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That very well may have been the case, but I don't think we can ever know for certain. Although British warehouses may have been well stocked in 1860 because of recent bumper crops, increases in world-wide demand could have kept consumption up.
My problem with this is that
1) the evidence we have is that supply had exceeded demand, that it took over a year for the surplus inventory in European warehouses to be worked off and
2) commodity items have a well-defined boom-bust cycle extending over all of history. Cotton had been in an extended boom period. Sooner or later, a bust was coming, and the evidence seems to say it was right around the corner in 1861-62-63 (my guess)
Quote:
Originally Posted by cedarstripper
That might be because many Europeans were optimistically thinking the war would be short lived and the next years production would be back towards normal, and that they could ride it out with existing inventory supplemented with mainly Indian cotton.
No, that seems completely at odds with everything I have ever seen on the situation in Europe. It also seems to imply British/French businessmen and leaders (who were more inclined to support the Confederacy anyway) acted against their own perceived best interests out of some form of misty altruism. I'd bet against that.
Quote:
Originally Posted by cedarstripper
This is not important, but I think the 4.1 million bales is being optimistic. It takes two bumper years into the short average. Even the first half of the 1870s only saw production hit 4 million bales once, and that was in 1870, which suggests to me that while the industry was back to being capable of it, consistent crops of that level were still not reliable in the early 1870s, let alone the early 1860s.
It also seems to take into account two years that swing to the downside. Given the constant expansion of acerage under cultivation and the move to new fields, which automatically increase production, this is probably very realistic as an average.
``````````bales in thousands
'58...........3,758,000
'59...........4,508,000
'60...........3,841,000
'61...........4,491,000
==================
Total.......16,598,000 bales..........Average 4,149,500
BTW, the size of a "bale" was changing over the 19th century. I don't think the earlier figures represent 500 pound bales consistently unless someone went back and normalized them. I have seen references to 400 pound bales before the ACW.
"Indeed, in 1860 the textiles industry stood on the crest of a major crisis of overproduction, which would have ushered in this era of stagnation had it not been overshadowed by the Cotton Famine of the 1860s. . .
Thanks or the input. This is certainly in agreement with Tim's opinion.
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[Immediately after the War], misled by the high famine prices that obscured the demand situation, Manchester merchants anticipated a return to pre-Civil War prosperity. They found, however, that when American cotton returned, demand for British cotton goods had vanished. By June of 1865, shirtings were 'almost unsaleable.' . .
This is a slightly different event. Its interesting to read, but I'm not sure how to reconcile it with some other records. The Feb., 1866 issue of DeBows published some tables of cotton statistics (Department of Commerce) including cotton prices:
year........................price per/bale
1859-60......................$48.50
1860-61.......................50.00
1861-62.......................45.50
1862-63......................231.32
1863-64......................356.20
1864-65......................270.54
The April issue published a table of Cotton Imports into Great Britian, in which 2,587,000 bales were imported during 1864 (at very premium prices) and in 1865, the imports increased to 2,755,000 bales. This is not the kind of trade you might expect if cotton textiles manufactures couldn't get rid of their product.
As I understand the situation in 1865, foreign growers (India, Egypt, Brazil, China, Japan) who had been lured by the high prices, expected in the Spring that the war would continue on through the year, and they planted anticipating being Britians suppliers with another year of high prices. India alone had supplied GB with about a million bales per year during the war. When the ACW came to an end, about 2.1 million bales in the US, consisting of the 1865 crop and bales in storage caused the price to drop (perhaps plummet). Where it leveled off at, I'm not sure of right now, but it certainly had a long way to go to return to the 1860 price tag. The loss of great profits and market share with the reappearance of better quality US cotton caused the foreign growers to adjust, and in 1866 they were back out of the cotton game or back to something more like pre-war practices. For instance, China and Japan had quit exporting cotton and began importing from India.
Does Gavin Wright have any other details about this period?
