King Cotton - British Position

British Position

When war broke out, the Confederate people, acting spontaneously without government direction, held their cotton at home, watching prices soar and economic crisis hit Britain and New England. Britain did not intervene because it meant war with the United States, as well as loss of the American market, loss of American grain supplies, risk to Canada, and much of the British merchant marine, all in the slim promise of getting more cotton. Besides that, in the spring of 1861, warehouses in Europe were bulging with surplus cotton—which soared in price. So the cotton interests made their profits without a war. The Union imposed a blockade, closing all Confederate ports to normal traffic; consequently, the South was unable to move 95% of its cotton. Yet, some cotton was slipped out by blockade runner, or through Mexico. Cotton diplomacy, advocated by the Confederate diplomats James M. Mason and John Slidell, completely failed because the Confederacy could not deliver its cotton, and the British economy was robust enough to absorb a depression in textiles from 1862-64.

As Union armies moved into cotton regions of the South in 1862, the U.S. acquired all the cotton available, and sent it to Northern textile mills. Cotton production increased in India by a factor of 700% and also increased in Egypt.