Cotton diplomacy refers to the diplomatic methods employed by the Confederacy during the American Civil War to coerce the United Kingdom and France to support the Confederate war effort by implementing a cotton trade embargo against the United Kingdom and the rest of Europe. The Confederacy believed that both the United Kingdom 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. In fact, the cotton embargo transformed into a self-embargo, which restricted the Confederate economy and ultimately, the growth in the demand for cotton that fueled the antebellum economy did not continue.
Up until the American Civil War, Cotton was the South's primary product. 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."
Senator James Hammond of South Carolina bluntly declared that "old England would topple headlong and carry the whole civilized world with her... No, you dare not make war on cotton. No power on earth dares to make war upon it. Cotton is king." This further added to 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. Confederate President Jefferson Davis and his Cabinet realized the Confederates could not compete economically with the Union because cotton was the primary economic driver of the Confederate economy. The blockade restricted naval and merchant access to Confederate ports, and proved to be 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. By late 1861, the Confederate Congress believed that the best way to remove the Union blockade was through cotton diplomacy, or a cotton embargo. Cotton diplomacy stopped cotton exports to the United Kingdom and Europe “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.” In doing so, the Confederacy would gain valuable allies to fight alongside with during the Civil War, or 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 consumed by Europe and the United Kingdom . The United Kingdom accounted for 366,329 bales of American cotton in reserve of the 584,280 bales across all of Europe. Davis and the Confederacy believed "King Cotton's" dominance of the global cotton supply would force the United Kingdom and France to support the Confederate war effort to access cotton. Davis’ intuition proved to be true as many manufacturers in Liverpool and Manchester demanded “government recognition of the Confederacy,” as well as in France where, “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.”
Initially, the cotton embargo caused a Cotton famine, a sharp, temporary drop in cotton supply from 1861 to 1862, decreasing the American cotton consumption and stock in the United Kingdom and Europe to 337,700 bales from 3,039,350 bales and to 67,540 bales from 477,263 bales, respectively. However, instead of pursuing Confederate cotton, the United Kingdom and France were determined to remain neutral in the American Civil War. The United Kingdom worried about “the fate of its Canadian provinces, and its growing dependence on wheat and corn imports from the United States” while continental Europe “had an interest in maintaining a strong United States to balance British economic and military power.” The United Kingdom and continental Europe found other cotton supplies and in 1862 began importing cotton from Egypt and the East Indies. Europe and the United Kingdom, albeit did not cover all losses in supply of American cotton, the East Indian cotton consumption increased to 1,034,865 bales from 742,390 bales and the stock decreased to 316,590 bales from 372,130 bales to help alleviate the cotton shortage. The consumption of East Indian cotton increased 400,000 bales in 1865 indicating a decisive and forced substitution of cotton suppliers to Europe and the United Kingdom. Still, East Indian and Egyptian cotton “was used only reluctantly and appeared likely to continue in a supporting role for the foreseeable future.”
- Ransom, Roger L. Economic History Association, "The Economics of the Civil War." Accessed March 24, 2013. http://eh.net/encyclopedia/article/ransom.civil.war.us.
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- Surdam, David G. "King Cotton: monarch or pretender? The state of the market for raw cotton on the eve of the American Civil War." The Economic History Review. Vol. 51. no. no. 1 (1998): 113-132. : http://www.jstor.org/stable/2599694 . (accessed March 20, 2013).
- Lincoln, Abraham, "Proclamation of Blockade Against Southern Ports," The History Place. Accessed March 24, 2013. http://www.historyplace.com/lincoln/proc-2.htm.