Which did not contribute to the rise of King Cotton?

King Cotton was a phrase coined in the years before the Civil War to refer to the economy of the American South. The southern economy was particularly dependent on cotton. And, as cotton was very much in demand, both in America and Europe, it created a special set of circumstances.

Great profits could be made by growing cotton. But as most of the cotton was being picked by enslaved people, the cotton industry was essentially synonymous with the system. And by extension, the thriving textile industry, which was centered on mills in northern states as well as in England, was inextricably linked to the institution of American enslavement.

When the banking system of the United States was rocked by periodic financial panics, the cotton-based economy of the South was at times immune to the problems.

Following the Panic of 1857, a South Carolina senator, James Hammond, taunted politicians from the North during a debate in the U.S. Senate: "You dare not make war on cotton. No power on earth dares make war upon it. Cotton is king."

As the textile industry in England imported vast quantities of cotton from the American South, some political leaders in the South were hopeful that Great Britain might support the Confederacy during the Civil War. That did not happen.

With cotton serving as the economic backbone of the South before the Civil War, the loss of enslaved labor that came with emancipation changed the situation. However, with the institution of sharecropping, which in practice was generally close to enslaved labor, the dependence on cotton as a primary crop continued well into the 20th century.

Conditions Which Led to a Dependence on Cotton

When white settlers came into the American South, they discovered very fertile farmland which turned out to be some of the best lands in the world for growing cotton.

Eli Whitney's invention of the cotton gin, which automated the work of cleaning cotton fiber, made it possible to process more cotton than ever before.

And, of course, what made enormous cotton crops profitable was cheap labor, in the form of enslaved Africans. The picking of cotton fibers from the plants was very difficult to work which had to be done by hand. So the harvesting of cotton required an enormous workforce.

As the cotton industry grew, the number of enslaved people in America also increased during the early 19th century. Many of them, especially in the "lower South," were engaged in cotton farming.

And though the United States instituted a ban against importing enslaved people early in the 19th century, the growing need for them to farm cotton inspired a large and thriving internal trade. For example, traders of enslaved people in Virginia would transport them southward, to markets in New Orleans and other Deep South cities.

Dependence on Cotton Was a Mixed Blessing

By the time of the Civil War, two-thirds of the cotton produced in the world came from the American South. Textile factories in Britain used enormous quantities of cotton from America.

When the Civil War began, the Union Navy blockaded the ports of the South as part of General Winfield Scott's Anaconda Plan. And cotton exports were effectively stopped. While some cotton was able to get out, carried by ships known as blockade runners, it became impossible to maintain a steady supply of American cotton to British mills.

Cotton growers in other countries, primarily Egypt and India, increased production to satisfy the British market.

And with the cotton economy essentially stalled, the South was at a severe economic disadvantage during the Civil War.

It has been estimated that cotton exports before the Civil War were approximately $192 million. In 1865, following the end of the war, exports amounted to less than $7 million.

Cotton Production After the Civil War

Though the war ended the use of enslaved labor in the cotton industry, cotton was still the preferred crop in the South. The system of sharecropping, in which farmers did not own the land but worked it for a portion of the profits, came into widespread use. And the most common crop in the sharecropping system was cotton.

In the later decades of the 19th-century prices of cotton dropped, and that contributed to the severe poverty throughout much of the South. The reliance upon cotton, which had been so profitable earlier in the century, proved to be a severe problem by the 1880s and 1890s.

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McNamara, Robert. "King Cotton and the Economy of the Old South." ThoughtCo. https://www.thoughtco.com/king-cotton-1773328 (accessed December 21, 2022).

If slavery was the corner stone of the Confederacy, cotton was its foundation. At home its social and economic institutions rested upon cotton; abroad its diplomacy centered around the well-known dependence of Europe…upon an uninterrupted supply of cotton from the southern states.

Frank L. Owsley Jr.

