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What was the effect of the Civil War on the cost of cotton?

What was the effect of the Civil War on the cost of cotton?

If you look at contemporary sources discussing slavery as practiced in the antebellum American South, a couple recurring themes pop up again and again:

  1. Cotton. Cotton farming requires large amounts of unskilled labor, making it a perfect fit (if you disregard the moral implications, of course!) for plantation-style slave labor.
  2. Economics. Today we often view slavery through the lens of racism, but that appears to have been more of a justification than a motivation for Southern slave owners; the motivation was that it was just "good business," and the primary argument against ending slavery was not that the African race deserved it or anything of that nature, but rather that doing away with it would bring great financial harm upon the producers of cotton, which was one of the South's primary trade goods. (In fact, if you update the vocabulary a bit, the historical arguments sound surprisingly modern, largely boiling down to "if you make us pay our workers well and treat them with the respect and dignity that human beings deserve, it will DESTROY OUR ECONOMY!!!" Which will sound quite familiar to anyone keeping up with today's politics in America.)

Contemporary economics warns us that if you make goods significantly more expensive to produce, the costs will be passed on to consumers in the form of higher prices. So that makes me wonder: what data do we have available on the effects of the Civil War, and particularly the liberation of the slaves, on the price of cotton? How big of a difference did it actually make?

EDIT: To be clear, I'm looking for price data before and after the war. According to this article linked to in the comments, cotton prices in Great Britain "soared from 10 cents a pound in 1860 to $1.89 a pound in 1863-1864," but that was the direct result of price manipulation on the Confederacy's part in order to twist Great Britain's arm, so that's not particularly useful as a price point. What would be very helpful would be data on cotton prices in Great Britain after the war ended and things started to get back to normal. (Or establish a "new normal," as the case may be.)


While it is true that the war had a profound effect on cotton prices in Great Britain - and the rest of the world - it is much too simple to look at the prices in Liverpool to back-calculate what the effect of slavery on cotton prices was.

The price was during the war mainly affected by trade not taking place. The blockade was effective. And after the war the basis of Southern cotton, the plantation system had to be completely re-organised or better replaced. Two quite disruptive factors that add onto the variable "slave-labour or not".

The American South was not the only place where cotton was grown and all the factors at play in Dixie helped to ensure the dominance of the product on the world wide market. While the war had steep raises in price as a consequence at first - and prices remained high after that - it also jump started cotton production elsewhere. And elsewhere in conditions not that much better than for those producing it in the South. This was a stone in the pond whose ripples caused a multitude of pork cycles.

The main effect of the war, and one of the main efforts the Northern Union made, in unison with all the cotton merchants around the world, is encouraging the cultivation of cotton in Africa and Asia.

First, cotton experts reckoned that enough cotton could be procured to permit cotton manufacturing to continue its dramatic expansion even without slavery. This was, for example, the judgment of the English Ladies' Free Grown Cotton movement, a loose association of women who committed themselves to purchasing only cloth produced with free labor cotton. And, perhaps most optimistically, it was embraced by Republicans in the United States such as Edward Atkinson, who believed that cotton production in the American South could be expanded dramatically through the use of "free labor"- that is, as long as freedpeople would not engage in subsistence agriculture.

Yet the Civil War experience also had shown that non-slave cotton had entered world markets only under conditions of unsustainable high prices; after all, the price of Indian cotton had quadrupled and earlier efforts to bring Indian cotton to market at lower prices had largely failed. Moreover, from the perspective of 1864 and 1865, emancipation was leading to dangerous social turmoil in the American South. It was thus reasonable to expect that freedom would bring a permanent reduction in the supplies of raw cotton-an expectation expressed most directly by the fact that postbellum cotton prices (for American middling in Liverpool) remained for ten years well above their prewar level.

Despite this uncertainty, the wartime rehearsals for reconstruction provided cotton capitalists and government bureaucrats with important insights into how the growing of cotton for world markets might be resurrected. Most importantly, they learned that labor, not land, constrained the production of cotton. Members of the Manchester Cotton Supply Association, the world's leading experts on such matters, argued already during the war that three things were necessary for successful cotton cultivation: "soil and climate fit for the growth of cotton"-and labor. They understood that land and climate of a "quality equal, and in many cases superior, to that" of America was available in many different parts of the globe. But these experts on global cotton found that "only two regions" possessed "the very first requisite, which was labor"- West Africa and India.

Out of these failures an entirely different system of labor control was born: unlike in sugar production, which, after emancipation, relied to an important extent on indentured laborers, cotton would be grown by cultivators who would work their own or rented land with the input of family labor and metropolitan capital. Sharecropping, crop liens, and powerful local merchants in control of capital characterized the countryside in which they lived. These cotton farmers, the world over, were deeply enmeshed in debt, vulnerable to world market fluctuations, generally poor, subject to newly created vagrancy statutes and labor contracts designed to keep them on the land, and politically marginalized. They were often subject to extra-economic coercion. These were the people who would grow ever-larger amounts of cotton in the new empire of cotton, from India to Central Asia, from Egypt to the United States.

Sven Beckert: "Empire of Cotton: A Global History", Knopf: New York, 2014. (Partially online: PDF )

Slave labour is cheap, but not that much cheaper than slave-like labour that can be extracted from other people considered free in most definitions of that word.

The wage form thus extinguishes every trace of the division of the working-day into necessary labour and surplus-labour, into paid and unpaid labour. All labour appears as paid labour. In the corvée, the labour of the worker for himself, and his compulsory labour for his lord, differ in space and time in the clearest possible way. In slave labour, even that part of the working-day in which the slave is only replacing the value of his own means of existence, in which, therefore, in fact, he works for himself alone, appears as labour for his master. All the slave's labour appears as unpaid labour. In wage labour, on the contrary, even surplus-labour, or unpaid labour, appears as paid. There the property-relation conceals the labour of the slave for himself; here the money-relation conceals the unrequited labour of the wage labourer. Karl Marx. Capital Volume One, Part VI: Wages, Chapter Nineteen: The Transformation of the Value (and Respective Price) of Labour-Power into Wages.

On cotton Marx had this astute observation:

The cultivation of the southern export articles, cotton, tobacco, sugar , etc., carried on by slaves, is only remunerative as long as it is conducted with large gangs of slaves, on a mass scale and on wide expanses of a naturally fertile soil, which requires only simple labour. futensive cultivation, which depends less on fertility of the soil than on investment of capital, intelligence and energy oflabour, is contrary to the nature of slavery. Hence the rapid transformation of states like Maryland and Virginia, which formerly employed slaves on the production o f export articles, into states which raise slaves to export them into the deep South. Even in South Carolina, where the slaves form four-sevenths of the population, the cultivation of cotton has been almost completely stationary for years due to the exhaustion of the soil. Indeed, by force of circumstances South Carolina has already been transformed in part into a slave-raising state, since it already sells slaves to the sum of four million dollars yearly to the states of the extreme South and South-west. As soon as this point is reached, the acquisition of new Territories becomes necessary, so that one section of the slaveholders with their slaves may occupy new fertile lands and that a new market for slave-raising, therefore for the sale of slaves, may be created for the remaining section. It is, for example, indubitable that without the acquisition of Louisiana, Missouri and Arkansas by the United States, slavery in Virginia and Maryland would have been wiped out long ago. In the Secessionist Congress at Montgomery, Senator Toombs, one of the spokesmen of the South, strikingly formulated the economic law that commands the constant expansion of the territory of slavery. "In fifteen years," said he, "without a great increase in slave territory, either the slaves must be permitted to flee from the whites, or the whites must flee from the slaves."

Karl Marx: "Der nordamerikanische Bürgerkrieg", London, 20. Oktober 1861, English translation from "Marx on Slavery and the U.S. Civil War"

And it is just like now, capital will move if it finds conditions that are favourable.

The reason for the continued extensive use of forward selling in the years following the American Civil War was the difficult market conditions which Liverpool cotton merchants faced. From the end of the American Civil War and into the 1870s, the international price of cotton steadily fell. This was because of the recovery of the United States after the disruption of the war to its previous level of cotton production. Gradually, year on year, the United States recovered a little more, supplies of cotton increased, and prices fell. Merchants importing cotton were therefore at serious and prolonged risk of the value of their cotton stock falling between the date they purchased it in the United States and when they came to sell it in the Liverpool market. The Liverpool merchant Thomas Bower Forwood warned his son, William Bower Forwood, in August 1866: 'the most dangerous trade you can go into is cotton, and it will be so for years to come'.

Nigel Hall: "The Liverpool Cotton Market: Britain's First Futures Market",

For these complicated matters, remember the pork cycle, the Lancashire Cotton Famine.

The reasoning from the question, "if you make us pay our workers well and treat them with the respect and dignity that human beings deserve, it will DESTROY OUR ECONOMY!!!", is indeed the guiding principle of all local capitalists as they spin their narrative into the public mind. It is our economy that will go down, relatively, compared to other economies. A good old rat-race to the bottom.

Only that it is the cotton industry in the American South that also disproves this theory on a certain level. After slavery was abolished in America, the cotton industry re-entered the world market. Cotton remained a key crop in the Southern economy after emancipation and the end of the Civil War in 1865. As shown above prices remained high, because of the war, then came down despite no formal slavery. And the US is still the third biggest producer today.


Cotton in a Global Economy: Mississippi (1800-1860)

To the world, Mississippi was the epicenter of the cotton production phenomenon during the first half of the 19th century. The state was swept along by the global economic force created by its cotton production, the demand by cotton textile manufacturing in Europe, and New York’s financial and commercial dealings. Mississippi did not exist in a vacuum. So, in a sense, Faulkner’s words could be reversed: “To understand Mississippi, you have to understand the world.”

