Eli Whitney, inventor of the Cotton Gin
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King Cotton Diplomacy
When the Civil War broke out, the Union established a blockade of major southern ports, which seriously limited its imports and exports. This was part of U.S. Army General Winfield Scott's larger Anaconda Plan to subdue the southern states. However, the South thought it had an ace in its sleeve with cotton. Two years before, South Carolina Senator James Hammond declared to New York Senator William Seward, 'No, you dare not make war on cotton! No power on earth dares make war upon it. Cotton is King!' The Confederacy wanted the blockade busted up, and it reasoned that winning international diplomatic recognition was essential for achieving independence. The hope was that if England or France got involved, it would include breaking up the Union blockade.
South Carolina Senator James Hammond
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Southern Blackmail
To add more leverage, the South began intentionally withholding cotton exports. Even though the Union blockaded southern ports, the blockade was never completely effective, and ships sometimes slipped through the wall of Union ships. The general assumption about cotton diplomacy was that cotton was such a valuable commodity that it could be leveraged for diplomatic recognition. The hope was that since Europe needed Southern cotton so much, it would have no choice but to intervene on the side of the Confederacy. The Confederate president, Jefferson Davis strongly supported this strategy, which basically amounted to blackmailing Europe into extending diplomatic recognition. In fact, an estimated 2.5 million bales of cotton were torched in the South to create an intentional shortage. With a forced shortage, cotton prices spiked to unprecedented levels in global markets. Davis assumed that even if foreign governments held out, textiles businesses would demand Confederate recognition. He was not far off the mark here; by late 1862, English textile industries were short of cotton.
Confederate President Jefferson Davis
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European Response
Beginning in February 1861 and continuing throughout the course of the war, the Confederacy began sending its own diplomats to Europe to meet with high-ranking officials, including the British Prime Minister Lord Palmerston and French Emperor Napoleon III, to negotiate for European assistance. The idea was not unthinkable; British business interests wanted the government to negotiate for cotton. For humanitarian reasons, however, both the British and French were shocked at the horror of the war and offered several times to mediate a resolution. It was fruitless though, as President Lincoln rebuffed any outside interference in what he considered a domestic matter, and the Confederacy would accept nothing short of complete independence, which the Union would never concede to.
Confederate Diplomat William Lowndes Yancey attempted to negotiate a deal with France and Britain
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The Failure of Cotton Diplomacy
There were two factors working against European intervention. First was the issue of slavery. Great Britain had freed its slaves in 1833 and had become the global leader in suppressing the African slave trade. France had done so in 1848. To suddenly extend diplomatic recognition to the largest slave-holding nation in the western world was unthinkable. The second was that Great Britain had an overabundance of cotton stored in warehouses - ironically due to high southern yields beginning in 1858. England estimated that it could hold out for more than one year without buying new cotton. A related factor was that Great Britain had the advantage of tapping into its global empire. Great Britain had also invested large sums into cotton production in its colonies in Egypt and India, which shortchanged its need for Southern cotton.
British Prime Minister Lord Palmerston
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Cotton for Weapons
The South was at a crossroads with its own policy. It assumed it could finance the war through the sale of cotton, but by withholding it, it undermined its own financial plan. The assumption that Europe would cave in was mistaken, and thus the South became the cause of its own financial undoing. Its fatal flaw was putting too much faith in a single strategy. In 1863, the Confederate government shifted course and began blockade running - evading the naval blockade and selling the cotton directly to European markets in exchange for the purchase of weapons, supplies, gunpowder, foodstuffs, and even warships built in England. Though England and France wanted to stay neutral, they were still willing to profit from southern trade.
Map of the Anaconda Plan to subdue the seceding states
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Lesson Summary
King Cotton Diplomacy was rooted in the assumption that cotton was such a valuable commodity that withholding it from Europe would force European countries to extend diplomatic recognition to prevent their own economic ruin. However, this plan suffered from two fatal flaws. First, the British had an oversupply of cotton built up from previous years of accumulation and did not immediately feel the effects of a cotton shortage. Second, the British and French had both emancipated their slaves and were unwilling to support the slave-holding South. Furthermore, the British began investing in cotton production in India and Egypt, thus circumventing southern markets. In time, the South, badly in need of assistance, began running ships through the blockade to trade cotton for weapons and supplies.