No, that seems completely at odds with everything I have ever seen on the situation in Europe. It also seems to imply British/French businessmen and leaders (who were more inclined to support the Confederacy anyway) acted against their own perceived best interests out of some form of misty altruism. I'd bet against that.
I was referring to the sentiment (which I had read in 1861 London newspapers) that British textile did not necessarily have to panic over the conflict in the US because it would likely be over with quickly enough so as not to severely disrupt the cotton industry. They were well stocked in inventory and had for several years been trying to develop alternate sources for cotton. Indian cotton was inferior but was made suitable by mixing with American cotton, meaning that existing stocks could be stretched out if the war did happen to drag into 1862. I'd say that was being optimistic on their part, but I confess I don't follow how you get "misty altruism" out of that.
Quote:
It also seems to take into account two years that swing to the downside.
Downside? Those two years were also record high years that just didn't break the 4 million mark. I'll certainly concede though that, aside from a few blips, cotton production fairly steadily rose during the '50s and that something in the range of a bit over 4 million bales is a fair expectation for the 1860s.
Quote:
BTW, the size of a "bale" was changing over the 19th century. I don't think the earlier figures represent 500 pound bales consistently unless someone went back and normalized them. I have seen references to 400 pound bales before the ACW.
I'm also used to 400lb bales, but the Agriculture report specifically listed 500lb bales, and so I noted that. A comment in a report in an 1866 DeBows claimed that the present bales were losing weight compared to bales of previous years due to "wastage" and "stealage" and that it "may be questioned if 2,000,000 bales now exceeds the weight of 1,800,000 bales before the war."
Assuming US production stayed at the levels of 1858-61 (roughly 4.1 million bales) and demand stayed about where it was in the early 1860s, a bust cycle is inevitable in the cotton market. Only the Civil War prevented it from happening, with a glut in the warehouses and new supply becoming available overseas. The questions become how soon and and how bad only.
Quote:
Originally Posted by cedarstripper
This is not important, but I think the 4.1 million bales is being optimistic. It takes two bumper years into the short average. Even the first half of the 1870s only saw production hit 4 million bales once, and that was in 1870, which suggests to me that while the industry was back to being capable of it, consistent crops of that level were still not reliable in the early 1870s, let alone the early 1860s.
Quote:
Originally Posted by trice
It also seems to take into account two years that swing to the downside. Given the constant expansion of acerage under cultivation and the move to new fields, which automatically increase production, this is probably very realistic as an average.
``````````bales in thousands
'58...........3,758,000
'59...........4,508,000
'60...........3,841,000
'61...........4,491,000
==================
Total.......16,598,000 bales..........Average 4,149,500
Quote:
Originally Posted by cedarstripper
Downside? Those two years were also record high years that just didn't break the 4 million mark. I'll certainly concede though that, aside from a few blips, cotton production fairly steadily rose during the '50s and that something in the range of a bit over 4 million bales is a fair expectation for the 1860s.
Cedarstripper,
You have lost me here. You tell me that my estimate of 4.1 million bales is "optimistic", and then you tell me "that something in the range of a bit over 4 million bales is a fair expectation for the 1860s". Which one is it, and how much off do you think my estimate of 4.1 million bales is? What is the difference you are objecting to?
Also, yes, that 1859 figure given above probably is a swing to the downside, given the constant expansion to new lands that was ongoing throughout this period.
I'm also used to 400lb bales, but the Agriculture report specifically listed 500lb bales, and so I noted that. A comment in a report in an 1866 DeBows claimed that the present bales were losing weight compared to bales of previous years due to "wastage" and "stealage" and that it "may be questioned if 2,000,000 bales now exceeds the weight of 1,800,000 bales before the war."
My guess: this is "code" for the disruption and improper procedures caused by the war -- and also refers to what we can probably call shady dealings (short weights, theft, fraud, etc.) Some of that would be normal for such a period of re-adjustment, some of it would be the usual "there's a sucker born every minute" variety of business dealings when the greedy are looking for a quick buck, and some would simply be ex-Confederates glad enough to shake a few extra dollars out of those Yankees carperbaggers.
