U.S. Greenbacks and the Illicit Memphis Cotton Trade

I think Hurlbut's order is better understood as an embargo against coin heading south. He does not require people to accept Greenbacks; they may receive back "as an equivalent such currency as they may choose" - i.e. U.S. notes or the outstanding Treasury bills that were receivable as tax payments. A comparison that may be useful was the order to U.S. troops in RVN requiring them to use MPC and not bring U.S. currency into the country.
Excellent analogy. With the locals in Vietnam you got a far better deal in any "transaction" when using MPC over the dong and the best deal when using the U.S. dollar.
 
Here is a couple of pages pp105 pp106 from Flawed Victory by Barney
Any idea of how much cotton was sold to the north?

5 copy.jpg
 
The phrase "consigned to foreign purchasers" is troubling. Consigned by whom? The statistic of 9/10th implies that cotton exports through the blockade were able to continue the pre-war scale of the trade. That seems highly doubtful based on the testimony of the Brits.

According to the people at the Liverpool Museum and their 2015 Exhibition regarding Abercrombie Square: "When the Civil War began, the United States supplied about eighty percent of Britain’s raw cotton, and almost all of it arrived through the port of Liverpool. As a result of the Union’s blockade and the Confederacy's embargo, this figure fell to almost zero in August 1861, and American cotton did not exceed three percent of British imports while the war lasted. Although British merchants could obtain cotton from other regions, such as India and Egypt, Britain still received less than fifty percent of the raw material it needed during the war. As a result, mills closed, workers lost their jobs, and England's cotton manufacturing districts in the counties of Lancashire and Cheshire experienced widespread poverty."

https://ldhi.library.cofc.edu/exhibits/show/liverpools-abercromby-square/introduction

https://ldhi.library.cofc.edu/exhib.../britain-and-us-civil-war/impact-cotton-trade

https://ldhi.library.cofc.edu/exhib...e/britain-and-us-civil-war/profiting-from-war
 
The phrase "consigned to foreign purchasers" is troubling. Consigned by whom? The statistic of 9/10th implies that cotton exports through the blockade were able to continue the pre-war scale of the trade. That seems highly doubtful based on the testimony of the Brits.

According to the people at the Liverpool Museum and their 2015 Exhibition regarding Abercrombie Square: "When the Civil War began, the United States supplied about eighty percent of Britain’s raw cotton, and almost all of it arrived through the port of Liverpool. As a result of the Union’s blockade and the Confederacy's embargo, this figure fell to almost zero in August 1861, and American cotton did not exceed three percent of British imports while the war lasted. Although British merchants could obtain cotton from other regions, such as India and Egypt, Britain still received less than fifty percent of the raw material it needed during the war. As a result, mills closed, workers lost their jobs, and England's cotton manufacturing districts in the counties of Lancashire and Cheshire experienced widespread poverty."
Below are two different articles printed in the 10 Jul 1863 issue of the "Chicago Daily Tribune." The first article, was related to conversations and speeches being made in London, regarding Confederate cotton and how the U.K. was looking for other sources to make up the shortages being experienced there. Two of those places being India and Egypt, which did increase their output of cotton as much as seventy percent, to help supply the British market. The sources used for the article came from recent papers from London which had just come over on the Cunard Steamer, and made their way to the Chicago Daily Tribune editorial department. The second article was regarding the Texas - Mexico trade route, known as the "Rio Grande crossings," through which much Confederate cotton was transported, with Mexico being one of their largest trade partners for cotton during the war.

The first article, attached below, is very interesting as it reveals that the reason for the shortage, in addition to the embargo and blockade, went deeper to the manufacturing of the crop itself, which left too few young men back in the South to properly raise and harvest the cotton at pre-war numbers, primarily because so many were at the front fighting the war, so there was less cotton available during the war. Then to add to the shortage, much of it was being captured or burned by the Federals on various expeditions and raids being conducted throughout the south, with other supplies of cotton being burned by Confederates, when threatened, as to not leave it behind for the Federals to confiscate and sell on the open market to foreign nations, and use the proceeds against them during the war effort. In the first article it also states that the vast amount of labor regarding the crop in the South was heavily dependent on slave labor, and without that labor, it would not be possible for the south to produce the crop at pre-war levels. The article is a good read, as it really sums up the topic of southern cotton quite well, at least from the perspective of the Brits and how it affected their economy.

