Before its civil war, America supplied 80 per cent of the raw material for Britain’s largest industry, the cotton trade. During the war, this fell to almost zero. Jim Powell’s new book Losing the Thread: Cotton, Liverpool and the American Civil War examines what happened to this trade and to the Liverpool cotton market, its beneficiaries and its victims, during the war.

Jim has produced two videos discussing topics covered in his book with Meredith Wheeler, for many years a writer/producer for ABC News in New York and London. Both videos are available to watch on YouTube: the first covers The Civil War and Britain’s Cotton Trade, and the second The Civil War and Anglo-American Relations. This is the third of four blog posts based on the transcripts of the videos. The original post can be found on Jim’s website.

MW   Just to get an overview, how much of your book would you say concerns Britain during the American Civil War, and how much concerns the United States?

JP You can’t really separate the two. As Brian Schoen has written, “without cotton and the international demand for it, there would not have been secession or a Civil War.”

There was an unbroken umbilical cord that bound the two countries together, and that cord was woven from cotton. The narrative may mostly be about Britain, but standing silently behind every page is America. It is a constant presence.

The book is primarily about the British cotton trade during the war. But what most influenced that trade was events in America, while events in America were influenced in turn by reactions in Britain.

I would go further and say that you can’t fully comprehend the civil war without understanding its British dimension. The war was not only about the battles; it was about the political and economic background to the conflict, and that, to a large extent, revolved around cotton.

MW   There was anger at Britain’s neutrality during the American Civil War. It didn’t side with either the North or the South. Can you expand on that?

JP   Both sides wanted, and perhaps expected, Britain’s unequivocal support. The British Prime Minister, Lord Palmerston, put it aptly when he said that the two sides each felt “some little stinging resentment on account of that neutrality which they both of them in some degree characterise as unfriendliness”.

Britain did remain officially neutral during the war, but neutrality meant something different to Britain than to either side in America. Also, there certainly was unfriendliness in Britain towards both sides.

It is generally felt by historians, and I agree, that a majority in Britain favoured the Union. However, many people disliked both sides. They disliked the South principally because of slavery. They disliked the North for a number of reasons: the hostility towards Britain of the New York press, the Union’s designs on Canada, its opposition to free trade, the fact that America was republican and anti-monarchist. Many reasons.

However, a neutral Britain still wielded considerable influence on events in America.

MW   How did that influence manifest itself?

JP   Most obviously on the Confederate side, and most immediately in the response to the ‘King Cotton’ strategy. The South believed that Britain was so economically dependent on its cotton that it would be forced to recognise the Confederacy as an independent nation. In June 1861, the Charleston Mercury declared that “the cards are in our hands, and we intend to play them out to the bankruptcy of every cotton factory in Great Britain and France, or the acknowledgment of our independence.”

Jefferson Davis regarded British recognition as an assumed fact. Without that assumption, secession – and the civil war – may never have happened.

MW   And why did Britain never recognize the Confederacy? And indeed, why did the leaders in the South think that they ever would?

JP   The economies of the Southern states were wholly dependent on cotton. There was little industry and almost no commercial infrastructure. In 1860, 85% of America’s chartered banks were in the North and 90 per cent of its industrial output. As a result, much of the South’s cotton income ended up in the hands of Northern banks and merchants, which was one of the main grievances of the South before secession.

The mistake made by Confederate leaders was to believe that their dependence on cotton was mirrored in Britain. They were encouraged in this belief by the British cotton trade, and by the politicians associated with them. Henry Ashworth, a major mill-owner, told a meeting that “the entire failure of a cotton crop, should it ever occur, would utterly destroy, and perhaps for ever, all the manufacturing prosperity we possess.”

MW   Was Henry Ashworth overstating the case?

JP   Yes. Just a bit. Cotton may have been by far the most important industry in Britain at the time, but it was by no means the only one. Britain was economically diverse, unlike the Confederacy. 16% of the population may have been dependent on cotton for its income, but that meant that 84% was not. And this 84% was doing extremely well in the 1860s.

So, from an economic viewpoint, there was no compelling reason for Britain to recognise the Confederacy. And, although the issue was much discussed, there was no compelling political reason either, not least because of the depth of British hostility to slavery.

MW   Is it true that the South misjudged the timing of this cotton strategy, and that in fact they’d grown too much cotton before the war – so there was a glut – which undermined their influence over Britain’s policies?

JP   No, that isn’t true. And there has been a parallel argument in Britain, with historians claiming that British mills produced far too many cotton goods in the three years before the war. Put together, the allegation is of a glut of both raw cotton and cotton goods on the eve of the war.

I have analysed this allegation in forensic detail and it is utterly untrue. All the evidence shows that, before the war, both the supply of raw cotton and the manufacture of cotton goods was broadly in line with international demand.

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Find out more about Jim Powell’s book Losing the Thread on our website.

Read all four posts in this series, or watch the video which these posts are based on below:

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