Mississippi’s social and economic histories in early statehood were driven by cotton and slave labor, and the two became intertwined in America. Cotton was a labor-intensive business, and the large number of workers required to grow and harvest cotton came from slave labor until the end of the American Civil War. Cotton was dependent on slavery and slavery was, to a large extent, dependent on cotton. After emancipation, African Americans were still identified with cotton production.


How the Cotton Gin Started the Civil War

Designing a new machine or improving a process can take a fair amount of thought and consideration once prototyped, it can still take years or even decades to be commercialized and have an impact on society. Sometimes, however, the entire process can be marvelously quick, easy, and world-changing.

Take, for example, the cotton gin.

Eli Whitney conceived this device almost on the spur of the moment. Yet, for all its fame and historic significance, one rarely sees an illustration of this legendary machine. Knowing as much as we do about its reputation and being conditioned to expect a revelation, when present-day engineers see the primitive hardware of the machine, it&rsquos usually a bit of a letdown. Although simple in design, the cotton gin solved a pressing economic problem and transformed both agricultural and industrial America. Only after comparing the economy of the American South before and after the introduction of the gin can we appreciate its historic impact.

A simple mechanism with complex consequences, the cotton gin, shown as it appeared in Eli Whitney&rsquos patent and on the previous page in a perspective drawing, changed the economics of the South and set a course to the Civil War. Keeping Cotton Lucrative

Before the cotton gin, slavery had been on its way out&mdashfarmers realized it was more expensive to maintain slaves, compared to the value of what they could produce. Cotton was a troublesome crop anyway its fiber could only be separated from the sticky, embedded seeds by hand, a grueling and exhausting process.

This changed dramatically, of course, with the advent of the cotton gin. Suddenly cotton became a lucrative crop and a major export for the South. However, because of this increased demand, many more slaves were needed to grow cotton and harvest the fields. Slave ownership became a fiery national issue and eventually led to the Civil War.

It was only a matter of chance that Whitney became involved with cotton growing. After graduating from Yale University in 1792 with hopes of becoming a lawyer, he traveled to South Carolina to accept a job as a tutor. His landlady owned a plantation and raised some cotton. After getting into a discussion with several plantation owners about the fact there was no economical method of separating seeds from cotton fiber, Whitney recognized it could be done mechanically.

He spent the next few months building a prototype. The gin itself comprised a rotating drum with wire hooks or ratchet-like teeth that pulled cotton fibers between the teeth of a comb. The comb had teeth spaced too closely for seeds to pass through. Only one aspect of the machine can be regarded as serious mechanisms design. A second drum, rotating faster than the first and carrying brushes, served to dislodge the cotton fibers from the first. This was driven, along with the larger drum, by a belt-and-pulley arrangement typically having a four-to-one ratio. Cotton bolls were loaded into a hopper, which guided them to the face of the comb. After being pulled through by the toothed cylinder, the separated cotton fibers emerged at the left and the seeds collected to the right.

Whitney's design was almost immediately stolen and counterfeited a vast number of times. After years of patent litigation he received only a tiny fraction of the wealth to which he was entitled. He continued to invent. Ten years later, because of his reputation as an innovator, he won a government contract to produce 10,000 muskets&mdasha previously unheard-of number. To manufacture the gun locks, Whitney invented the milling machine that is the staple of machine shop production today.

Although Whitney&rsquos invention only involved a few hundred kilograms of matter, it shaped the future of a nation and its people it is rare that a single contrivance has such a profound social effect.

[Adapted from &ldquoA Turn of the Crank Started the Civil War&rdquo by Robert O. Woods, ASME Fellow, for Mechanical Engineering, September 2009.]

Only after comparing the economy of the American South before and after the introduction of the gin can we appreciate its historic impact.


Cotton

At the time of the Civil War, cotton had become the most valuable crop of the South and comprised 59% of the exports from the United States. As a result, it played a vital role in the conflict. For southern producers, the war disrupted both the producing and the marketing of what they hoped would be the financial basis of their new nation. As Confederate territory shrank under Union attack, invasion, and occupation, the traditional patterns of cotton cultivation and sales likewise came under assault. Blockading southern ports and encroaching into the major cotton-growing areas, the Union stalled not only the cotton economy but also the foreign relations of the Confederacy. As state after state across the South joined the Confederate States of America, the new nation’s foreign relations relied on what came to be known as cotton diplomacy. Planters and the Confederate leaders believed that cotton shortages would secure full diplomatic recognition and possibly aid from European consumers of their produce. Chief among these was Great Britain, which consumed most of the output of the fiber in the textile mills of the Industrial Revolution. In order to starve the world of cotton. Believing in the power of King Cotton, the Confederates placed an embargo on cotton exports in the summer of 1861. By the time Davis lifted the embargo, it was too late the Union navy had blockaded Confederate ports. The blockade, begun in 1861, was never perfect. It did not entirely prevent cotton from leaving the South but it did hobble export activities and made cotton sales risky and unpredictable. British manufacturers sought other supplies. The shortfall in shipments from America stimulated cotton production in India, Egypt, and Brazil, which all increased their production in order to meet British demands. The Union army’s presence in Memphis and New Orleans by 1862 brought the cotton market back to life with cotton being sold across enemy line to factories in the North and in England. This unofficial trade continued throughout the rest of the war. The end of the war brought a long period of time before cotton production in the south recovered from the loss of slaves, the destruction wrought by the war and the new suppliers in India and elsewhere.

At the time of the Civil War, cotton had become the most valuable crop of the South and comprised 59% of the exports from the United States. As a result, it played a vital role in the conflict. For southern producers, the war disrupted both the producing and the marketing of what they hoped would be the financial basis of their new nation. As Confederate territory shrank under Union attack, invasion, and occupation, the traditional patterns of cotton cultivation and sales likewise came under assault. Blockading southern ports and encroaching into the major cotton-growing areas, the Union stalled not only the cotton economy but also the foreign relations of the Confederacy. As cotton was the main crop of the plantation system and the linchpin of slavery’s profitability, it was also the major export of the United States as a whole and the raw material of the northern industrialization.

Cotton is cellulose, a fluffy fiber that develops inside the boll or seed-pod of Gossypium plants. The fiber is attached to the plant’s seeds— when the boll opens the fuzz will catch the wind and carry the seeds away to propagate the plant. When grown for human purposes, cultivation of the fiber requires heavy soils and sunshine, a long 175 to 225 days without frost, and 24 to 47 inches of rainfall per year. The fiber has been cultivated in temperate, tropical, and subtropical regions around the world and can flourish between the 30° and 37° latitudes. These lines run roughly through New Orleans on the Gulf of Mexico and the northern tip of Virginia, making the U.S. South an ideal location to cultivate the plant in order to produce its fiber, which is used extensively in the production of cloth. Planters from Barbados brought Gossypium barbadense to the Sea Islands of South Carolina and Georgia about 1786, and their slaves induced the plant to grow the long silky fiber that became known as Sea Island cotton. The more common Upland cotton, Gossypium hirsutum, includes a number of cross-bred types that make a shorter, coarser staple but are more tolerant of a wider range of growing conditions. [1] In the United States 95% of cotton produced today is an Upland type worldwide, Upland types produce about 90% of all cotton fiber.

Cultivation of cotton in North America began in the 1780s shortly after American independence and demand increased with the British industrial revolution in cotton manufacturing. While Eli Whitney’s cotton gin generally receives credit for the increase in cotton supply, it was just one of many competing designs for removing seeds from fiber and itself tended to rip the staple. The British, who had first imported cotton textiles from India, eventually found the fiber a useful filler in their traditional linen and woolen cloths. Yet, as textile industrialization gained steam in the early nineteenth century, the Napoleonic Wars interrupted British manufacturers’ usual sources of supply from Asia. For this reason, they began importing cotton from their former colonies, and learned to cope with the short-staple Upland fiber ripped in Whitney-style gins. As a result, planters found the new crop profitable and aimed to expand its cultivation. Their desire for more room to grow cotton inspired the U.S. government to remove Native Americans from their lands, to sell the newly acquired territories, and to admit new states to the Union, all in order to ensure the planters’ economic stability and political representation in the federal government. The purchase of French Louisiana in 1803 provided even more land as well as the Mississippi River for shipping crops down the river to the sea. The plantation system of production spread across Georgia and into Alabama, Mississippi, Arkansas and Louisiana, reaching Mexican Texas in the 1830s. The South committed ever more deeply to plantations with populations of slaves growing cotton for the textile mills of England and New England.

Southern-grown cotton was sold to manufacturers by cotton factors (the local merchants who represented distant buyers), who were based in the major port cities of the South and handled most business transactions for planters. The planters sent their cotton to the factors, and the factors found the best place and time to sell it, earning a commission, usually 2.5%, on the sale of the planter’s cotton. Factors also bought plantation supplies—food, bagging, tools, shoes, clothing, and so on—and forwarded them on to the planters, taking another commission from these transactions. These relations between planters and factors were remarkably informal, with few written contracts and surprisingly few legal disputes it worked because of the mutual trust developed between individual planters and individual factors over time. This system would not survive the coming crisis.

By that time, however, the Union controlled both Memphis and New Orleans, two of the most important cotton marketing centers. The Union army’s presence bought the cotton market back to life as cotton managed to get across enemy lines. Planters in much of the Confederacy’s prime cotton land had the chance to sell the cotton they had been hoarding. Merchants in those cities sent agents into the countryside, paying in gold or greenbacks. Planters who could only get Confederate money or bonds sometimes tried to invest it in something more substantial, including land. While the revived cotton market benefited the Union and individual southern planters, it did no good for the Confederacy itself. Confederate planters were far more interested in realizing profits from their bales of cotton than using them to support the Confederate war effort.