Regarding the Texas - Mexico Cotton Trade, during this time in 1863, Napoleon III (France), who had invaded Mexico in 1861, had invited Maximilian, Archduke of Austria, to become Emperor of Mexico, but was not installed as such until 1864. The Confederates were trying their best to make deals with both Napoleon III (France) and Maximillian to "officially" recognize them as well as establish a trade deal regarding southern cotton with France. Mexico was essential to the Confederate States in doing business with the rest of the world, such as Europe, because the U.S. government was not blockading the ports of Mexico, simply because they were not at war with them. Therefore, the Confederate government was sending its cotton and other goods down the Rio Grande river from Texas to various ports in Mexico, which would then be placed on ships and sent out to the rest of the world from there, carrying Confederate cotton and other goods to be purchased and the proceeds being used to supply the Confederacy with what it needed to continue the war effort. Lincoln and Stanton were being very careful in their relations with Mexico and France, at the same time, as not to anger them so much that they would recognize and support the Confederacy, with arms if necessary, and join the war effort on the side of the Confederacy.

The second article stated the following:

"Matters in Texas. Trade Manufactures, Unionism, &c. Correspondence of the New York Herold, 8th (Jul 1863). Trade is not so brisk as it was a few months ago, owing to the restrictions put upon exportation of cotton by the Confederate authorities. Still enough cotton is sold here to procure for the rebels all their military supplies. Powder, saltpetre, army cloth, rope, bagging, &c., leave here almost everyday for the different Rio Grande crossings. You can form some idea of the importance the trade with Mexico has been to Texas by referring to the extracts inclosed. All the Texas papers are freely denouncing the orders interfering with their trade, and it seems the feeling of nearly all, except it be a few contractors and speculators who are pecuniarlly benefitted by them. It is rumored here that all restrictions upon the exportation of cotton have been removed. Should this be the case we can soon expect to see the trade with Texas again grow into the enormous proportions it had assumed a few months ago, and again see the streets of Monterey (Mexico) crowded by train after train, loaded with the very articles that give life and endurance to the rebellion, leaving here daily for the Rio Grande, and from thence to find their way to every part of the Confederacy. The persecutions of Union men in western Texas still continue. A friend at Prechas Negras (a small town opposite Fort Duncan, on the Rio Grande), writes me the following; "A few men reached me here today from San Antonio. They report passing on the roadside , near that town, three men hanging, two Germans and one American. At another place on the road, one of this party says he saw an American hanging. He was a fine looking man and well dressed." Friends lately from San Antonio assure me that there are still a large number of Union men left in western Texas. They are relying much upon the energies of Gen. A. J. Hamilton, and hope that soon, through him, a force will be sent to their assistance."

Before the Civil War, cotton primarily grown in the Southern United States, accounted for about seventy-seven percent of the eight hundred million pounds of cotton used in Great Britain. At the outbreak of the Civil War, cotton, being the most valuable crop of the South, then comprised fifty-nine percent of the exports from the United States. But soon after the war had been declared and the blockading of southern ports had been initiated and with Federal troops encroaching into the major cotton growing areas, the Federals not only stalled the cotton economy but also the foreign relations of the Confederacy. It has been reported that as many as two and one half million bales of cotton were burned in the Southern States during the war to create that cotton shortage.

The first article:

Confederate Cotton (England) - Chicago Daily Tribune- Chicago, IL - 10 Jul 1863.jpg
 
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Any idea of how much cotton was sold to the north?

View attachment 394754

No I don’t. Don’t know if there is any way to tell. Probably commingled with what they produced and stole. They did put tax stamps on it at one point. Again when and what was stamped.

1 something that people don’t realize is the price went up 10 fold. So, quantity was replaced by price.
 
I don't follow the reasoning in the Liverpool publication. First an overproduction of cotton goods had been produced for 3 years previous to the Civil War, and this fact carried with it a stoppage of millwork processing raw cotton, therefore keeping the price of goods from plummeting. How this affected the cotton trade on imports would depend on how much back-stock was still on hand or could be stored for future use at Lancaster. Indian cotton is on the average of 5 pence cheaper per pound in the war years. So on the supply and demand auction to purchase and replenish the cotton stock from one party or the other, would be the choice of availability, commodity, and budgetary desperation, as well as the number of bidders in England. How does this reflect anything at all about quality, quantity, availability, serviceability, and market values being unaffected by the war? I just feel the argument is based upon a mute point of abstraction in mixing statistical criteria so it reflects an argument for debate.
Lubliner.
 
