Empire of Cotton

by Sven Beckert

  Chapter Nine

  A War Reverberates Around the World

  Viewed from abroad, cotton was central to the American struggle: Punch comments on the American Civil War. (illustration credit 9.1)

  A crisis illuminates best the foundations of the global empire of cotton. The American Civil War was such a crisis. By the time shots were fired on Fort Sumter in April 1861, cotton was the core ingredient of the world’s most important manufacturing industry. The manufacture of cotton yarn and cloth had grown into “the greatest industry that ever had or could by possibility have ever existed in any age or country,” according to the self-congratulatory but essentially accurate account of British cotton merchant John Benjamin Smith. By multiple measures—the sheer numbers employed, the value of output, profitability—the cotton empire had no parallel. One author boldly estimated that in 1862, fully 20 million people worldwide—one out of every sixty-five people alive—were involved in the cultivation of cotton or the production of cotton cloth. In England alone, which still counted two-thirds of the world’s mechanical spindles in its factories, the livelihood of between one-fifth and one-fourth of the population was based on the industry; one-tenth of all British capital was invested in it, and close to one-half of all exports consisted of cotton yarn and cloth. Whole regions of Europe and the United States had come to depend on a predictable supply of cheap cotton. Except for wheat, no “raw product,” so the Journal of the Statistical Society of London declared, had “so complete a hold upon the wants of the race.”1

  The industry that brought great wealth to European manufacturers and merchants, and bleak employment to hundreds of thousands of mill workers, had also catapulted the United States onto center stage of the world economy, building “the most successful agricultural industry in the States of America which has been ever contemplated or realized.” Cotton exports alone put the United States on the world economic map. On the eve of the Civil War, raw cotton constituted 61 percent of the value of all U.S. products shipped abroad. Before the beginnings of the cotton boom in the 1780s, North America had been a promising but marginal player in the global economy. Now, in 1861, the flagship of global capitalism, Great Britain, found itself dangerously dependent on the white gold shipped out of New York, New Orleans, Charleston, and other American ports. By the late 1850s, cotton grown in the United States accounted for 77 percent of the 800 million pounds of cotton consumed in Britain. It also accounted for 90 percent of the 192 million pounds used in France, 60 percent of the 115 million pounds spun in the Zollverein, and 92 percent of the 102 million pounds manufactured in Russia.2

  The reason for America’s quick ascent to market dominance was simple. The United States more than any other country had elastic supplies of the three crucial ingredients that went into the production of raw cotton: labor, land, and credit. As The Economist put it in 1861, the United States had become so successful in the world’s cotton markets because the planters’ “soil is marvelously fertile and costs him nothing; his labour has hitherto been abundant, unremitting and on the increase; the arrangements and mercantile organizations for cleaning and forwarding the cotton are all there.”3 By midcentury, cotton had become central to the prosperity of the Atlantic world. Poet John Greenleaf Whittier called it the “Haschish of the West,” a drug that was creating powerful hallucinatory dreams of territorial expansion, of judges who decide that “right is wrong,” of heaven as “a snug plantation” with “angel negro overseers.”4

  Slavery stood at the center of the most dynamic and far-reaching production complex in human history. Herman Merivale, British colonial bureaucrat, noted that Manchester’s and Liverpool’s “opulence is as really owing to the toil and suffering of the negro, as if his hands had excavated their docks and fabricated their steam-engines.” Capital accumulation in peripheral commodity production, according to Merivale, was necessary for metropolitan economic expansion, and access to labor, if necessary by coercion, was a precondition for turning abundant lands into productive suppliers of raw materials.5

  Whether celebrating the material advances generated from slavery or calling for slavery’s abolition, many contemporaries agreed by the 1850s that global economic development required physical coercion. Karl Marx sharpened the arguments made all around him by concluding in 1853 that “bourgeois civilization” and “barbarity” were joined at the hip. But such an argument was simply common sense in elite circles. French geographer Élisée Reclus, writing in the Revue des Deux Mondes, for example, came to essentially the same conclusion: “The industrial prosperity of England appears to be intimately tied to the progress of slavery.” Southern planters agreed passionately: Cotton, and thus slavery, were indispensable to the modern world, the very foundation of the United States’ and Europe’s astonishing material advances. As South Carolina senator and cotton planter James Henry Hammond put it famously on the floor of the Senate, “England would topple headlong and carry the whole civilized world with her” if the system of slave-powered cotton growing would be threatened. “No power on earth dares to make war upon it. Cotton is king.”6

