Cotton diplomacy
Encyclopedia
During the 1850s and the American Civil War
, cotton diplomacy was the idea that Britain and France required cotton from the South (see King Cotton
). However, the Confederate States of America
significantly overestimated the leverage that the cotton trade would give them.
In 1861 Southern economists and oligarchs realized that with a blockade of southern ports
they would be unable to compete with the north economically. Once they saw that a long war was unavoidable, and that the limited population of the South could not support a fully mobilized army, they made the decision in 1861 to embargo cotton exports. Cotton was then warehoused and used to prop up Confederate war bonds, which were then sold in Europe.
This embargo was effective at first, creating an instant source of income from the valuable cotton backed bonds, shutting down hundreds of textile factories, and putting thousands of people in Europe out of work, but the embargo became a disaster for the Confederacy when the British did not cave in to their demands, choosing instead to import cotton from Egypt and India in 1862.
The opening of these new markets caused the price of cotton to stabilize quickly, and by 1863 the Southern economy, which was completely tied to the price of cotton, had crashed, crippling the South's ability to secure any kind of alliance, or purchase badly needed war supplies.
This idea, known as a self-embargo
,was also used by President Jefferson in his Embargo Act of 1807
, and was similarly ignored during the Napoleonic wars in Europe.
American Civil War
The American Civil War was a civil war fought in the United States of America. In response to the election of Abraham Lincoln as President of the United States, 11 southern slave states declared their secession from the United States and formed the Confederate States of America ; the other 25...
, cotton diplomacy was the idea that Britain and France required cotton from the South (see King Cotton
King Cotton
King Cotton was a slogan used by southerners to support secession from the United States by arguing cotton exports would make an independent Confederacy economically prosperous, and—more important—would force Great Britain and France to support the Confederacy because their industrial economy...
). However, the Confederate States of America
Confederate States of America
The Confederate States of America was a government set up from 1861 to 1865 by 11 Southern slave states of the United States of America that had declared their secession from the U.S...
significantly overestimated the leverage that the cotton trade would give them.
In 1861 Southern economists and oligarchs realized that with a blockade of southern ports
Union blockade
The Union Blockade, or the Blockade of the South, took place between 1861 and 1865, during the American Civil War, when the Union Navy maintained a strenuous effort on the Atlantic and Gulf Coast of the Confederate States of America designed to prevent the passage of trade goods, supplies, and arms...
they would be unable to compete with the north economically. Once they saw that a long war was unavoidable, and that the limited population of the South could not support a fully mobilized army, they made the decision in 1861 to embargo cotton exports. Cotton was then warehoused and used to prop up Confederate war bonds, which were then sold in Europe.
This embargo was effective at first, creating an instant source of income from the valuable cotton backed bonds, shutting down hundreds of textile factories, and putting thousands of people in Europe out of work, but the embargo became a disaster for the Confederacy when the British did not cave in to their demands, choosing instead to import cotton from Egypt and India in 1862.
The opening of these new markets caused the price of cotton to stabilize quickly, and by 1863 the Southern economy, which was completely tied to the price of cotton, had crashed, crippling the South's ability to secure any kind of alliance, or purchase badly needed war supplies.
This idea, known as a self-embargo
Embargo
An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is...
,was also used by President Jefferson in his Embargo Act of 1807
Embargo Act of 1807
The Embargo Act of 1807 and the subsequent Nonintercourse Acts were American laws restricting American ships from engaging in foreign trade between the years of 1807 and 1812. The Acts were diplomatic responses by presidents Thomas Jefferson and James Madison designed to protect American interests...
, and was similarly ignored during the Napoleonic wars in Europe.