This unofficial market for the fiber continued through the war. In 1864 the Mississippi Central Railroad was granted the right to trade cotton for essential supplies, and the railroad became a way of shipping cotton through enemy lines. Memphis, Nashville, Vicksburg, and New Orleans became sites of roaring trade, and both Union and Confederate army officers scrambled for profits. Planters who had been hoarding their cotton now made high profits. By February 1865 the Confederate War Department relied on this exchange of cotton for blankets and shoes. Of the 900,000 bales imported into Boston and New York during the war, 400,000 bales came through the lines, while 350,000 were captured by the Union (at Savannah, Memphis, the Sea Islands, and New Orleans), while the remaining 150,000 bales were shipped back from England.

Not only was Confederate-grown cotton finding its way back onto the market by 1862, but northerners came south to grow cotton themselves. The earliest of these were inspired to do so in order to help the freed people and to demonstrate to the nation that cotton grown by free labor would be produced even more efficiently than when grown by enslaved labor. Later planters came down out of more pecuniary and less idealistic motivations, hoping to cash in on high cotton prices, with no particular regard for those who planted, hoed, and picked the cotton. The first northern planters arrived on the rich lands around Port Royal, South Carolina, in time for the 1862 planting season. This was the land where the valuable long-staple Sea Island cotton was grown. Plantation owners had fled the area, taking as many of their slaves as they could, when the Union captured it in November 1861. The plantations they abandoned were forfeited and sold. Some of the land went to freed slaves, divided up into small farms, but many plantations were purchased by northern speculators as well.

Later, the Union army in the western theater captured the rich cotton lands of the Mississippi and Yazoo Delta. Not much of this land was cleared, but what was cleared was the most productive cotton land in the world. As with Port Royal, planters had fled, leaving many of their slaves behind to fend for themselves. There was also a Union experiment at Davis Bend, the Mississippi River plantation that had belonged to the brother of the Confederate president, to demonstrate that far from being a burden on the northern military, freed slaves could produce cotton efficiently and take care of themselves. Free people farmed over 1,000 acres of land, and not only did they provide all of their own subsistence, they also produced 130 bales of cotton and a profit of $2,500.

These experiments provided some cotton to the north, but much more was seized than cultivated directly. The Captured Property Act of 1863 authorized the U.S. Treasury to appoint agents to collect cotton seized in Confederate territory and sell it in order to fund the war effort. This chaotic system led to much fraud and conflict over the ownership of cotton throughout the South, but it did bring in nearly $30 million for the U.S. Treasury over the course of the war, including nearly $5 million from Confederate-owned cotton seized after the Confederate surrender in June 1865.

Wilmington, a port in North Carolina, finally fell to the Union in 1865. In many cities, Confederate soldiers burned their cotton as the Union army approached, though in some cases the invaders torched the stored bales. The battlegrounds of war, waged across the South, destroyed the infrastructure of cotton cultivation, including not only cotton gins but also houses, barns, and fences. Draft animals and hogs were likewise unavailable after the long conflict, and agricultural equipment had long fallen into disrepair. In such circumstances, credit was also hard to come by. Cotton growers were unable to pay their taxes or their debts, and the emancipation of the slaves demolished their capital investments in labor. The road back to full production would prove difficult, and the cotton economy of the south and the nation would never be the same.

  • [1] Staple is a term that refers to the length of the fiber and sometimes to the fiber itself.
  • [2] Map from Charles O. Paullin, Atlas of the Historical Geography of the United States (Washington D.C.: Carnegie Institution and American Geographical Society, 1932), Plate 142.
  • [3] U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1957 (Washington, D.C., 1957), 124, 302.

If you can read only one book:

Hurt, R. Douglas. Agriculture and the Confederacy: Policy, Productivity and Power in the Civil War South. Chapel Hill: University of North Carolina Press, 2015.


Contents

The 1850s had been a period of unprecedented growth for the cotton industry in Lancashire, the High Peak of Derbyshire, and north east parts of Cheshire. The region had swamped the American market with printed cottons and was speculatively exporting to India. The populations of some mill towns in the Lancashire and the surrounding region had almost doubled, the profit to capital ratio was running at more than 30 per cent and a recession was looming. When the slave-owning Southern States of America demanded secession from the United States of America and declared war in 1861, the cotton supply was interrupted at first by a Southern imposed boycott and then a Union blockade. The Confederate strategy was to force British support through an economic boycott. [2]

In 1860, there were 2,650 cotton mills in the region, employing 440,000 people who were paid in total £11,500,000 per annum. 90 per cent were adults and 56 per cent female. The mills used 300,000 hp (220,000 kW) of which 18,500 was generated by water power. The mills had 30.4 million spindles and 350,000 power looms. The industry imported 1,390,938,752 lb (620,954.800 long tons 630,919.205 t) of raw cotton a year. It exported 2.78 billion yards of cotton cloth and 197,343,655 lb (88,099.846 long tons 89,513.576 t) of twist and yarn. The total value of its exports was £32 million.

Lancashire Cheshire Derbyshire
Mills 1,920 200 25
Workers 310,000 38,000 12,000
Country Imports (lb) [a]
America 1,115,890,608
East Indies 204,141,168
West Indies 1,630,784
Brazil 17,286,864
Other 52,569,328

Unsold cloth had been building up in the warehouses in Bombay (Mumbai) production had exceeded demand and short time working was inevitable. As indications came that trouble was possible, the American growers hurried to export their crop early. Almost enough of the 1861 crop reached Liverpool to supply the mills. Middling Orleans, the type of cotton that was used to gauge the prices, was selling for 7 + 3 ⁄ 4 d a pound in June 1861. [4]

Sea Island (also known as extra long staple), grown on the islands off the Carolina coast of America, was the best quality cotton Egyptian — the name given to Sea Island cotton that had been introduced into Egypt — was the second best grade. The most common grades were the short staple American cottons which included Middling Orleans it was these grades that were used by the majority of Lancashire's calico producers. The Surat cottons from India were the least suitable for machinery and were only ever used as a small percentage of a mixture as the fibres were short and broke easily. [8] [9] Surat came in smaller bales which contained stones and other impurities. Each town in Lancashire used different mixtures and when the supply of American and Sea Island Cotton dried up, the mill owners moved over to Surat. Some machines could be adjusted to take it but extra humidity was needed to reduce breakages. Running a loom on Surat could only produce about 40 per cent of the previous throughput and, as workers were paid by the piece, their income was slashed. [10]

Mill owners were also in difficulty as many of the smaller family-owned mills were mortgaged and if they stopped running the owners would fall behind with payments. Shopkeepers had no sales and could not afford the rents, workers defaulted on their rents and the landlord who stood the loss was often the mill owner. [ citation needed ] The wealthier mill owners such as Henry Houldsworth, were confident that the famine was temporary and planned for the new more efficient larger machinery that was becoming available, it was during the famine (1863–65) that he built Houldsworth Mill, Reddish, the first of the next generation of larger mills and at the time the world's largest mill with 138,000 spindles. [11] With most raw cotton unavailable, mill owners had to either close mills and attempt to help the workers financially, use inferior cotton or bring new cotton into production. Surat was available but mainly used internally in British India. Some limited increase in production was achieved. Attempts were made to establish Sea Island in Queensland and New Zealand and to grow short staple near Mumbai. [12]

The cotton industry had become highly specialised by the 1860s and the severity of the famine in different towns depended on many factors. Some towns were built around mills using short fibre American cotton, while others used the longer fibre Egyptian cotton still available. Some mills had mules that could be adjusted to use a different cotton, others did not. Owners of "integrateds" (mills that both spun and wove) could better balance the workload, thus preserving the precious raw material for longer. Some cautious mill owners always held stock in hand, others bought as required. [ citation needed ]

The older paternalistic mill owners who lived among the local community were quick to divert their neighbours and workforce to maintenance work at their own expense. For example, in Glossop, Lord Howard called a family meeting of mill owners, clergy and "respectable" residents to take charge of the situation. Two relief committees were formed which experimented unsuccessfully with soup kitchens then set about distributing thousands of pounds worth of provisions, coal, clogs and clothing. Calico printer, Edmund Potter, loaned money to his workers and Howard took on extra workers on his estate. They set up schools, provided free brass band concerts, gave public readings from the Pickwick Papers and after the enactment of 1864 Public Works Act, took a loan to extend the waterworks. The only recorded tension was when the Relief Committee mistakenly decided to auction, instead of distributing free, a gift of food from the American federal government. [13]

Towns with room and power mills and a strong co-operative tradition were quick to mitigate the social damage. The firms using them would rent the space and buy the machines on credit cotton was cheap and the profit from the cloth was used to pay off the loan and provide a return for the risk. When cotton was unavailable they were the first to go bankrupt. After the famine the need was for more advanced machines and bigger mills. The investment required was too much for many private mill owners, and limited companies built the new larger mills. Limited companies developed fastest in the areas with a room and power tradition. Municipal authorities did not have the legal power to borrow money to finance public works until the 1864 Act before this they had to use their own reserves, which varied from town to town. [14]

