Let’s talk about Blockade Runners’ role in the Confederate economy and their economic impact. These unarmed merchant vessels – owned privately or by the state or Confederate governments – carried cargoes worth thousands of dollars in and out of the blockaded Southern states. Today, we’ll do a “twenty-thousand” foot overview of King Cotton, the gross value of the cargoes, who was paying for the cargoes, and what happened (economically) when they were captured.
King Cotton Reigns…Or Rots?
Jefferson Davis (President of the Confederacy) and other Southern politicians had a theory. They thought European textile manufactures were dependent on Southern cotton, and they developed a theory of King Cotton diplomacy. Basically, it surmised that European manufacturers would need that Southern-grown cotton so much that they would pressure their governments into recognizing the Confederate States of America and joining the conflict in favor of King Cotton. This theory would test Southern King Cotton’s power globally.
Unfortunately for Jefferson Davis and the Confederate economy, the European manufacturers found other global sources for their raw cotton and just worked around the American conflict. Apparently, American King Cotton wasn’t as powerful in the global market as everyone wanted to believe.
And that led to the downfall of King Cotton. With the Union blockade in place and without official recognition or aid from Europe, the Confederate Economy plunged downward, strangled by a product that they couldn’t export, couldn’t eat, and couldn’t manufacture with large-scale effectiveness. Bales of cotton spoiled on the docks. There weren’t enough blockade runners to get it shipped out.
However, the active blockade runners did haul cotton as the Southern export and bargaining chip. It was a way to keep some credit and for a while helped some aspects of the Confederate economy to continue limping along.
And How Much Was It Worth?
Bales of steam-pressed cotton were loaded onto the runners leaving the Confederate ports. The ships carried between 600-1200 bales of cotton, depending on the ship’s size, and each bale weighed 500-600 pounds. A boat load of cotton could be worth 30,000 English pounds or equivalent to $39,300 of modern U.S. Currency. Some records suggest that only about 400,000 bales of cotton were exported through the blockade during the war.
To Whom Shall I Send This Bill?
Umm…how about credit? Many Southern companies operated their blockade running export/import business on a credit system. They promised to pay – eventually – in cotton. That was based on the assumption that the South would win the war and continue to use slavery (presumably) to continue to grow the cash crop and pay off the debts.
For example: during the final six months of the war, one company claimed that $1,500,000 dollars worth of Confederate cotton had been sent to England to buy $45,000,000 worth of war materials. See a problem?
Sounds a little risky? Read on…
What Do You Mean? I Don’t Get Paid?
The Confederacy lost the war. The Southern economy was ruined. Slavery was abolished. Fields were ruined. How on earth were the Southern companies going to pay their debts?
As a general rule, they didn’t. Bankruptcy or suspicious company reorganization was typical. And that didn’t make Europe or anyone happy…
More on Europe’s open and secret roles in blockade running next week!
P.S. I know this isn’t comprehensive and it’s a simple overview, but I hope it helps to illustrate the high stakes involved for merchants and a layer of the economy tied to blockade runners.