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The South’s Mighty Gamble On King Cotton
The highly lucrative cotton crop of 1860 emboldened the South to challenge the economic powerhouse of the North
Summer 2010 | Volume 60, Issue 2
Born of states’ rights, the Confederacy left enforcement of the embargo and the restriction of production to its component states. Louisiana forbade cotton to be brought into New Orleans after October 10, 1861, and burnt what had arrived rather than try to ship it out; patriotic Confederates rejoiced at the sight of great fires roaring in their ports. South Carolinian Edmund Rhett told the London Times that “you British must recognize us before the end of October  because of cotton requirements.”
Abraham Lincoln understood how the South was playing its cards and, not to be outdone by the Confederate embargo, imposed a Union blockade, an odd juxtaposition of policies by adversaries, both designed to prevent cotton from leaving the South. Prices spiraled from 10 cents to nearly two dollars a pound. Smuggling flourished.
Ironically, the Confederacy’s King Cotton strategy would fail because the arrogance-feeding harvests of the late 1850s and 1860 had given English textile factories great stockpiles on the eve of the war. The blockade- and embargo-fostered cotton famine would not begin to bite until 1862, when it was too late. The South had gambled disastrously, inexplicably not factoring in the surplus British inventories.
In September 1862, just as the mills finally began to grind down, the Union’s Army of the Potomac sent the Confed-erate Army of Northern Virginia reeling back out of Maryland. The rising ascendancy of the Union and the British fear of a Union invasion of Canada would now dictate Britain’s response to the Civil War.
By the end of 1862, Britain began feeling the pinch of the embargo, and a half million Lancashire residents went on the dole. By 1864 the “total destitute population” had risen to 811,000. Eager to win new friends, New York and Philadelphia businessmen sent the George Griswold and the Achilles to Liverpool, laden with flour, meat, and rice for the workers.
Despite its flawed strategy of embargo, the South used cotton effectively to barter for a large amount of British armaments. The CSS Fingal slipped through the blockade to land “15,000 Enfield rifles, more than two million cartridges . . . seven tons of artillery shells” at Savannah on November 12, 1861. Railcars took the payload in April to supply Albert Sidney Johnston’s men at the bloody Shiloh offensive in southwestern Tennessee. Three English-built raiders—the Alabama, Florida, and Shenandoah—ravaged the Union’s merchant marine. In 1872 Britain would pay reparations to the United States for these raiders’ depredations.
In March 1863 the cosmopolitan Confederate Secretary of State Judah P. Benjamin introduced the sophisticated Erlanger cotton bond for the European market, a precursor of modern international securities. Their interest and principal payable in either French francs or British sterling, the bonds were traded on several European exchanges. Their true enticement rested upon their convertibility into cotton, a viable substitute for gold. But Benjamin’s inspiration came too late to alter the outcome of the war.
Six weeks before Lee surrendered at Appomattox Court House, a writer in the New York Times called for a restoration of cotton production led by “white ingenuity and enterprise” combined with “black labor.” Not long after, the South’s “God-made monopoly” had regained three-quarters of the world’s export market. From the Civil War until the 1930s, cotton would remain America’s leading export.