Some workers left Lancashire to work in the Yorkshire woollen and worsted industries. A small number of mills such as Crimble Mill, Heywood converted to woollen production buying in second hand fulling stocks, carding equipment, mules and looms. [15] The towns of Stockport, Denton and Hyde diversified into hat making. Tameside was the worst affected district and suffered a net loss of population between 1861 and 1871. [16] In 1864 there were 2,000 empty houses in Stockport and 686 in Glossop, along with 65 empty shops and fifteen empty beer houses. The exodus was caused primarily by evictions. The spring saw a wave of emigration stimulated by special agencies. The steamship companies cut their rates (steerage to New York cost £3 15s 6d), the Australian and New Zealand governments offered free passage, and 1,000 people had emigrated by August 1864, 200 of them from Glossop. [17]

Relief in times of hardship was governed by the Poor Law Act, which required Poor Law Guardians to find work for the fit. In rural communities this was stone breaking in the quarries, the mines etc. Outdoor work was quite unsuitable for men who had been working in the humid, heated mills, whose lungs had been damaged by cotton dust. The act only required that men be set to work as long as he continued to receive relief. [18]

The Poor Law Amendment Act 1834 had required parishes to come together to form Poor Law Unions to administer the relief. Their job was to minimise the cost to the parishes which must finance their own poor. Paupers should be returned to their parishes of origin. Charles Pelham Villiers MP, the Poor Law Commissioner who represented an industrial constituency, wrote to the Poor Law Unions in September 1861 warning them of potential famine and instructing them to fulfil their duties with Compassion. Money had to be raised locally on the parish rates. H. B. Farnell, was appointed by Parliament to investigate the effects in Lancashire, where he started in May 1862 in Preston. He laid down a liberal interpretation of the Act and instructed gifts from charity should not be taken into account when assessing need. As an alternative to outdoor work, sewing classes were run by the churches which entitled the participants or "scholars" to receive benefit. Bible Reading classes followed and then industrial classes which taught reading, writing and simple maths with carpentry, shoemaking and tailoring. [19] The Poor Law Unions were limited in the monies they could raise through rates and had no powers to borrow. Parliament passed the Union Relief Aid Bill 1862 which allowed the burden be shared between the parishes and the county and then Public Works (Manufacturing Districts) Act 1864 authorised borrowing. [20]

All those in work were encouraged to subscribe to charity and lists of subscribers were published. Local relief committees were set up to administer these funds, receiving other donations from the Mansion House Committee of London and Central Relief Committee of Manchester. The Mansion House Fund, more properly named the Lancashire and Cheshire Operatives Relief Fund, was set up on 16 May 1862, when £1,500 (equivalent to about £140,000 in 2021) was sent to the distressed districts. [21] Benefactors all over the United Kingdom, the Empire and across the world, raised money for the appeal. Between April 1862 and April 1863, £473,749 was collected and distributed (about £45.7 million in 2021). [22] [21] The Central Committee was formed 20 June 1862, composed of mayors of the affected towns it put out an appeal letter to other towns across the country. A third fund, set up in June 1862 for slightly different purposes, was the Cotton Districts Relief Fund, which became part of the Central Committee. [23]

By the winter of 1862–1863 there were 7,000 unemployed operatives in Stalybridge, one of the worst affected towns. Only five of the town's 39 factories and 24 machine shops were employing people full-time. Contributions were sent from all over the world for the relief of the cotton operatives in Cheshire and Lancashire and at one point three-quarters of Stalybridge workers were dependent on relief schemes. By 1863 there were 750 empty houses in the town. A thousand skilled men and women left the town in what became known as "The Panic". In 1863 the local relief committee decided to substitute a system of relief by ticket instead of money. The tickets were to be presented at the shops of local grocers. On Thursday 19 March a public meeting resolved to resist the tickets. On Friday 20 March 1863, the officials of the relief committee went to the thirteen schools to offer the tickets, the men refused the tickets and turned out onto the streets. They stoned the cab of the departing official and then broke the windows of the shops owned by members of the relief committee, then turned to the depots of the relief committee which they sacked. By evening, a company of Hussars came from Manchester the Riot Act was read and eighty men were arrested women and girls continued to harangue the police and soldiers.

On Saturday 21 March, the magistrates released most of the prisoners but committed 28 for trial in Chester. They were taken to the railway station by police and soldiers, who were pelted with stones. A further public meeting demanded "money and bread" not "tickets". Rioters demanded bread at various shops and in each case it was given to them. At 23:30, a company of infantry arrived and patrolled the streets with bayonets fixed. On the Sunday, supporters and visitors arrived in the town but there were no developments. On Monday 23 March the riot spread to Ashton, Hyde and Dukinfield. Schools had reopened but only 80 of the expected 1,700 students attended (agreed to be paid by ticket). Representatives were sent to the schools in the neighbouring towns to persuade the scholars to walk out but were met by soldiers. On the Tuesday the mobilisation ended, the relief committee offered to pay the outstanding tickets and to accept a delegation from the thirteen schools to discuss the matter further. The mayor offered that the MP, John Cheetham would take the matter to parliament. The crowd believed that they had not lost relief and the ticket system would soon be abolished. [24] The Stalybridge relief committee re-established authority. The Manchester Central Committee was critical of their poor management but they were being undermined by the Mansion House Fund of the Lord Mayor of London, which offered to distribute cash to scholars directly through the churches. The violence was blamed on outside agitators and the blame was put on an immigrant minority. Descriptions suggest about 3,500 participants, although there were only 1,700 scholars receiving aid. [25]

In March 1863, there were some 60,000–70,000 women attending sewing school and 20,000 men and boys attending classes. They were defined as doing useful work so could legally receive aid under the Poor Law legislation. There remained a further 25,000 men receiving aid but not doing any work. To Victorian thinking this was wrong and some means was needed to provide paid work. Local authorities did have work that needed to be done but no legal way to borrow to pay for it. [26] The Public Works Manufacturing Districts Act 1864 became law 2 July 1863. This allowed public authorities to borrow money for public works. Cotton operatives could now be employed on useful projects.

The Lancashire area has a legacy of municipal parks that were created in this period such as Alexandra Park, Oldham. [27] More important were the main sewers that were commissioned to replace the collapsing medieval drains and to bring sanitation to the hundreds of mill workers' cottages that supported the mills. [28] Canals were dug, rivers straightened and new roads constructed such as the cobbled road on Rooley Moor above Norden known as the "Cotton Famine Road". [29] The public works commissioned in this period left a major impression on the infrastructure of the towns of Lancashire and the surrounding cotton areas.

A trickle of raw cotton reached Lancashire in late 1863 but failed to get to the worst affected regions, being swallowed up in Manchester. The cotton was adulterated with stones but its arrival caused the principal operators to bring in key operators to prepare the mills. The American Civil War ended in April 1865. In August 1864, the first large consignment arrived and Wooley Bridge mill in Glossop reopened, giving all operatives a four and half day week. Employment then returned to normal. Raw cotton prices had risen from 6½d in 1861 to 27½d in 1864. [30]

The Confederacy hoped that distress in the European cotton manufacturing areas (similar hardships occurred in France), together with distaste in European ruling circles for Yankee democracy would lead to European intervention to force the Union to make peace on the basis of accepting secession of the Confederacy. After Union forces had repulsed a Confederate incursion at the Battle of Antietam in September 1862, Lincoln issued his Emancipation Proclamation. Slavery had been abolished in the British Empire by the Slavery Abolition Act 1833 three decades earlier after a long campaign. The Unionists believed that all the British public would now see this as an antislavery issue rather than an anti-protectionism issue and would pressure its government not to intervene in favour of the South. Many mill owners and workers resented the blockade and continued to see the war as an issue of tariffs against free trade. Attempts were made to run the blockade by ships from Liverpool, London and New York. 71,751 bales of American cotton reached Liverpool in 1862. [31] Confederate flags were flown in many cotton towns.

On 31 December 1862, a meeting of cotton workers at the Free Trade Hall in Manchester, despite their increasing hardship, resolved to support the Union in its fight against slavery. An extract from the letter they wrote in the name of the Working People of Manchester to His Excellency Abraham Lincoln, President of the United States of America says:

. the vast progress which you have made in the short space of twenty months fills us with hope that every stain on your freedom will shortly be removed, and that the erasure of that foul blot on civilisation and Christianity – chattel slavery – during your presidency, will cause the name of Abraham Lincoln to be honoured and revered by posterity. We are certain that such a glorious consummation will cement Great Britain and the United States in close and enduring regards.

On 19 January 1863, Abraham Lincoln sent an address thanking the cotton workers of Lancashire for their support,

. I know and deeply deplore the sufferings which the workingmen at Manchester and in all Europe are called to endure in this crisis. It has been often and studiously represented that the attempt to overthrow this government, which was built upon the foundation of human rights, and to substitute for it one which should rest exclusively on the basis of human slavery, was likely to obtain the favor of Europe. Through the actions of our disloyal citizens the workingmen of Europe have been subjected to a severe trial, for the purpose of forcing their sanction to that attempt. Under these circumstances, I cannot but regard your decisive utterance upon the question as an instance of sublime Christian heroism which has not been surpassed in any age or in any country. It is, indeed, an energetic and reinspiring assurance of the inherent power of truth and of the ultimate and universal triumph of justice, humanity, and freedom. I do not doubt that the sentiments you have expressed will be sustained by your great nation, and, on the other hand, I have no hesitation in assuring you that they will excite admiration, esteem, and the most reciprocal feelings of friendship among the American people. I hail this interchange of sentiment, therefore, as an augury that, whatever else may happen, whatever misfortune may befall your country or my own, the peace and friendship which now exist between the two nations will be, as it shall be my desire to make them, perpetual. Abraham Lincoln

A monument in Brazenose Street, Lincoln Square, Manchester, commemorates the events and reproduces portions of both documents. [32] The Abraham Lincoln statue by George Grey Barnard, 1919, was formerly located in the gardens at Platt Hall in Rusholme. The Federal American government sent a gift of food to the people of Lancashire. The first consignment was sent aboard the George Griswold. Other ships were the Hope and Achilles. [33]

To moderate the effects of the cotton famine, the British tried to diversify its sources of cotton by making former subsistence farmers in British India, Egypt and elsewhere grow cotton for export often at the expense of staple food production. An attempt to grow cotton was also made on the island of Sicily. With the ending of the American Civil War, these new cotton farmers became redundant and their cotton was hardly demanded. This led to their impoverishment and aggravated various famines in these countries in the second half of the 19th century. [34] Regions such as Australia, welcomed skilled spinners and weavers and encouraged their immigration. [ citation needed ]

In a 2015 article, economic historian Walker Hanlon finds that the cotton famine significantly affected the direction of technological progress in domains relevant to textiles manufacturing using Indian cotton, particularly for gins, openers and scutchers, and carding machines. [35] This manifested in the major manufacturer Dobson & Barlow utilizing four different gin designs over the course of four years, as well as a 19-30 percent reduction in wasted Indian cotton over the period from 1862 to 1868. Hanlon also finds that the relative price of Indian cotton to American cotton returned to its pre-Civil War level by 1874 despite significantly increasing in abundance, which is evidence of the "strong induced-bias hypothesis" as proposed by Daron Acemoglu.