If cotton is stored in a cool and dry warehouse, an ideal storage environment, for more than a year it will start to degrade. If conditions are unsuitable – a hot and humid warehouse, for example – the 'yellowing' will occur after only six weeks. The textile mill towns that developed in New England and the Midlands in England and in France were all chosen because of their favorable local climates. Because cotton could not be stored for long periods of time, cotton growing involved a great deal of just-in-time logistics. In the same way that growers now stage varieties of "fresh" vegetables depending on their growing seasons, cotton producers worked to find periods in the calendar that fit what their land could produce. There was no "back-stock" of any size in the cotton trade; that is why the Confederates thought an embargo would bring Britain and France into the war immediately. What they apparently failed to appreciate was that the the mill owners had an overstock of finished goods. Finished cotton textiles can be inventoried for years without damage or loss as we all know, and Lancashire merchants had 3 years of overproduction to work off in 1861. In the primary source on the subject - The Common Famine in Lancashire - the author W. O. Henderson says buyers who were contracted to receive that year's production found themselves able to offload those shipments of new fiber by re-exporting them to the New England manufacturers. That - and speculation in blockade runners (investors would form consortiums to build and crew ships using the same financial model as whaling ships) - created a speculative market that had less and less to do with actual textile production. By 1864 there was a fully-developed future market that had as little to do with actual shipments as modern futures trading does.
 
If cotton is stored in a cool and dry warehouse, an ideal storage environment, for more than a year it will start to degrade. If conditions are unsuitable – a hot and humid warehouse, for example – the 'yellowing' will occur after only six weeks. The textile mill towns that developed in New England and the Midlands in England and in France were all chosen because of their favorable local climates. Because cotton could not be stored for long periods of time, cotton growing involved a great deal of just-in-time logistics. In the same way that growers now stage varieties of "fresh" vegetables depending on their growing seasons, cotton producers worked to find periods in the calendar that fit what their land could produce. There was no "back-stock" of any size in the cotton trade; that is why the Confederates thought an embargo would bring Britain and France into the war immediately. What they apparently failed to appreciate was that the the mill owners had an overstock of finished goods. Finished cotton textiles can be inventoried for years without damage or loss as we all know, and Lancashire merchants had 3 years of overproduction to work off in 1861. In the primary source on the subject - The Common Famine in Lancashire - the author W. O. Henderson says buyers who were contracted to receive that year's production found themselves able to offload those shipments of new fiber by re-exporting them to the New England manufacturers. That - and speculation in blockade runners (investors would form consortiums to build and crew ships using the same financial model as whaling ships) - created a speculative market that had less and less to do with actual textile production. By 1864 there was a fully-developed future market that had as little to do with actual shipments as modern futures trading does.
Really good in depth answer concerning the cotton trade. I appreciate that. I have always been highly skeptical of statistics and the ability to skew them for any argument. So the reasoning behind the mathematical expressions are much more valuable to my comprehension. Thank you.
Lubliner.
 
Mind boggling? What is so mind boggling that I stated that the greyback was worthless? You said Lincoln traded with southerners with greenbacks to make them loyalists. What else could have he used to buy cotton, or was Lincoln's objective just to buy cotton with American money to win southerners over? Where was the southern going to use the greenback outside Union occupied territory? Never mind I agree with you, Lincoln felt bad for the down trodden people of the south, so he threw them a bone by trading with them so they would not actually starve to death.
Lincoln suggested trading firearms and ammunition for cotton.
 
Lincoln suggested trading firearms and ammunition for cotton.

Not quite. Lincoln was rationalizing that gold and cotton prices were much higher due to the war and the Confederates were making more money on one bale of cotton than they were before the war on six bales. For every bale that a Northern buyer would purchase meant one less bale the Confederacy could export for guns and ammunition. Lincoln felt it was better for the Confederacy to be able to buy just the guns rather "than let him, as now, get both guns and ammunition for it."
 