I was referring to the sentiment (which I had read in 1861 London newspapers) that British textile did not necessarily have to panic over the conflict in the US because it would likely be over with quickly enough so as not to severely disrupt the cotton industry.
I may have misread your comment, then. But, if so, that would argue that there was such a large glut of cotton and cotton-products in European warehouses that they felt they could easily go a year or two with no American supply at all -- at a time when US cotton was some 85% of the world supply.
That pretty well bashes the "King Cotton" myth for starters.
It also strongly implies that, if there were no interruption of US cotton supply in 1861-62 from the Civil War, there would have been a large over-supply condition with a consequent crash in cotton prices. This is pretty much what I have been saying all along, and seems to be what the references Eleckratig is supplying say as well.
Quote:
Originally Posted by cedarstripper
They were well stocked in inventory and had for several years been trying to develop alternate sources for cotton. Indian cotton was inferior but was made suitable by mixing with American cotton, meaning that existing stocks could be stretched out if the war did happen to drag into 1862. I'd say that was being optimistic on their part, but I confess I don't follow how you get "misty altruism" out of that.
It might be possible to think that overseas before Bull Run in July of 1861. In the aftermath of that, it is fairly obvious that the war is going into 1862, and by early in 1862 quite obvious the supply will be interupted throughout the year, at a minimum. By July, the world has seen Henry & Donelson, Shiloh, Seven Pines, Jackson's Valley Campaign, the Fall of New Orleans, and the Seven Days. By the Fall, they have seen 2nd Bull Run, Antietam, Corinth & Iuka, Bragg's Inavsion of Kentucky, and Perryville. The Union blockade is clamping down harder and harder, Charleston is under siege, Savannah is closed by the fall of Ft. Pulaski, there are Union troops on the NC coast. Where in there do you think the Europeans swung over to understanding the interruption in the US cotton supply (85% of the world supply) would be prolonged?
But also, doesn't what you are saying here simply support my contention that there would have ben a serious correction in cotton prices do to oversupply conditions in the early 1860s without the Civil War?
You have lost me here. You tell me that my estimate of 4.1 million bales is "optimistic", and then you tell me "that something in the range of a bit over 4 million bales is a fair expectation for the 1860s". Which one is it, and how much off do you think my estimate of 4.1 million bales is? What is the difference you are objecting to?
Its called a concession. When looking over the production figures for the 1850s I see crops go up and down. There is nothing to indicate that acreage planted each year goes up and down with it, and I am not of the opinion that during this time there was any effort to control the market price by manipulating the total output....so, that led to my "Mother Nature" comment, which had nothing to do with implying she was responsible for the reductions during or post war. It is possible and likely that she is responsible for part of the flucuations both positively and negatively. Looking at the annual yields again I conceded that, annual flucuations aside, there is a fairly consistent increase in production that could have left expectations of production ability at around >4 million bales in early 1860. The four years you chose to average do stand apart from the four years previous to them, but I accept that they are the most relevant to predicticting the next four years.
Originally Posted by cedarstripper I was referring to the sentiment (which I had read in 1861 London newspapers) that British textile did not necessarily have to panic over the conflict in the US because it would likely be over with quickly enough so as not to severely disrupt the cotton industry.
Quote:
Originally Posted by trice
I may have misread your comment, then. But, if so, that would argue that there was such a large glut of cotton and cotton-products in European warehouses that they felt they could easily go a year or two with no American supply at all -- at a time when US cotton was some 85% of the world supply.
That pretty well bashes the "King Cotton" myth for starters.
It also strongly implies that, if there were no interruption of US cotton supply in 1861-62 from the Civil War, there would have been a large over-supply condition with a consequent crash in cotton prices. This is pretty much what I have been saying all along, and seems to be what the references Eleckratig is supplying say as well.