American Civil War - The Economics of Slavery

Slavery existed in America from colonial times until the end of the Civil War in 1865. The 13th Amendment to the U.S. Constitution ended slavery forever.

In the North: Slavery was not economical in the North.

African slaves arrived slowly during the first 50 years of American colonization. Some came as indentured servants. Most indentured servants in the colonies were white Europeans who had voluntarily sold themselves for a period of years to pay for their passage to the New World. Indentured servants, both black and white, made up most of the labor force in the early colonial period. People of the time understood the system of indentured servant. In the early days, the northern colonies were remarkable free of racial bias. Free blacks owned land, voted, held elected offices, and sometimes imported their own white indentured servants. The prejudice of the time was that of the English gentry towards the lower classes without regard to color of skin.

Indentured servants were under the complete authority of their master for the duration of their term as a servant. It was legal for an indentured servant to be whipped, branded, sold, or prevented from marrying by their owner. Indentured servants worked long hard hours, doing jobs no one else wanted to do. Why have slaves? Why not simply keep indentured servants? Slaves from African had been captured and forced to the New World. Many had been ripped apart from their families in Africa, so they were unhappy. They did not speak the language of the colonists, so they were difficult to train. Business owners did not want the expense of caring for a slave's family until their small children could be put to work. To their owners, slavery in the North was not cost effective. Many slaves, after a certain amount of time, were freed.

In the South: Slavery was economical in the South.

The climate in the southern colonies was ideal for large-scale farming, with long growing seasons. The availability of slave labor was critical to running a cost effective, large-scale farming operation. There were many waterways to use to get crops to market. Crops that made some southern farmers rich included tobacco, sugar cane, and rice. A large number of laborers were needed to plant, care for, and harvest these crops. Not only did an owner receive a lifetime of service from a slave, they also gained a renewable resource - a lifetime of service from the children of female slaves, as these children were born into slavery. In the beginning, a female slave was expected to have 3 kids. As time went on, and farms expanded and needed more labor, a female slave was expected to have 6 kids. As tobacco farms grew in Virginia and Maryland, more slaves were purchased. Rice farming grew in importance in South Carolina. Again, slave labor was economical. Not everyone in the south owned a plantation. There were many small farms and medium sized farms. There were many businesses designed to support the farms. But those farms or plantations with size depended upon slave labor. And many businesses depended upon farms of size.

The invention of the cotton gin, before the Civil War, encouraged the growth of another crop - cotton. Cotton as a major crop spread throughout the South. Between 1790 and 1860 (the year Abraham Lincoln was first elected president), about one million slaves were put to work on the new cotton plantations. That was nearly twice as many slaves as imported during the prior 200 years of slave trade. The South had become dependent upon slavery.


What was the effect of the Civil War on the cost of cotton? - History

King Cotton

In 1858 Senator James Henry Hammond of South Carolina replied to Senator William H. Seward of New York:

"Without the firing of a gun, without drawing a sword, should they [Northerners] make war upon us [Southerners], we could bring the whole world to our feet. What would happen if no cotton was furnished for three years? . . 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 make war upon it. Cotton is King."

Hammond, like most white Southerners, believed that cotton ruled not just in the South but in the United States and the world. Many economists agreed. In 1855, David Christy entitled his influential hook Cotton Is King. Cotton indeed drove the economy of the South, affected its social structure, and, during the Civil War, dominated international relations of the Confederacy through "cotton diplomacy."

Cotton in the Antebellum Period

In the early eighteenth century, long-staple cotton was grown in Georgia and on the Sea Islands of South Carolina, but it depleted the soil and proved unprofitable to market. The intensive and laborious hand method of picking out cotton seeds severely restricted the amount of cotton that could be prepared for making into cloth. Cotton could not compete with rice and indigo for commercialization, and Southern colonialists experimented with the crop primarily for domestic use. Despite some increased cotton production during a tobacco depression between 1702 and 1706, few attempted to produce cotton commercially before the Revolutionary War.
Extensive production of cotton awaited the advent of Eli Whitney's cotton gin in the spring of 1793. To separate the seed from the cotton, gins first used spikes placed on rollers and then saws. The influence of the gin was instantaneous soon Southern mechanics set up gins as far west as Mississippi. By 1804 the cotton crop was eight times greater than it had been the previous decade. The cotton gin made practical the use of the heavily seeded short-staple cotton, which could he grown in upland areas more readily than long-staple cotton. An increase in market demand growing out of England's textile industry ensured favorable prices and spurred the ascension of the short-staple cotton industry.
Cultivation of cotton, on both small and large farms, utilized relatively simple methods. Hoe ridge cultivation was developed after 1800 with ridges set apart about three to six feet, depending on the fertility of the land. After 1830 farmers used V-shaped harrows, which were converted into cultivators, side harrows, and double shovels. (Harrows raked soil with metal teeth to remove debris and smoothed out and leveled the soil once it was broken cultivators turned the soil under shovels were used as more traditional plows and also turned the soil over while digging deep furrows.) Cultivation procedures changed little throughout the nineteenth century. A bed for the cotton had to be prepared by clearing out the old stalks from the previous crop. Sometimes these stalks were beaten down with clubs, but if they were large (four to five feet), they had to be pulled by hand. Manure or commercial fertilizer was placed as deeply as possible in the furrow. Usually the cotton bed was built up in February and March. The actual planting of the cotton seed in most areas was in April: early planters risked frost late planters risked dry spells. Planting was done by hand. In about a month, the plants were thinned. The crop was cultivated with a sweep plowed between the rows four or five times and hoed by hand three or four times. In the middle of June, when they were anywhere from six inches to a foot high, the cotton plants bloomed. Around the last of July or first of August, forty-two to forty-five days after they had blossomed, the cotton bolls opened. Picking usually began about August 20. Most of the crop was ginned immediately after picking.
Cotton prices fluctuated wildly over the years. Prices were high until 1819, then down, up, and down again. In 1837 they hit a crisis low and remained rather low until 1848. Prices rose sharply in 1849 and 1850 but dropped in 1851, though not as low as previously. Throughout the remainder of the 1850s prices rose.
The average amount of seed cotton used to make a 400-pound bale of lint ranged from about 1,200 to 1,400 pounds. The bales had to be transported from the gins to a local market and then on to larger markets. Cotton was shipped to market continually from September through January. Wagons loaded with bales of cotton often lined roads. The moving of cotton demanded better roadbeds, sometimes even plank roads, near market towns. River transportation to seaports was common from market towns located on rivers or canals. Major cities grew up at railroad stations as rail lines began to link the hinterland to ports and then to the Northeast and Midwest.
Improvements in the production and transportation of cotton and the new demand for the fiber led to a scramble for greater profits. To reap the most profits and to provide the labor needed for cotton picking, a large number of slaves were imported into South Carolina and Georgia, and slave labor became a valuable market throughout the South. The way into the Southern aristocracy was through the ownership of land and slaves, and the way to get land and slaves was to grow cotton: the crop provided the cash and credit to buy both. At this time, too, the cotton kingdom pushed ever westward with planters searching for new and richer soils to grow more white cotton with the labor of more black slaves. Ironically, just as abolition-1st sentiment was increasing in the United States, the invention of the cotton gin instigated a deeper entrenchment of slavery into the Southern economy and society.
The Southern aristocracy, which slavery created, dominated Southern society and inhibited the development of efficient methods for soil use. In the face of soil exhaustion, Southern planters needed to extend control into the fresh lands of the western territories. Hence, territorial expansion became a sectional issue as both North and South realized that western lands were essential for the survival of the Southern slave culture.
Most discussions of cotton dwell on the short period when cotton did rule as king. This "mature" period of cotton and slavery was not necessarily typical of or relevant to the earlier periods of plantation agriculture that accompanied the emergence of the cotton mono-culture. Discussions also tend to treat the South as one unit rather than the large and varied region it was. The cotton kingdom extended west through Texas and north about six hundred miles up the Mississippi River valley.
Antebellum history often seems dominated by scenes of plantations worked by slaves. Although thousands of large plantations employed slave labor and produced most of the South's cotton, numerically there were more small farmers, mostly whites, who cultivated the upland areas. Many of these yeomen were subsistence farmers and produced only a surplus of cotton for market. Southern farmers who did not grow cotton sold some of their foodstuff to the planters. Cotton could bring prosperity or depression, according to changes in the market, and these fluctuations meant very differing experiences for whites, slaves, and antebellum free blacks of each different region of the South.
When at its peak, the demanding cultivation and transportation of cotton required the labor of the majority of men, women, and children in the rural South. Most Southern life was regulated by the agricultural economy, and more and more over time, this came to mean the cotton economy. Although free workers and slaves pursued a diversity of agricultural and industrial occupations in the antebellum South, by 1850 the routine of taking care of the white-blossomed, white-bolled, short-staple cotton plants increasingly typified rural Southern existence.
By 1860, cotton ruled the South, which annually exported two-thirds of the world supply of the "white gold." Cotton ruled the West and Midwest because each year these sections sold $30 million worth of food supplies to Southern cotton producers. Cotton ruled the Northeast because the domestic textile industry there produced $100 million worth of cloth each year. In addition, the North sold to the cotton-growing South more than $150 million worth of manufactured goods every year, and Northern ships transported cotton and cotton products worldwide.