On the eve of the American Civil War in the mid-1800s cotton was America’s leading export, and raw cotton was essential for the economy of Europe. The cotton industry was one of the world’s largest industries, and most of the world supply of cotton came from the American South. This industry, fueled by the labor of enslaved people on plantations, generated huge sums of money for the United States and influenced the nation’s ability to borrow money in a global market. In many respects, cotton’s financial and political influence in the 19th century can be compared to that of the oil industry in the early 21st century.

Mississippi, the nation’s largest cotton-producing state, was economically and politically dependent on cotton, as was the entire South. Indeed, it was the South’s economic backbone. When the southern states seceded from the United States to form the Confederate States of America in 1861, they used cotton to provide revenue for its government, arms for its military, and the economic power for a diplomatic strategy for the fledgling Confederate nation.

King Cotton diplomacy

The diplomatic strategy was designed to coerce Great Britain, the most powerful nation in the world, into an alliance with the Confederacy by cutting off the supply of cotton, Britain’s essential raw material for its dominant textile industry. Before the American Civil War, cotton produced in the American South had accounted for 77 percent of the 800 million pounds of cotton used in Great Britain. After Britain had officially declared its neutrality in the American war in May 1861, the president of the Confederacy, Jefferson Davis – a Mississippi planter, Secretary of War under U.S. President Franklin Pierce, and former U. S. senator – strongly supported what became known as King Cotton diplomacy. Confederate leaders believed an informal embargo on cotton would lead Great Britain into formal recognition of the Confederacy and to diplomatic intervention with other European countries on behalf of the South.

To begin King Cotton diplomacy, some 2.5 million bales of cotton were burned in the South to create a cotton shortage. Indeed, the number of southern cotton bales exported to Europe dropped from 3 million bales in 1860 to mere thousands. The South, however, had made a pivotal miscalculation. Southern states had exported bumper crops throughout the late 1850s and in 1860, and as a result, Great Britain had a surplus of cotton. Too, apprehension over a possible conflict in America had caused the British to accumulate an inventory of one million bales of cotton prior to the Civil War. The cotton surplus delayed the “cotton famine” and the crippling of the British textile industry until late 1862. But when the cotton famine did come, it quickly transformed the global economy. The price of cotton soared from 10 cents a pound in 1860 to $1.89 a pound in 1863-1864. Meanwhile, the British had turned to other countries that could supply cotton, such as India, Egypt, and Brazil, and had urged them to increase their cotton production. Although the cotton embargo failed, Britain would become an economic trading partner.

Weapons, ammunition and ships

The failure of King Cotton diplomacy was merely a tactical blunder with no reflection on the power of cotton. The imaginative and brilliant financing of the cotton-backed Erlanger bond, launched in Europe in March 1863, epitomized the potential of cotton credit. The Erlanger bond, named after the powerful French banking house Erlanger & Cie., was a dual currency, one commodity bond. Through it the Confederate States of America attempted to borrow 3 million pound sterling or 75 million French francs for 20 years, priced at 7 percent. Investors could receive coupon and principal payments in either pound sterling or French francs, and were given the additional option of taking payment in cotton at a fixed price. The high-risk Erlanger bond was oversubscribed, and the price fell within a few months. The Erlanger bond quickly became one of history’s most important junk bonds.

Nonetheless, the Confederacy was able to use cotton as a bartering tool to fund the purchase of weapons, ammunition, and ships from British manufacturers. The transport of the armaments to the Confederacy was made possible by the lucrative cotton trade that tempted blockade-runners to pierce the Union blockade for potential profits of 300 percent to 500 percent per voyage. U.S. President Abraham Lincoln had declared a naval blockade on the Confederacy in April 1861 to prevent its shipments of cotton to European powers. The blockade covered the seaports along the southern Atlantic coast below Washington, D.C., and extended along the Gulf coast to the Mexican border. The blockade-runners would offload cotton at the British islands of Nassau and Bermuda off the Confederate coast in exchange for armaments. Although the Union increased its number of blockaders, especially steam vessels, their effectiveness was hampered by the lack of coal and maintenance problems. It was the Union capture of southern ports, more than the blockade, that reduced the Confederate cotton-armaments trade. The last port, Wilmington, North Carolina, was taken in January 1865.