Not quite. Lincoln was rationalizing that gold and cotton prices were much higher due to the war and the Confederates were making more money on one bale of cotton than they were before the war on six bales. For every bale that a Northern buyer would purchase meant one less bale the Confederacy could export for guns and ammunition. Lincoln felt it was better for the Confederacy to be able to buy just the guns rather "than let him, as now, get both guns and ammunition for it."
What was worth more, Greenbacks or Gold.

Obvious reasons the Federal Government didn’t want the Confederacy to have Gold. Yankees processed Cotton, Helped to keep a section of their economy viable. Also exported Cotton to England for Gold, which they used Gold to pay the coupon on their Bonds. Helped to keep poor Brits Loyal to the Yankee Cause. Protecting White Labor. Yankees leased confiscated Cotton lands and Forced Negros back onto the Yankee Plantations. The Trans Mississippi Confederates Financed their war shipping Cotton Thru Mexico. Most of it went to the Yankee.

Federal Government did trade War Material and Food to the Confederacy. It directly extended the War.

So yes, Trade and Cotton was Important. Sherman confiscated 30k bales of cotton in Savannah. He shipped it North. Evidently it hadn’t expired. The Red River Campaign was much about Cotton. Confederates were luring Yankee movements with Cotton. Whole argument that Southern Cotton and or the South had No Economic Effect Is just Bigotry.
 
I recommend Philip Leigh's book - Trading with the Enemy. Leigh is fiercely partisan in favor of the Confederacy, but he does not lie. The extent to which Northerners profited from the contraband trade in cotton is consistently ignored in respectable academic histories; Grant's efforts to control and eliminate the trade along the Mississippi and on the railroads that the Union armies themselves controlled remain the least mentioned part of his Vicksburg campaign. Capturing the city would not, by itself, "cut off" the supplies to the Confederate armies still in the field. Capturing Memphis had done nothing to restrict the sale of cotton north and the shipment of food and war materials south and international currency (gold) south.
One caution: Leigh shares with his ideological opponents - Foner, et. al. - the belief that everything that happened during and after the war was the result of intentional and corrupt policy. If Grant had General Howard organize the runaway slaves and those in the captured territories into paid laborers, it had to be because the New England mill owners wanted the cotton. That it was far better for these people to be able to continue working is a possibility that Leigh does not consider. Grant and many others had the sense to think that gathering people into refugee camps (like those the UN has now been running for 3 generations) would be folly. He also knew that for every bale smuggled north there would be two bales sold at auction with the Treasury actually receiving the money.
 
I recommend Philip Leigh's book - Trading with the Enemy. Leigh is fiercely partisan in favor of the Confederacy, but he does not lie. The extent to which Northerners profited from the contraband trade in cotton is consistently ignored in respectable academic histories; Grant's efforts to control and eliminate the trade along the Mississippi and on the railroads that the Union armies themselves controlled remain the least mentioned part of his Vicksburg campaign. Capturing the city would not, by itself, "cut off" the supplies to the Confederate armies still in the field. Capturing Memphis had done nothing to restrict the sale of cotton north and the shipment of food and war materials south and international currency (gold) south.
One caution: Leigh shares with his ideological opponents - Foner, et. al. - the belief that everything that happened during and after the war was the result of intentional and corrupt policy. If Grant had General Howard organize the runaway slaves and those in the captured territories into paid laborers, it had to be because the New England mill owners wanted the cotton. That it was far better for these people to be able to continue working is a possibility that Leigh does not consider. Grant and many others had the sense to think that gathering people into refugee camps (like those the UN has now been running for 3 generations) would be folly. He also knew that for every bale smuggled north there would be two bales sold at auction with the Treasury actually receiving the money.
Philip Leigh is pro Truth.

People do things for Two Reasons. The reason they tell you and the reason they actually do it for. Leigh explains the actual intent of the Yankee. It wasn’t to help Blacks. Sometimes Blacks got the Benefit, but that wasn’t the original intent.

It was a benefit for Negroes to work. However Lorenzo Thomas’s main objective was to keep Southern Blacks, out of the North. Yankees treated Blacks as Slaves. Forced them onto Plantations. Eventually paid them something. Eventually they escape Slavery. Much to their own devices. Yankees lock them in the South. Refuse Black migration for another Generation. Which contributes to their poverty. So, the Benefit to the Yankee was Cotton and a Homogeneous population. Two of the original reasons to invade the South. And two War Aims.
 