Cotton in the Confederacy

As the U.S. cotton industry developed, other countries became more dependent on cotton produced in the American South. The power of cotton allowed the Confederacy to employ cotton diplomacy as its foundation for foreign relations during the Civil War Southerners attempted to use cotton to pressure countries such as England and France into the war on behalf of the Confederacy. Southern leaders were convinced that the key to their success lay in gaining international recognition and help from European powers in breaking the blockade that the Union had thrown up around coastal areas and ports and that was increasingly effective as the war went on. (Although the Union blockade never thoroughly sealed the Confederate coastline, it was successful in causing Southern imports and exports to drop drastically at a time when the Confederacy needed to fund its huge war efforts.)
Southerners saw cotton as the great leverage in this effort, and at the time this made sense. More than three-fourths of the cotton used in the textile industries of England and France came from the American South. Between a fourth and a fifth of the English population depended in some way on the textile industry, and half of the export trade of England was in cotton textiles. About a tenth of the nations wealth was also invested in the cotton business. The English Board of Trade said in 1859 that India was completely inadequate as a source of raw cotton England apparently was dependent on the American South for cotton. This concept of King Cotton led many Southerners to believe that England and France would have to intervene in the Civil War in order to save their own economies. The Confederacy began applying pressure on the neutral powers through a voluntary embargo of cotton. Although Congress never formally established the embargo, local "committees of public safety" prevented the shipping of cotton from Southern ports.
To exploit their leverage, the Confederate States sent William Lowndes Yancey, Pierre A. Rost, and A. Dudley Mann to England in the spring of 1861 to confer with Lord Russell, the British foreign secretary. As a result, the British and French granted the Confederacy belligerency status. It was a small victory, probably not very effective in helping the Confederacy. The cotton diplomats failed to arrange with England a denunciation of the blockade or the negotiation of a commercial agreement, let alone diplomatic recognition of the Confederacy.
Regardless of wishful beliefs and England's real economic dependence on cotton, at the time of the outbreak of the Civil War an overabundance of cotton existed in Europe. Furthermore, British hostility to slavery decreased the likelihood of intervention. Moreover, it was not in the vested interests of the neutral powers, particularly Great Britain, to denounce the blockade. The Confederate government attempted to convince the Europeans that the Federal blockade was ineffective and thus illegal under the terms of the 1856 Treaty of Paris. The Confederacy failed to acknowledge that Great Britain, as the worlds foremost naval power, would desire to let stand any blockade, regardless of its legality or actual effectiveness. And to make matters even worse, the South's voluntary embargo undercut its own argument that the Federal blockade was porous.
Although the South never succeeded in convincing foreign powers to intervene against the North, cotton diplomacy was successful in obtaining financial help from abroad. This came in the form of loans and bonds, which Confederate Treasurer Christopher G. Memminger guaranteed with cotton. The Confederate Treasury Department issued $1.5 million in cotton certificates during the war for acquisitions abroad. One such loan backed by cotton was the Erlanger loan, signed on October 28, 1862, and modified on January 3, 1863. This loan, amounting to $15 million, was secured by cotton. At the time cotton was worth twenty-four pence a pound, and the Erlanger loan made cotton available to holders at six pence per pound.
This reliance on cotton for the security of loans, bonds, and certificates placed a great deal of responsibility on the Produce Loan Office, whose agents had to ensure that planters would fulfill government subscriptions of cotton at a time when many planters were unwilling to sell to the government. Ultimately, however, cotton enabled the Confederacy to realize $7,678,591.25 in foreign exchange.
The Confederacy also hoped to raise tax revenue on the sale of cotton abroad. On February 28, 1861, Congress passed an act levying an export duty of 1/8 cent per pound on all cotton shipped after August 1 of that year. The government hoped to raise $20 million through the export tax in order to pay a $15 million loan funded by an issue of 8 percent bonds. But because of the tightening blockade and the South's own voluntary cotton embargo, the measure raised only $30,000. When the secretary of the treasury lobbied to have this minuscule tax raised, opposition from the planter class kept Congress from increasing it, even when the Confederacy's finances were desperate.
To a degree, planter opposition also undercut Southern efforts to shift from cotton production to the planting of foodstuffs. The Confederacy was convinced it could become self-sufficient. It would produce all the food and cotton it needed, and revenue from cotton could buy weapons, blankets, and other manufactured goods until the Confederacy started manufacturing its own. Planters believed that the yeomen and pout would fight in the army and that slaves would continue to produce food and the South's greatest weapon, cotton.
By the spring of 1862, however, there was already an abundance of cotton and a shortage of foodstuffs. In April 1862 yeomen soldiers could not go home to plant spring crops, and their families would again have no food. To encourage the growth of foodstuffs, every Southern cotton-producing state attempted to limit the amount of cotton that could be grown. State governors issued proclamations urging planters to reduce their cotton acreage by as much as four-fifths and encouraging them to plant enough wheat, corn, and beans to feed themselves, their slaves, and the armies in the field. The planters responded, cutting their usual acreage of cotton to about half and devoting the rest to food crops. Many planters even had enough surplus foodstuffs to sell to the families of the yeoman poor whose husbands and sons were away in the wan Still, the planters did not reduce their cotton production as much as the state and Confederate governments wanted. Some scholars argue that this is an example of how the Confederacy contributed to its own defeat by refusing to disturb the interests of the planter class.
But even with resistance by the planters, the shift to the production of foodstuffs combined with the drain in manpower and the eventual Union occupation created a drastic drop in Cotton production as the war dragged on: 4.5 million bales were grown in 1861 1.5 million in 1862 500,000 in 1863 and only 300,000 in 1864. As production dropped, the price of cotton skyrocketed on the world market, and blockade runners decided the risks were worth raking cotton-exporting corporations formed throughout the cotton kingdom. In addition, Mexico traded cotton directly across the Texas border.
In an attempt to control the flow of cotton to Europe and rectify the declining economy, Southern politicians in late 1863 introduced an approach called the "New Plan." Through this series of administrative actions and congressional laws, the Confederate government became directly involved in blockade running. Rather than making contracts for supplies payable in cotton, the government itself began selling the cotton abroad and buying supplies with the proceeds, thereby cutting out the middlemen. The plans supervisor, Colin J. McRae, gained direct control over cargo space on blockade runners. Those who refused to accept a fair rate to transport cotton for sale by the government would have their vessels confiscated. The War Department increasingly turned to the sale of cotton to purchase needed supplies, and by the end of 1863 it bad reserved fully one-third of all cargo space on blockade runners.
As a result of these measures and other financial consolidations under the plan, Confederate foreign financing was greatly improved and 27,229 bales of cotton were exported for $5.3 million in sales. But because of the Confederacy's early confidence in the diplomatic leverage of King Cotton, it did not institute measures such as the New Plan soon enough to make a considerable impact on the war effort. The South could nor keep its vital ports open or continue to endure Northern attacks on the battlefield.
Some scholars have written with hindsight that the Confederacy might have been more successful, had it pursued a different strategy with its cotton. If Confederate leaders had confiscated all the cotton in the South and stored it, they could have used it as a basis to obtain credit from European nations. With credit, some scholars believe, the Confederacy could have bought a navy strong enough to break the Union blockade. Others argue that the Confederate government would have been better served if it had made cotton, nor gold, the basis of its currency.
Although the Civil War ended the slave plantation system, it did not end the South's legacy of cotton. Cultivation of the crop had worn out much of the land. Many planted up and down on slopes, which then eroded. The concentration on cotton production meant complete reliance on a one-crop system crop rotation was uncommon, and farmers did nor plow under clover or peas to restore humus to the soil. Diminishing fertility of cotton lands was a major problem farmers continued to face after the Civil War.

UNION COTTON TRADE
Selling to the Enemy

If the Confederate government was able, albeit partially and belatedly, to gain control over the cotton trade with Europe, it had much less success in curtailing the cotton trade with the Union. On May 21, 1861, the Confederate Congress prohibited the sale of cotton to the North. Yet an illicit trade across military lines flourished between Southern cotton farmers and Northern traders. President Abraham Lincoln gave licenses to traders, who followed the Union army into the South. On March 17, 1862, the Confederacy gave state governments the right to destroy any cotton that might fall into the hands of the Union army. Some devoted Confederates burned their own cotton to keep it out of enemy hands. Other Southerners, however, discovered that Union agents were willing to pay the highest prices in over half a century for cotton or offered badly needed supplies as barter. Ironically, valuable currency for cotton from the North saved some small Southern farmers from starvation. But this selling of cotton to the North undermined Confederate Nationalism, as did the official Confederate trading of cotton with the North conducted in the last years of the war.
As the price of foodstuffs reached astronomical heights and Confederate currency became worthless with inflation, the smuggling of cotton out of the South to the North increased. Women whose husbands had been killed or were away at the battlefield or in prison were heavily involved in forming these caravans. Rich planters and factors also made large deals with Federal officials. The situation became totally absurd when cotton was sold to Federal troops to get supplies for the Confederate army. Even President Lincoln approved an arrangement to send food for Robert E. Lee's Troop at Petersburg in exchange for cotton for New York. Ulysses S. Grant stopped this exchange because he was attempting to cut off Lee's supplies, but other such exchanges occurred through the Civil War.
Source: "The Confederacy" A Macmillan Information Now Encyclopedia, article by Orville Vernon Burton and Patricia Dora Bonnin.


