Cotton was King Until Slavery was Outsourced

By Jay Holmes

Today, Western nations are forced to consider the price and flow of crude oil in all foreign policy decisions concerning the Middle East. From Algeria to Iran, Oil is King. However, back in 1861, petroleum was not yet a major commodity for world markets.

America’s South had developed an important economic position in world markets by harvesting and exporting cotton to European markets. In 1860, the United States exported over four million bales of cotton to Europe. Each bale weighed 500 pounds. That’s a lot of cotton.

The largest importer of US cotton exports was Great Britain. American cotton was one of the two major ingredients in profitable textile mills in England. The other critical ingredient was cheap labor, and the UK had plenty of that, as well. The cash that flowed into the South allowed it to import goods from Northern factories, mills and foundries. The cotton formula was simple, and the Southern states had the long growing season and four million slaves to make cotton farming highly profitable. Many Southern leaders saw themselves as key players in the global market. As far as they were concerned, cotton was essential to Europe’s economy.

Today when we look back at the Civil War, we might wonder why the less populated, less industrialized South would have considered a war with its Northern neighbors. In 1860, Southern states had a population of nine million citizens and nearly four million slaves. The Union population was twenty-two million. The Northern states could boast of having ten times as much manufacturing production as the South. In particular, Southern states produced almost no military equipment or firearms.

To add to the disparity, the Northern states operated with a single, standard railroad gauge covering nearly 98% of Northern routes. An engine in New York could, and did, run just as easily in Michigan. In the South, one symptom of “states rights” parochialism could be seen in its railroads. It had railroads but no railroad system. An individual investor built in any fashion that he saw fit. An engine in Virginia would not only not work in Mississippi, it likely wouldn’t even be able to traverse the state of Virginia. That lack of cooperative planning and central regulation haunted the South throughout the duration of the Confederacy.

On the eve of the American Civil War, the North had the guns, the manufacturing capability and the manpower. The South had cotton and four million slaves.  When the odds are considered, the North would have seemed to have a clear advantage. The South was counting on three factors not normally reported in censuses and almanacs. The South was counting on fighting a defensive war and had no need to invade the North. The Union army would have to invade the South to recapture it and force it’s re-entry into the Union. Given the weapons available in 1861, being outnumbered two and a half to one was considered an even match. Trained military leaders with Southern sympathies would not have encouraged secession from the Union if a secession would have required “conquering” Northern states.

A second subtle factor that Southern leaders calculated nearly correctly was the unwillingness of “lazy city folks” in the North to enter military service and campaign in the South to free slaves that, in the South’s estimation, most of them cared nothing about.

The third “ace up the sleeve” was the 1861 equivalent of an OPEC oil embargo. The South knew, or thought they knew, that European nations would not tolerate an interruption in cotton trade. In weighing the odds for war, many Southern leaders were confident that Europe would threaten intervention and coerce the US to accept the Confederate’s independence. Guns, ammunition, and the massive mountains of manufactured goods required to feed the glutinous gods of war would flow from Europe like oxen to the sacrificial altar. That was the plan.


Scarlett O’Hara at the Barbecue enjoying cotton profits

Somewhere between the certainty of a bright Confederate future and Appomattox Courthouse, something went wrong for the South. On a pleasant spring day on April 12, 1861 amidst a carnival atmosphere with well-dressed, picnicking revelers, Confederate General Pierre Gustave Tautant Beauregard ordered his artillery to open fire on Union occupied Fort Sumter in the Charleston harbor in South Carolina. A merry time was had by all except for Union Colonel Anderson and the men trapped in the fort. After thirty-four hours of bombardment, Anderson was allowed to withdraw his men by way of a Union Navy ship, and in exchange for safe passage, the remains of the fort were surrendered to the Confederacy. Beauregard was hailed as a Caesar by the jubilant picnickers and by their cousins across the South. Four hellish years and 630,000 dead Americans later, the spring picnic seemed somewhat less splendid.