I don't see how a prediction of a short-lived war makes the above implications at all. It merely shows a dreadfully wrong opinion that Americans would soon tire of this war and things would be back to bearable by the time of the harvest.
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But also, doesn't what you are saying here simply support my contention that there would have ben a serious correction in cotton prices do to oversupply conditions in the early 1860s without the Civil War?
Not necessarily. It merely states that British warehouses were full to bursting with raw cotton. Even in times of continued high demand this would be the conditions after a bumper harvest, and probably had been for the last four years. Even an assumption that British textile would ride the storm well if the war ran on into the next year does not rule out the supplement of foreign cotton, rise in prices slowing consumption, existing inventories of yarns, shifts to other materials, and the continuance of shipments from the US. I had just the other day read a contemporary comment that the enforcement of the blockade was in the first few months so ineffective, and blockade runners were successful enough, that most of the existing stock of cotton had managed to be shipped. I think these are some other factors that suggest a "glut' is not the only conclusion.
What is not accounted for in this discussion are expanding markets (e.g. Russia, Germany, Poland, China, India) with the ability to buy cotton textiles or re-exported raw cotton and an increasing domestic market for raw cotton. The extremely high price of cotton caused by the war also should have acted to shut down the bulk of those markets for finished textiles, so its impossible for me to guage the ability of those consumers to keep demand up equal or close to supply to determine just how serious a correction, if any, might have been.
It also strongly implies that, if there were no interruption of US cotton supply in 1861-62 from the Civil War, there would have been a large over-supply condition with a consequent crash in cotton prices. This is pretty much what I have been saying all along, and seems to be what the references Eleckratig is supplying say as well.
Quote:
Originally Posted by cedarstripper
I don't see how a prediction of a short-lived war makes the above implications at all. It merely shows a dreadfully wrong opinion that Americans would soon tire of this war and things would be back to bearable by the time of the harvest.
I think you are trying to have it all ways at once here.
If the British (who bought almost half the world supply of raw cotton) and other Europeans were so serenely confident that they could weather the interruption of a short war, it argues they had a glut of raw cotton and/or finished goods in their warehouses in 1861. If they did not, they'd be looking at immediately shutting factories and leaving the store-shelves empty in 1861. But it appears they thought the potential loss of 85% of the world supply of raw cotton for a year or two was no big deal and would not interrupt their manufacturing and commercial enterprises in 1861, and possibly 1862.
If indeed they had such an inventory surplus, the collapse of cotton prices in 1861-62 would be guaranteed without an interruption in supply such as caused by the Civil War. It would, in fact, be the reason the European cotton brokers and manufacturers were not immediately concerned about this -- it would have been a welcome chance for them to reduce inventory without cutting prices.
In short, the ease with which the Europeans could accept this is virtual proof of the looming oversupply condition.
Further, your own figures show that even after it became obvious that the war would continue for a long time (i.e., well into 1862 at a minimum), there was very little movement in cotton prices. This also argues that there was a large inventory of cotton to work down, and that in peacetime conditions there would have been a serious oversupply of cotton in 1861-62, leading to a collapse in prices.
For anyone following this thread, here are a few links to online sources that provide background information on world cotton in and around the American Civil War:
"Emancipation and Empire: Reconstructing the Worldwide Web of Cotton Production in the Age of the American Civil War" by SVEN BECKERT in The American Historical Review, 2004 http://www.historycooperative.org/jo...5/beckert.html
Extract from the above: =====
Simple historical narratives, however inspiring, often conceal a more complex reality. Economic historians like W. O. Henderson, Eugene Brady and Douglas Farnie, have shown, what a contemporary economist, W. T. M. Torrens hinted, that, with or without the American Civil War, the Lancashire cotton industry would have suffered a depression in the early 1860's due to massive over production and speculation in the late 1850's.
...
"The Cotton Famine is an event that has burnt itself into the history of Lancashire." (London Quarterly Review. January 1865).
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