POCKETS OF INDUSTRY: LYNCHBURG

The antebellum South was not all cotton plantations and riverboats. Small-scale industry did emerge in Southern towns such as Lynchburg, Virginia. By 1858 three railroad lines intersected there, and like railroad connections in the Midwest, the industrial infrastructure boosted manufacturing in the town. On the eve of the Civil War, Lynchburg held eleven grist mills, several coppersmiths, a fertilizer manufacturer, and four coachmakers — one of which employed twenty-five workers making freight and passenger railroad cars for the Virginia and Tennessee Railroad. Lynchburg ’ s most important industry, though, was tobacco manufacturing: in 1860 more than one thousand slaves and free blacks worked in tobacco factories — steaming, stemming, and dipping leaves in syrup, then spicing the tobacco, molding it into plugs, and packaging it for delivery to the North. Most slaves were “ hired/ ’ or rented from their masters, on an annual basis. Some of these slave workers managed to negotiate with employers on their own behalf lucky ones earned cash incentives for “ overwork. ” During the war the curtailment of tobacco planting in the surrounding countryside shut down the industry, and postwar conditions fluctuated wildly. Freed workers tested their autonomy in several strikes during this period and wrested modest concessions from factory owners (all of whom were white). Meanwhile, in the wake of emancipation small black businesses proliferated in the town: by 1880 African Americans owned and operated groceries, liveries, produce stalls at the city market, saloons, bathhouses, and artisinal shops.

Source: Steven Elliott Tripp, Yankee Town, Southern City: Race and Class Relations in Civil War Lynchburg (New York: New York University Press, 1997).

Postwar Development. In aftermath of the war, the Southern economy began slowly to diversify and commercialize. Agriculturally, land-use patterns grew even more cotton-intensive as new stretches of upcountry shifted from food production, such as corn and pork, to cotton. But the region (like other parts of the nation) also underwent a boom in railroad construction, and enthusiastic boosters and carpetbaggers also started manufacturing enterprises in the 1860s. The rate of manufacturing growth leveled off in the following decade but redoubled in the 1880s and 1890s. These enterprises included cotton mills, commercial fertilizer manufacturing plants (by 1877 South Carolina phosphate mines were shipping more than 100,000 tons to foreign markets), and iron forges. Whereas antebellum Southern ironmakers had relied on outdated and inefficient charcoal-burning operations, their postwar counterparts ran modernized coal mines, coke ovens, and blast furnaces. The town of Birmingham, for example, became an industrial center during this period. Organized in 1871 as part of a land speculation project by the Louisville and Nashville Railroad, the town rapidly developed substantial iron- and eventually steelworks, contributing to a statewide coal output of nearly 200,000 tons in 1877 and pig-iron production of nearly 37,000 tons.

Stores, Towns, Cities: A “ New South. ” Other changes, equally far-reaching and much more widely distributed, overhauled southern demographics and commercial patterns. Within a few years after the end of the war, a network of stores and towns began to spread through the region. “ We have stores at almost every crossroad, ” a South Carolina correspondent reported, “ and at the railway stations and villages they have multiplied beyond precedent. ” Indeed, the number of towns in that state doubled in the 1860s, then tripled in the 1870s. By 1880 more than eight thousand stores had sprouted across the South. Railroad connections made larger towns such as Selma and Macon key market connections, channelling the flow of commercial goods from the North out to the country stores. Atlanta, which proclaimed itself the capital of the “ New South, ” grew even more dramatically, prompting a visitor in 1870 to report that the city contained “ more of the life and stir of business than in all the other Southern cities. ” Capital and the credit on which the new commercial enterprises operated traced back to Northern sources, but even so, the transformation profoundly reoriented southern habits of buying and selling, tying the region into new, national commercial markets.

Free Labor. As they adjusted to new commercial structures and infrastructures, Southerners — white and black — began to hammer out new systems of labor. The most radical economic change of the postwar period was the elimination of slavery and the necessary definition of what free labor would mean in the cotton economy. The transition was not smooth, uniform, or peaceful. Former slaveowners retained their land, for the most part, and struggled to impose as much control as possible over the people who worked it. The freedmen, for their part, bargained for higher wages, insisted on the freedom to shop their labor, and refused to work in gangs as they had on the plantations. Plantation owners were forced to either pay wages (though few had money or access to it, in the postwar economic chaos) or, increasingly, to break their landholdings into family-sized plots and let African Americans farm it on a share basis.

The Emergence of Sharecropping. By the early 1870s the sharecropping system was solidifying. From the point of view of the freedmen, sharecropping permitted them to operate as family-sized economic units and to function with some measure of economic autonomy, but their measure of autonomy soon began to shrink. As they entered the new marketplace and began purchasing clothing, farming supplies, and other store goods, blacks put themselves under the control of storekeepers and former planters, who took out liens on future crops and thus bound the freedmen ever more tightly to cotton farming. One Alabama merchant gloated, “ I have sold Jack Peters ’ negroes more goods this year than ever I sold Peters, and he owned 450 negroes. ” Ultimately in the postwar South, the entrenchment of a “ free market ” undid much of the gains of freedom itself.


How Cotton Remade the World

The Civil War cotton shock didn't just shake the American economy.

Sven Beckert is professor of American history at Harvard and author of Empire of Cotton: A Global History, just published by Alfred A. Knopf.

The American Civil War is one of the best-researched events in human history. Hundreds of historians have dedicated their professional careers to its study thousands of articles and books have been published on its battles, politics and its cultural and social impact. Discussions of the war permeate everything from popular films to obscure academic conferences. Would we expect any less for a defining event in our history—an event that can persuasively be described as the second American Revolution? Certainly not.

Yet given all that attention, it is surprising that we have spent considerably less effort on understanding the war’s global implications, especially given how far-reaching they were: The war can easily be seen as one of the great watersheds of 19th-century global history. American cotton, the central raw material for all European economies (and also those of the northern states of the Union), suddenly disappeared from global markets. By the end of the war, even more consequentially, the world’s most important cotton cultivators, the enslaved workers of the American South, had attained their freedom, undermining one of the pillars on which the global economy had rested: slavery. The war thus amounted to a full-fledged crisis of global capitalism—and its resolution pointed to a fundamental reorganization of the world economy.

When we look at capitalism’s history, we usually look at industry, at cities and at wage workers. It is easy for us to forget that much of the change we associate with the emergence of modern capitalism took place in agriculture, in the countryside. With the rise of modern industry after the Industrial Revolution of the 1780s, the pressures on this countryside to supply raw materials, labor and markets increased tremendously. Since modern industry had its origins everywhere in the spinning and weaving of cotton, European and North American manufacturers quite suddenly demanded access to vastly increased quantities of raw cotton.

That cotton came almost exclusively from the slave plantations of the Americas—first from the West Indies and Brazil, then from the United States. When American cotton growers began to enter global markets in the 1790s after the revolution on Saint Domingue—once the world’s most important cotton-growing island—they quickly came to play an important, in fact dominant, role. Already in 1800, 25 percent of cotton landed in Liverpool (the world’s most important cotton port) originated from the American South. Twenty years later that number had increased to 59 percent, and in 1850 a full 72 percent of cotton imported to Britain was grown in the United States. U.S. cotton also accounted for 90 percent of total imports into France, 60 percent of those into the German lands and 92 percent of those shipped to Russia. American cotton captured world markets in a way that few raw material producers had before—or have since.

Planters in the United States dominated production of the world’s most important raw material because they possessed a key combination: plentiful land, recently taken from its native inhabitants, plentiful slave labor, made available by the declining tobacco agriculture of the upper South and access to European capital. European merchants’ earlier efforts to secure cotton crops from peasant producers in places such as Anatolia, India and Africa had failed, as local producers refused to focus on the mono-cultural production of cotton for export, and European merchants lacked the power to force them. It was for that reason that cotton mills and slave plantations had expanded in lockstep, and it was for that reason that the United States became important to the global economy for the first time.

Slave plantations were fundamentally different sites of production than peasant farms. On plantations, and only on plantations, owners could dominate all aspects of production: Once they had taken the land from its native inhabitants, they could force enslaved African-Americans to do the backbreaking labor of sowing, pruning and harvesting all that cotton. They could control that labor with unusual brutality, and could deploy and redeploy it without any constraints, lowering the costs of production. With the expansion of industrial capitalism, this strange form of capitalism expanded, and European capital in search of cotton flowed to the slave areas of the world in ever-greater quantities. This world was not characterized by contracts, the rule of law, wage labor, property rights or human freedom—but by the opposite—arbitrary rule, massive expropriations, coercion, slavery and unfathomable violence. I call this form of capitalism “war capitalism” it flourished in parts of the United States and eventually resulted in civil war.

Slavery stood at the center of the most dynamic and far-reaching production complex in human history. Herman Merivale, British colonial bureaucrat, noted as much in 1839 when he observed that “the greater part of our cotton [is] raised by slaves,” and Manchester’s and Liverpool’s “opulence is as really owing to the toil and suffering of the negro, as if his hands had excavated their docks and fabricated their steam-engines.”