I am old enough to be able to have teased my parents about having had a migratory childhood that proved that birds were smarter than people: "Let me get this straight. We miss the early spring in Alabama and stay in New York City with the grey slush that the cars throw up on the sidewalks and then we go there in August?" What made it more than worthwhile was that I got to watch the last generation of that city's black baseball players. I can remember the summer of 1955 - the year after the Giants won their last Championship in New York - watching Willie McCovey play sandlot ball in a Mobile park. I can also remember how completely race-obsessed some people were. So did McCovey before he died. "In addition to my paper route, I tried working as a bus boy in a whites-only restaurant, but I quit after a week. All the things that make you cringe was normal talk then. You took it or you walked away. I soon found work at a chicken place. I was responsible for washing the chicken parts before they were put out for people to buy."

We are all "pro Truth" until we come across facts that are troublesome. Mr. Leigh has trouble with the fact that there was, in the North, a minority who thought that "race" was irrelevant to the question of how many natural rights a person was entitled to have under a political system. There was no such minority in the South at any time before the 1940s; the most that could be hoped for was "separate and equal". That does not make Northerners inherently more virtuous or Southerners less so; it is simply a fact about the history of the period. It is not even the most important one. But, for Mr. Leigh and Professor Foner and so many others, nothing but "The Negro Question" matters.

Ulysses Grant knew better. He also knew that nothing justified the costs of war; yet once you were in it, there could be only one objective - winning. There was very little to be gained from any debates about intents and aims once people had chosen up sides and become willing to fight. Winning could be the only purpose, and victory could only be measured by how quickly you won and how little both sides - winners and losers - would suffer.
 
I don't follow the reasoning in the Liverpool publication. First an overproduction of cotton goods had been produced for 3 years previous to the Civil War, and this fact carried with it a stoppage of millwork processing raw cotton, therefore keeping the price of goods from plummeting.

I may not be understanding either, but @LetUsHavePeace is showing us American cotton prices went up 400% between 1861 and 1864, payable in British Pounds at Liverpool.

We're supposed to believe this stuff wasn't worth anything to anyone?
 
The stuff - i.e. raw cotton - was worth more and more, as the war went on and the Liverpool prices confirm. The difficult question to answer is how much of the money - i.e. gold and silver coin - was reaching the Confederate hands and being used to arm, clothe and feed the armies and maintain the livestock and railroads in the areas that the Union did not control. I wish I had a better answer to that question than I have right now, which is "Some, but not enough". What I find fascinating is how little is written about the relation between the cotton prices in Liverpool and the greenback's "crisis" in 1864/5. The greenback's problems are always tied to the war news, but I come increasingly to see them as being related to the increasing production of textiles on both sides of the Atlantic combined with much higher prices for the raw material. Add in the bull market in the bribes/stipends for substitutes for the Union draft and you get an interesting supply - demand squeeze. The draft payments had to be in specie, not greenbacks; and the people selling cotton were not going to accept anything less than coin.
 
Excellent post.
At that same time at Murfreesboro in Middle Tennessee, local merchants, according to John Spence, would only accept Yankee dollars.
Because they had to refill their inventories from warehouses in Louisville or St. Louis, where the Greenbacks were the only legal tender available.
 
No one on either side willingly accepted "Greenbacks". They were the one issue of currency by the Union that was pure paper - i.e. it could not even be used to pay taxes. U.S. Notes quickly became acceptable because they were legal tender for the payment of taxes (except for import tariffs which had to be paid in gold or U.S. Treasury bonds). The U. S. Notes were issued by local banks in the North that had switched their charters to the Federal system to avoid the Federal tax on all non-U.S. chartered bank notes. People accepted that currency at a relatively modest discount because the issuers were the same banks that had survived the hard times of the 1850s and the 1857 crash; but for serious dealers in contraband - both buyers and sellers - gold was always the preferred medium of exchange
They could not be used to tariff duties, which were expected to be a source of hard currency. But they certainly could be used to pay all the other various US taxes, of which there many.
At first there was some resistance, and they were never accepted in California until after the war. But they were traded and accepted over a wide area of the Midwest and recovered territory, where they were the primary means of exchange.
 
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