The Southerners had calculated the odds of defensive action correctly. Their basic suppositions about the size of the Union forces needed were accurate enough. What was less accurate was their supposition that Northern couch potatoes would not fight. They did. Even after suffering the horrendous casualties while attacking prepared positions at numerous battles, the North still managed to fill the ranks of the Union Army and equip it. The Southerners had not calculated that Northerners would be willing to pay such a high price in blood to defeat the Confederacy. They were wrong. The South’s mighty monarch King Cotton had an accidental hand in assisting Union Army recruiters.

The Confederacy was not altogether surprised at England’s reluctance to send its navy to defeat Union Navy blockade of its ports. The South was accustomed to life in a democracy and was prepared to coax the Parliament and Queen into seeing the “Southern light.” Queen Victoria considered slavery an abomination and was reluctant to defend the interests of wealthy slave owners in a fight against the US. Southerners played the cotton card. The South stopped exporting cotton to England.

An island nation with mothers who can’t cook, artists who can barely paint , and army officers who buy their commissions does not come to rule the waves by being stupid. Indigestion aside, Great Britain saw that one coming. Great Britain had been at the trade game for a long time, and they were good at it. Unlike the British Army, the British Navy was a well-run meritocracy, and it communicated well with British governments and merchant marine by way of its Admiralty staff. In 1860, a bumper crop of cotton glutted the markets, and England was organized and disciplined enough to invest substantial long term capital for the stockpiling of cotton.

Far from London, and even farther from the cotton fields of the South, British colonial officials in Bombay saw an opportunity in the chaos caused by the coming cotton embargo that they envisioned. The Bombay area had the perfect climate and soil for cotton growing. Better yet, they had something nearly better than slaves. They had cheap, disposable workers who showed up willingly and worked for less than it coast to operate an American slave. England outsourced.

While the shortage of cotton imports from the Confederacy did hurt England, and thousands of English laborers were laid off, the problem was short-lived. Interestingly, even after losing their textile jobs, the British working class remained strongly anti-slavery and pro-Union. Thousands of unemployed Irish, English, and Germans immigrated to the Northern US. Waiting for them on the docks were Army recruiters promising citizenship and bonuses to enlistees. By 1863, many Union regiments had immigrant majorities in their ranks.

Cotton production in India, Egypt and Africa grew quickly. By 1863, England had little concern for what happened to the mountains of cotton bales being stockpiled in the Confederacy. The guns, ammunition, and gold were not forthcoming from Europe except at high prices. Cotton was King only in the mind of the self-disillusioned king.

The lack of military intervention by Europe on behalf of the Confederacy was not the only factor that caused the defeat of the Confederacy, but it was a huge one. The South never intended to have to inflict an outright defeat on the Northern states, but it could not weather a prolonged standoff without help from Europe. That help never came. Cotton was, in fact, not quite king. It was nothing more than an outsource-able commodity.

A century later, Northern labor unions that held so much sway over industrial operations in the Steel Belt would have done well to remember what happened to King Cotton. It turns out that neither steel nor overpriced, badly assembled automobiles were king, either. They, too, were outsourced.

Across the South and at Gettysburg, Pennsylvania gravestones mark the resting places of silent witnesses to a war fomented in ignorance and arrogance. Cotton, the plantation elites, and the American President who had to fight almost more against his Northern cohorts than against the Confederates are all gone. The great-grandsons of the slaves remain, and, although the reconstruction and social evolution have yet to be completed, the Union remains, as well.

Do you have any questions about the role of Not-So King Cotton in the Civil War? What do you think we take for granted in the US today that could be outsourced?


14 comments on “Cotton was King Until Slavery was Outsourced

  1. Kerry Meacham says:

    Wow Piper, great blog on how outsourcing isn’t a “Johnny come lately” problem. I never considered the outsourcing issues in the Civil War. I’m in industry, and it’s always the people trying to defend their position who end up getting killed. Defense is almost always a terrible position to be in, whether it be a battle, an industry, or a business. Awesome post.