Lieutenant Colonel J. W. Mallet, a Confederate ordnance officer, praised the armaments supplied through the blockade with “cotton in payment” as “being of incalculable value.” At the Battle of Shiloh, Confederate troops used weaponry and supplies conveyed from Great Britain by the blockade-runner Fingal. During the war, an estimated 600,000 “pieces of equipment” were supplied by the British. In his memoirs, Union General Ulysses S. Grant acknowledged the superiority of the British rifles that his forces had captured at the siege of Vicksburg. The rifles, he wrote, had “run the blockade.” British-built war ships, most notably the C.S.S. Alabama, destroyed much of the Northern merchant marine. Cotton had financed the construction of the war ships.

The lure of cotton

Cotton also spawned a series of federal regulations during the war. The North needed cotton for its textile mills, and it wanted to deprive the South of its financing power. Therefore, federal permits issued by the Treasury Department were required to purchase cotton in the Confederate states. The system was rife with corruption, particularly in the Mississippi Valley. Confederate cotton that was subject to confiscation by the North could not be distinguished from legitimate cotton grown by planters loyal to the Union. Cotton could be purchased for as little as 12 to 20 cents a pound, transported to New York for 4 cents a pound, and sold for up to $1.89 a pound. One observer noted that the “mania for sudden fortunes in cotton” meant that “Every [Union] colonel, captain, or quartermaster is in secret partnership with some operator in cotton.” The lure of cotton wealth would entice White Northern civilians and Union soldiers south during and after the war.

The future of former enslaved people remained sealed in the cotton fields. African Americans were denied economic and physical mobility by federal government policy, by the racial animosity of Northern White people, and by the enduring need for cotton labor in the South. The federal government was forced to confront the question of what to do with slave refugees and those who had escaped behind Union lines. In 1863 Union Adjutant General Lorenzo Thomas in the Mississippi Valley devised a solution, a form of containment policy, whereby freed African Americans would remain in the South. They would be used in the military service, or “placed on the abandoned [cotton] plantations to till the ground.” Those formerly enslaved were to be contracted to work on the abandoned plantations – many around Vicksburg. Labor guidelines, such as $10 a month pay and a 10-hour day, were posted. If a laborer missed two hours of work a day, he lost one-half of his day’s pay. The formerly enslaved were not allowed to leave the plantation without a pass. The White Northern lessees of the plantations were generally driven by money. As many as two-thirds of the labor force was thought to have been “defrauded of their wages in 1864.”

World’s leading cotton exporter

After the war ended in 1865, the future of cotton land remained under White southern control. Northern Republican businessmen were firmly opposed to confiscation of lands from southern plantation owners and actively supported the resumption of cotton production by means of large plantations under the management of landowners.

Therefore, the stage for Reconstruction was set. The economic importance of cotton had not diminished after the war. In fact, the federal government and northern capitalists were well aware that restoration of cotton production was critical to the financial recovery of the nation. Cotton exports were needed to help reduce the huge federal debt and to stabilize monetary affairs in order to fund economic development, particularly railroads.

America regained its sought-after position as the world’s leading producer of cotton. By 1870, sharecroppers, small farmers, and plantation owners in the American south had produced more cotton than they had in 1860, and by 1880, they exported more cotton than they had in 1860. For 134 years, from 1803 to 1937, America was the world’s leading cotton exporter.

Historian Harold D. Woodman summarized the stature of cotton, “If the war had proved that King Cotton’s power was far from absolute, it did not topple him from his throne, and many found it advantageous to serve him.”

Eugene R. Dattel is an economic historian, and the author of a previous article for Mississippi History Now, Cotton in a Global Economy: Mississippi, 1800-1860.

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  A drawing from the February 15, 1862, edition of Frank Leslie's Illustrated Newspaper, depicts the "picking, ginning, and shipping" of cotton. Courtesy the Library of Congress Print and Photographs Division, LC-USZ62-116585.