As the cotton industry of the world expanded, with spinning and weaving mills cropping up in fast-industrializing areas, the cotton-growing complex migrated ever further into the American West, to Alabama, Mississippi and eventually Texas, drawing on ever more slave labor. By 1830, one in 13 Americans grew cotton, one million people in total, nearly all of them enslaved. In one of the most violent episodes in American history, one million enslaved workers were uprooted and sold from the upper South into cotton growing states such as Mississippi, Alabama and Louisiana, where their labor fueled a vast profit-making machine. This machine enriched not just the plantation owners, but also merchants in New York and Boston and Liverpool, as well as manufacturers in Alsace, Lancashire and New England. Slavery in the United States had become central to the functioning of the global economy, as South Carolina cotton planter Sen. James Henry Hammond observed quite accurately when he argued, “Cotton is king.”

When war broke out in April of 1861, this global economic relationship collapsed. At first, the Confederacy hoped to force recognition from European powers by restricting the export of cotton. Once the South understood that this policy was bound to fail because European recognition of the Confederacy was not forthcoming, the Union blockaded southern trade for nearly four years. The “cotton famine,” as it came to be known, was the equivalent of Middle Eastern oil being removed from global markets in the 1970s. It was industrial capitalism’s first global raw materials crisis.

The effects were dramatic: In Europe, hundreds of thousands of workers lost employment, and social misery and social unrest spread through the textile cities of the United Kingdom, France, Germany, Belgium, the Netherlands and Russia. In Alsace, posters went up proclaiming: Du pain ou la mort. Bread or death. Since very little cotton had entered world markets from non-enslaved producers in the first 80 years after the Industrial Revolution, many observers were all but certain that the crisis of slavery, and with it of war capitalism, would lead to a fundamental and long-lasting crisis of industrial capitalism as well. Indeed, when Union Gen. John C. Frémont emancipated the first slaves in Missouri in the fall of 1861, the British journal The Economist worried that such a “fearful measure” might spread to other slaveholding states, “inflict[ing] utter ruin and universal desolation on those fertile territories” and also on the merchants of Boston and New York, “whose prosperity … has always been derived” to a large extent from slave labor.

Yet to the surprise of many, the American Civil War did not result in a permanent crisis of industrial capitalism, but instead in the emergence of a fundamentally new relationship between industry and the global countryside, one in which industry drew on peasant, not slave, produced cotton. Already during the war itself, determined European manufacturers and imperial statesmen opened up new sources for raw cotton in India, Brazil, Egypt and elsewhere. So rapid was the expansion in Egypt, for example, that Egyptian historians consider the American Civil War one of the most important events in their own 19th-century history. New infrastructures, new laws, new capital and new administrative capacities were pushed into the global countryside. Combined with rapidly rising prices for raw cotton, these changes resulted in a world where for the first time ever, peasant producers sold large quantities of raw cotton into world markets, preventing the total collapse of the European industry and connecting the countryside to the cities in ways that had never been seen before.

India provides a good example for these transformations. The British imperial government built railroads into the cotton-growing hinterland. It changed Indian contract law to enable merchants to advance capital to cultivators on the security of their crop and land. European merchants, who had until then played a subordinate role in trading Indian cotton, now moved into cotton-growing regions, advanced capital to growers and built steam-powered cotton gins and cotton presses. The newly invented telegraph enabled price information to travel quickly, and by the 1870s European manufacturers could order cotton from hinterland towns in India and have it delivered to their factories in just six weeks.

Indian cultivators, like those elsewhere, increasingly specialized in the production of cotton for export, moving away from their old domestic industry of cloth production, and replacing food crops with cotton. Many of them turned into sharecroppers, highly indebted to local merchants. This model also travelled to the American South in the wake of the Civil War, when freedpeople’s efforts to gain access to land failed just as much as the efforts of landowners to hire them as wage workers. As a result, in Alabama and Georgia, South Carolina and Mississippi, formerly enslaved cotton growers became sharecroppers and tenant farmers. Railroads pushed ever further into the American cotton-growing countryside, bringing with them a new generation of merchants and European and North American capital. So called “Black codes” and new laws regulating advances to sharecroppers attached freedpeople, and, increasingly, white yeoman farmers, to the global cotton empire.

Slavery might have been at the center of the European cotton industry for three generations, but by the last third of the 19th century the new strength of European and North American capital and state power (with its vast infrastructural, administrative, military and scientific might) paved the way for other forms of labor mobilization—solving what was, from the perspective of the Economist,, one of the core problems the world faced at the end of the American Civil War: “It is clear that the dark races must in some way or other be induced to obey white men willingly.”

So successful was the transition of slave labor into sharecropping and tenant farming during and after the war that cotton production actually expanded dramatically. By 1870, American cotton farmers surpassed their previous harvest high, set in 1860. By 1877, they regained and surpassed their pre-war market share in Great Britain. By 1880 they exported more cotton than they had in 1860. And, by 1891, sharecroppers, family farmers and plantation owners in the United States were growing twice as much cotton as in 1861.

As nation states became more central to the global cotton industry, and as the cotton industry remained important to European economies, European states increasingly also tried to capture and politically control their own cotton-growing territories. With the United States now an important—and eventually the most important—industrial power in the world, Europeans wanted to follow the United States model and control cotton growing territories of their own. Pushed by manufacturers concerned about the security of their cotton supply, European colonial powers embarked upon new cotton-growing projects. No one did so more successfully than Russia, which by 1900 already secured a significant share of its cotton needs from its colonial territories in Central Asia. The Germans followed suit in their western African colony of Togo the British in Egypt, India and throughout Africa and the French, Belgians and Portuguese in their respective African colonies. Even the Japanese built a small cotton-growing complex in their colony, Korea.

Along with this expansion of cotton agriculture, a new wave of violence descended upon large swaths of the global countryside, as colonial powers forced peasants to grow cotton for export. As late as the 1970s in Mozambique, a former Portuguese colony, the word cotton still evoked, according to two historians, “an almost automatic response: suffering.” Slavery may have disappeared from the empire of cotton, but violence and coercion continued. Moreover, the post-war reconstruction of the global cotton-growing countryside provided ever increasing quantities of ever cheaper cotton to industry, but at the same time created huge new risks for rural cultivators, as plunging prices and political repression brought extreme poverty. In India, in the late 19th century, millions of cotton growers starved to death because the crops they grew could not pay for the food they needed. The British medical journal The Lancet estimated that 19 million Indians died in the famines of the late 1890s, most of them cotton growers.

The American Civil War thus marked one of the most important turning points in the history of global capitalism. The last politically powerful group of cotton growers—the planters of the American South—were now marginalized in the global economy, a global economy newly dominated by its industrial actors. More importantly, slavery, which had been so central to the first 80 years of the expansion of a mechanized cotton growing industry—and thus to global capitalism—had ended. New ways of mobilizing the labor of rural cotton-growing cultivators—in the United States and elsewhere—had emerged. War capitalism’s core features—the violent appropriation of the labor of African slaves, the violent expropriation of territories in the Americas by frontier settlers and the violent domination of global trade by armed entrepreneurs—had been replaced by a new world in which states structured sharecropping regimes and wage labor, built infrastructures and penetrated new territories administratively, judicially and militarily. This industrial capitalism contained within itself the violent legacy of war capitalism, and was all too frequently characterized by significant degrees of coercion. Still, it was a fundamentally new moment in capitalism’s long history.

And while today the world’s cotton growing countryside has changed once more, it is still often characterized by extreme poverty, political repression and a powerful presence of the state. In many years, huge government subsidies keep American and European producers in business, while a semi-military unit of the Chinese People’s Liberation Army is perhaps the single most important producer of cotton in the world today. Children still are forced to harvest cotton in some parts of the world. Extreme poverty characterizes the cotton growing areas of western Africa. As many as 110 million households are involved in the growing of cotton worldwide, testifying to the continued importance of the countryside and of agriculture to global capitalism.

As this episode from the endlessly fascinating global history of cotton shows, the significance of the American Civil War went well beyond the borders of the United States, and indeed, can only be fully understood from a global vantage point. And the same applies to the history of capitalism. Only a global perspective allows us to understand how this vastly productive and often violent new system of economic activity came into being—and only a global perspective allows us to understand the origins of the modern world we live in.


Effects of the Civil War

The American Civil War finally came to an end with a victory for the Union on April 9, 1865. Over the next few months, the Confederate forces surrendered in different parts of the country. In course of the war, President Lincoln, under his capacity of being the Commander in Chief of the Army and Navy, had issued the Emancipation Proclamation which declared the freedom of all slaves. As many as 3.5 million blacks were freed from the clutches of slavery during the Civil War. The reconstruction phase, which had begun during the war itself, came to an end in 1877. During the reconstruction phase, the authorities tried to address the issues caused by reunion of states. Special emphasis was given to the act of determining the legal status of the eleven Southern states which seceded from the Union.

As far as the economic effects of the Civil War are concerned, they were by and large in the favor of Northern states. Previously, many policies intended to boost the industrial sector of the United States were not given a nod because they were staunchly opposed by the legislators from the Southern states. When these legislators resigned during secession, the legislators from the Northern states lobbied to approve all the pending policies and gave the industrial sector of the United States that much-needed boost. Similarly, acts like the Morrill Tariff of 1861 and the National Bank Act of 1863, which were introduced just after the Civil War, played a crucial role in the development of the United States.


Watch the video: Economic Effects of the Civil War (January 2022).