British textile industry continued to thrive despite the short lived embargo and the Union blockade.
In 1861, the Confederacy issued a cotton embargo in the hopes that the British would be so desperate for cotton that they would intervene on behalf of the Confederacy in the war. The embargo lasted until the spring of 1862, when cotton became the currency for supplies needed by the army. In the UK, a “cotton famine” coincided with the cotton embargo, causing unemployment rates to jump significantly in cotton mills. While some attribute a relationship between the embargo and the famine, this is not necessarily the case. Even during the cotton embargo, the British textile industry had a ready supply of raw cotton. The cotton crops of 1859 and 1860 were larger than normal, and the UK was beginning to import cotton from other countries such as India, Brazil, and Egypt, causing a surplus of raw cotton in the UK. In fact, there was such a surplus that the UK re-exported much of their cotton. The export of cotton increased every year from 1862 to 1866, and during the supposed cotton famine of 1861 to 1862, when the cotton embargo by the Confederacy was in place, the re-export of cotton to France was increased by a multiple of more than five. Clearly, the lack of American cotton was not severely affecting the supplies of the British textile industry.
In conjunction with the surplus of raw cotton, there was an overproduction of textiles in the years leading up to the American Civil War. Stores were packed with fabrics and yarns which greatly exceeded the actual demand of the public. Therefore it only made sense to close down textile production until the current stock could be sold off. Another theory is that, due to the threat of less cotton caused by the Union blockade, the prices for cotton soared during the early years of the war, and British cotton mills held onto their raw cotton stock, in hopes that they might use price increases to obtain a profit. Either way, it is clear that while unemployment rates in cotton mills were high during the cotton famine, the textile industry itself maintained efficiency and profit.
While there was a decrease in the cotton exported during the American Civil War, especially during the cotton embargo, the Confederacy soon realized that cotton was their only method of payment for much needed supplies. Thus the blockade runners were employed, slipping through the Union blockade to bring raw cotton to England in exchange for weapons and other necessities. Although many blockade runners made a limited amount of voyages, it was still a highly profitable and successful business. The Confederate coast stretched for 3,549 miles, and contained a great number of rivers and bays which provided access to the sea. Even with Union naval forces reached their peak, there was still plenty of room for Confederate ships to escape to the open ocean. Blockade runners such as the “Hattie”, the “Kate”, and the “Antonica” made multiple successful journeys through the blockade, and when the blockade was at its height only one out of six blockade runners failed.
The success of the blockade runners could also be attributed to their advanced construction. Steam power provided a greater speed than the ships of the US Navy could reach, the ships sat extremely low in the water, burned smokeless coal, and painted dull colors to provide a sense of invisibility. The content held in these blockade runners was cotton. Sources vary on how much cotton was actually exported, but some estimate that about one million bales were sent to Europe from 1862 to 1864. With this cotton, blockade runners were able to obtain both military and luxury goods to sell back to the Confederacy, captains making profits of $5000 during the height of the blockade.
Another important reason for the lack of impact of the Union blockade on the textile industry was the ready supply of cotton from markets outside of America. The potential for using India as an agricultural provider had been around since the 1820s, but the American Civil War spurred the British to action. They rapidly transported the necessary equipment for maintaining and harvesting a successful cotton crop, and even worked to redefine contract laws to give an advantage to merchants. By 1862 India provided seventy percent of the raw cotton used in the UK. In Egypt, the Ottoman viceroy Sa’id Pasha converted his lands into cotton farms, becoming one of the largest cotton producers in the world. This was part of a larger scheme to modernize Egypt via cotton sales, and in order to help Egyptian cotton production new canals, railroads, and processing technologies were built. Almost half of all fertile land in Egypt was devoted to cotton by the closing years of the American Civil War. Brazil doubled raw cotton exports during the war years, going from 32.4 million pounds in the 1850s to 61 million pounds in 1865. While these were the three biggest markets, they were by no means the only ones. Argentina, China, Central Asia, and parts of Africa all contributed to the cotton market.