- Cotton diplomacy
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During the 1850s and the American Civil War, cotton diplomacy was the idea that Britain and France required cotton from the South (see King Cotton). However, the Confederate States of America significantly overestimated the leverage that the cotton trade would give them.
In 1861 Southern economists and oligarchs realized that with a blockade of southern ports they would be unable to compete with the north economically. Once they saw that a long war was unavoidable, and that the limited population of the South could not support a fully mobilized army, they made the decision in 1861 to embargo cotton exports. Cotton was then warehoused and used to prop up Confederate war bonds, which were then sold in Europe.
This embargo was effective at first, creating an instant source of income from the valuable cotton backed bonds, shutting down hundreds of textile factories, and putting thousands of people in Europe out of work, but the embargo became a disaster for the Confederacy when the British did not cave in to their demands, choosing instead to import cotton from Egypt and India in 1862.
The opening of these new markets caused the price of cotton to stabilize quickly, and by 1863 the Southern economy, which was completely tied to the price of cotton, had crashed, crippling the South's ability to secure any kind of alliance, or purchase badly needed war supplies.
This idea, known as a self-embargo,was also used by President Jefferson in his Embargo Act of 1807, and was similarly ignored during the Napoleonic wars in Europe.
References
- Charles M. Hubbard, The Burden of Confederate Diplomacy (1998)
- Howard Jones, Union in Peril: The Crisis over British Intervention in the Civil War (1992)
- Frank Lawrence Owsley, King Cotton Diplomacy: Foreign relations of the Confederate States of America (1931)
- http://www.pbs.org/wnet/ascentofmoney/featured/the-ascent-of-money-episode-2-bonds-of-war/90/
- http://mshistory.k12.ms.us/articles/291/cotton-and-the-civil-war
See also
Categories:- Economic history of the Confederate States of America
- Economic history of the American Civil War
- United Kingdom–United States relations
- American Civil War stubs
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