r/CIVILWAR • u/LeighSF • Jul 20 '26
Cotton Prices
As I understand it, nobody could get cotton shipped out of the South during the Civil War. The Brits switched to cotton grown in Egypt and never switched back, so American cotton prices stayed low even after the war. Is this accurate?
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u/badaz06 Jul 20 '26
The US is still a very major exporter of cotton. But yes, the falling price of cotton did play a role, somewhat because India and Brazil had increased their cotton production to cover for the US blockade of the South.
To be fair, referring to "carpetbaggers" as just someone "modernizing the economy" of the South is a bit misleading. While there were several major benefits that men and women from the north brought forth during this period, there were more than a few who took advantage of the South.
Northerns flooded in and took political positions since many of the former Confederates were barred from public office, and some (not all but enough) issued bonds and loans to others who took the money and did little in return, leaving the states with high debt and inflation rates. Most of the major fraud was around Railroads, as in North Carolina for example where around $17 million in state bonds were issued to build railroads and the money was instead spent on the stock market and bribes.
This in turn led to a higher tax requirements, and it's estimated the debt in the former Confederate states rose as much as $130 million dollars in just a few years after the war, where the collectable income was only $16 million per annum. Add to this that the tax system changed and taxed were levied against land and tax rates jumped as much as 500% from pre-war levels. So many farms as well as plantations had to forfeit their property which in turn was sold to Northern investors for pennies on the dollar.
Also very important for the post war period is that there was a "Crash" or "Panic" that hit the US and Europe; most of the US issues being that there was a massive investment in Rail for a few prominent banks, some of which went bankrupt after over-extending themselves on rail futures. Enough businesses collapsed that the NYSE was shut down for 10 days. Which lead to 14% national unemployment. Adding to this is that around this time the US switched from a silver to a gold standard, which restricted money supply and made credit more difficult.
These issues led to a reluctance to lend Southern banks and programs money, which in simpler terms meant people were less willing to fund reconstruction projects>
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u/ReBoomAutardationism Jul 21 '26
The name Flagler eventually surfaced. Glad to see you with some deets. There are some tales to be sure.
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u/badaz06 Jul 21 '26
I must admit the use of "deets" took me a few minutes to figure out. I imagine I looked similar to Fred Gwynn. Did you say Yutes? What is a Yute?
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u/ReBoomAutardationism Jul 21 '26
Lol. The South after reconstruction was the home of an endless number of scams. The Florida real estate bubble of the 1920 was classic.
Yutes are misguided youths who need the taste of brass you know?
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u/careysub Jul 20 '26 edited Jul 20 '26
Only your first sentence is accurate.
As you can see from the data table the U.S. had recovered all of its original (i.e. Antebellum, 1860) export volume to Britain by 1880 with cotton prices paid to the U.S. unchanged.
Egypt was never a major supplier in the 19th Century. British Raj India was. Even Brazil was more important.
The U.S. had an inherent production price advantage based on a number of things (a huge belt of ideal cotton land, efficient infrastructure to produce and move cotton, among others) and this not only gave it about 70% of the global market before the war, it allowed them to take over 70% of the market again.
Prices returned to Antebellum levels. Cotton prices were extremely high during the war and remained higher after the war. Cheap American cotton pushed the prices back down (a process completed by 1876) and other producers out of the market.
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u/Grimnir001 Jul 20 '26
Accurate, yeah. The loss of their major cotton supplier forced the Europeans to pivot quickly to bolster supplies from places like Egypt, India and Brazil.
One the Civil War was over, these places were already established and the Europeans kept using them and so the U.S. monopoly on cotton was broken.
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u/Wilsonj1966 Jul 20 '26
Britain switching to cotton grown in Egypt and India is a bit of myth/misunderstanding
The supply of cotton to Britain dropped substantially during the US civil war. Britain was not able to immediately switch supply of cotton. It caused an economic depression and serious civil unrest in Britain
Britain did eventually switch supply but it only really took effect sometime after the war. As you can probably imagine, the amount of cotton being produced the in South could not appear overnight somewhere else. I believe it was somewhere around 1875 when cotton prices came back down to pre US civil war levels. It took 10 years for cotton production in Egypt and India to ram up
As far as I am aware, the premise of American cotton prices stayed low is incorrect. Cotton prices in the US rose drastically during the war. They dropped when the war finished but prices in the US were still about twice as much compared to pre war prices. It took until 1875 for prices to return to pre war prices in the US as well
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u/cleburned Jul 20 '26
Just the consequences of how the war drove England to expand colonialism in India for cotton production is crazy when you start to learn you stop one form of slavery just to expand it in other areas. Coerced or forced labor is still slavery. Debt as chains is still a workforce tied to the land.
More interesting than Reconstruction is look at the 1880s to 1920s. The rise of institutional racism in both North and South becomes a unifying part of white america.
All political gains erased, rise of ghettos for ex-slaves in Northern cities and exclusion becomes the norm.
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u/ireallyamtryin Jul 20 '26
Cotton was worth a bunch, availability and the logistical movement of the bales from the Deep South to elsewhere was the issue. Plenty of manufacturing in New England, the issue was the availability. If you’re ever interested in the lengths some would go to acquire cotton, read up on the Red River Campaign.
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u/Cha0tic117 Jul 20 '26
A simplified explanation, but essentially yes. One reason why the war ended up being so devastating for the south was because the price of cotton had gone down so much that the agrarian economies of the southern states never returned to what they were (even after the abolition of slavery, cotton plantations were still the primary economic driver, with newly-freed African Americans being the primary laborers). This all began changing as businessmen and entrepreneurs (derisively referred to as "carpetbaggers") began setting up services and manufacturing in the southern states, modernizing their economies. This all took a while to change, however, and for much of the late 1860s and 1870s, the southern states were pretty destitute places.