  2. kadja1 says:

    This was very interesting…I never knew about the outsourcing Britain did. Are you going to follow up on this article with how the reconstruction affected the South? That would be interesting…I do not know what the US could outsource now. China ended up with most of the steel industry years ago…A lot is being outsourced to India now…More automakers will probably end up outsourcing since the unions have priced themselves out of the market at a ridiculous rate. Just guessing though. If they wanted to, they could simply move the auto manufacturing to non-union states, though. That way they can definitely get cheaper labor right here. Toyota already moved one plant from Washington to San Antonio because of this.

    • JH says:

      Thank you Kadja1. I am working on several topics simultaneously. I had not anticipated an article on reconstruction but I will research it as time allows. Over the years I have come to realize why my pre-university history teachers liked to explain “reconstruction” in less than twenty minutes. It’s a grueling and painful aspect of American hostory. It’s also an important one. Your request has prompted an overdue call to a historian friend that specializes in the civil war. I will have him point me toward some decent sources.

      Most of my work is concentrated on mid-eastern events right now. The “intervention” has been like “psycho-therapy” for my battered brain. As time allows I will honor your request.

  3. kadja1 says:

    Wait a minute–I may have the state wrong on that last comment–it may have been Oregon that the Toyota plant was in rather than Washington…I don’t remember because it’s been a while…Now for my coffee… 😀

  4. JH says:

    Hmm, nobody has challenged the casualty figures yet. I was expecting a dozen angry responses by now. Civil war readers must not have found my hiding place here. Casualty figures for the civil war are fairly hotly debated and the numbers are wide ranging. Horrified readers, please take into account that I include soldiers that died of disease in the malarial hell holes that they often occupied between battles.

  5. Piper Bayard says:

    I find the comparison between cotton and oil to be a fascinating thought. The South overplayed its hand. I wonder how often Middle Eastern despots base their own moves on the notion that we can’t make do without them. For example, it seems Gadhafi is guilty of the same unrealistic estimation of his contribution that the South made.

  6. This is a really interesting breakdown. I’ll admit the Civil War isn’t my most studied moment in US history, but I always find the stories fascinating.

  7. Hmm… A lot of things in the U.S. could be outsourced. It’s a matter of who has the cheapest resources without altering the quality too much. The call centers are already outsourced. Healthcare and teaching would soon be outsourced, too. People could have a teacher via the web. They’re also using AI in order to allow doctors to operate on patients thousands of miles away (though the technology isn’t perfect yet). Still, it’s a matter of time.

    • JH says:

      “without altering the quality too much” The quality is often reduced. I avoid doing business with companies that require me to speak to someone who struggles to read memorized English sentances from a cheat sheet. I cancelled a $3,000.00 order from Hewlett Packard a few months ago because the service was intolerably bad. Since they made it a hellish abuse of my time for me to attempt to fix a mistake that they made on my order, I had no intention of leaving myself in a position to need their help if a hardware problem occured. If that’s what it was like when I still had a way to get my cash back, imagine what it would have been like once my cash was beyond my reach.

      Hewlett Packard and similar companies are not intending to out-perform their competition. They know the guys that run the other companies. They are all relying on the competition to be even worse than them. Rather than a race to the top, too many American and Western companies are in a backward race to the bottom. The last one to the bottom “wins.” The one outcome of the race that is predictable is that you and I don’t win.

      I am paying high American prices for the goods that I purchase. But most companies want to give me no service when their product is defective. The poor people who work in call centers in the USA have very hard jobs and are generally abused by their companies, but the even less fortunate foreigners who work in call centers for US companies have near slave like conditions. The outsourcing of the slaves continues today.

      Steve Jobs of Apple is often portrayed as some sort of new age business Messiah, yet the iphone is made in China in factories where work place suicides are frequent. We have not been lead to the promised land. We should not follow.

  8. M.E. Anders says:

    I never fully understood the Southern railroad predicament till I read this post – thanks, Holmes.

  9. JH says:

    Glad you liked it.

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