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  The cotton-backed Erlanger Bond epitomized the potential of cotton credit. The high-risk bond quickly became one of history's most important junk bonds. Image courtesy Eugene R. Dattel.

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  Drawing of a shipment of cotton at Savannah, Georgia, headed for New York, on the account of the U.S. government. Illustration from the February 25, 1865, edition of Frank Leslie's Illustrated Newspaper. Courtesy the Library of Congress Prints and Photographs Division, LC-USZ62-116353.

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  1864 lithograph equally critical of European help in the Confederate war effort and of the anti-Lincoln, or pacifist movement, in the North. Courtesy Library of Congress Prints and Photographs Division, LC-USZ62-177728.

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  Bales of cotton wait on the levee at New Orleans for shipment overseas, circa 1903. Courtesy the Library of Congress Prints and Photographs Division, LC-USZ62-64713.

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  For 134 years, from 1803 to 1937, America was the world's leading cotton exporter. Here, a truck loaded with bales of cotton travels on U.S. Highway 49 near Clarksdale, Mississippi, in the 1930s. Courtesy the Library of Congress Prints and Photographs Division, LC-USF34-052470-D.

Sources:

Books

Beringer, Richard E., Herman Hattaway, Archer Jones, and William N. Still. Why the South Lost the Civil War. Athens, Ga.: University of Georgia Press, 1986.

Cohn, David L. The Life and Times of King Cotton. New York: Oxford University Press, 1956.

Currie, James T. Enclave: Vicksburg and Her Plantations, 1863-1870. Jackson, Miss.: University Press of Mississippi, 1980.

Hesseltine, William B., ed. The Tragic Conflict: The Civil War and Reconstruction. New York: George Braziller, 1962.

Jaynes, Gerald David. Branches Without Roots: Genesis of the Black Working Class in the American South, 1862-1882. New York: Oxford University Press, 1986.

Monaghan, Jay. Diplomat in Carpet Slippers – Abraham Lincoln Deals With Foreign Affairs. Lincoln, Neb.: University of Nebraska Press, 1997.

Lester, Richard I. Confederate Finance and Purchasing in Great Britain. Charlottesville, Va.: University Press of Virginia, 1975.

Owsley Jr., Frank L. King Cotton Diplomacy: Foreign Relations of The Confederate States of America. Chicago: The University of Chicago Press, 1959.

Powell, Lawrence N. New Masters: Northern Planters During the Civil War and Reconstruction. New Haven: Yale University Press, 1980.

Voegeli, V. Jacque. Free But Not Equal: The Midwest and the Negro During the Civil War. Chicago: The University of Chicago Press, 1969.

Woodman, Harold D. King Cotton and His Retainers: Financing and Marketing the Cotton Crop of the South, 1800-1925. Columbia, S.C.: University of South Carolina Press, 1990.

Articles:

Beckert, Sven. “Emancipation and Empire: Reconstructing the Worldwide Web of Cotton Production in the Age of the American Civil War.” The American Historical Review, Vol. 109, Issue 5, (December 2004) 1405-1438.

Dattel, Eugene R. “Southern Hospitality,” The International Economy, (March/April 1997) 52-55.

Mallett, J. W. “The Work of the Ordnance Bureau,” Southern Historical Society Papers, Vol. 37. Richmond, Va., 1909.

Ross, Stephen Joseph. “Freed Soil, Freed Labour, Freed Men: John Eaton and the Davis Bend Experiment.” The Journal of Southern History, Vol. 44, No. 2., (May 1978).

Slay, David. “Abraham Lincoln and the United States Colored Troops of Mississippi.” The Journal of Mississippi History, Volume LXX, No. 1, (Spring 2008) 67-86.

Smith, John David. “The Enduring Myth of ‘Forty Acres and a Mule.’” The Chronicle Review, Volume 49, Issue 24. (February 21, 2003).

What contributed to the growth of King Cotton?

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