  Slavery enabled the stunning advances of industry, and the accompanying profit. Contemporaries, however, worried that this vast and sparkling machine was merely a façade, amplifying the long-standing European worries about the political stability of the United States that we have encountered earlier. As “an industry tributary to foreign countries,” observed British political economist Leone Levi, the European cotton industry was potentially vulnerable, even though its well-being, according to a French observer, had “become a question of life or death for tens of thousands of workers, a question of prosperity or misery for all the developed industrial countries.”7

  Most important, slavery itself seemed potentially hazardous to stability—a “treacherous foundation,” as the Manchester Cotton Supply Association put it—not just because of the sectional tensions it generated in the United States, but also because slaves could resist and even rebel: “The system of slave labour was not to be safely trusted,” the association declared in 1861. “The dread of slave insurrection and civil discord,” the Cotton Supply Reporter complained, was ever present. Even the London money market reflected these concerns, as bonds for southern railroads carried higher interest than those for northern roads. “This mistrust arises,” reported the Westminster Review in 1850 “from a shrewd calculation of the dangers, in both a moral and physical sense, which hang over a state of society whose foundations are laid in injustice and violence.”8

  American slavery had begun to threaten the very prosperity it produced, as the distinctive political economy of the cotton South collided with the incipient political economy of free labor and domestic industrialization of the North. In addition, the violent expansion of both these economies westward brought crisis after crisis to their nascent national institutions.9 Ample supplies of fertile land and bonded labor had made the South into Lancashire’s plantation, but by 1860 large numbers of Americans, especially in the northern states, protested such semicolonial dependence. They, in time, sparked a second American revolution. Fearing for the security of their human property, southern slave owners struck out on their own, gambling that their European partners would intervene to preserve the world economy and with it their own exceptionally profitable role. Southern planters understood that their cotton kingdom rested not only on plentiful land and labor, but also upon their political ability to preserve the institution of slavery and to project it into the new cotton lands of the American West. Continued territorial expansion of slavery was vital to secure both its economic, and even more so its political viability, which was threatened as never before by an alarmingly sectional Republican Party. Slave owners understood the challenge to their power over human chattel represented by the new party’s project of strengthening the claims of power between the national state and its citizens—an equally necessary condition for its free labor and free soil ideology.

  Yet from a global perspective, the outb
reak of war between the Confederacy and the Union in April 1861 was a struggle not only over American territorial integrity and the future of its “peculiar institution,” but also over global capitalism’s dependence on slave labor across the world. The Civil War in the United States was an acid test for the entire industrial order: Could it adapt to the even temporary loss of its providential partner—the expansive, slave-powered antebellum United States—before social chaos and economic collapse brought their empire to ruins? As John Marshman, editor of the Baptist missionary newspaper Friend of India, observed in March 1863, “It may be said that the prosperity of the South has been based on the gigantic crime of holding three or four millions of human beings in a state of slavery, and it is difficult to divest the mind of the conviction that the day of reckoning from the throne of the Eternal has come.”10

  The day of reckoning arrived on April 12, 1861. On that spring day, Confederate troops fired on the federal garrison at Fort Sumter, South Carolina. It was a quintessentially local event, a small crack in the world’s core production and trade system, but the resulting crisis illuminated brilliantly the underlying foundations of the global cotton industry and with it of capitalism. Columbia University political scientist Francis Lieber predicted “neither cotton nor slavery will come forth from this war as they went into it.” With its shocking duration and destructiveness, the American struggle marked the world’s first truly global raw materials crisis, and proved midwife to the emergence of new global networks of labor, capital, and state power. Thus one of the most important chapters in the history of global capital and labor unfolded on the battlefields of provincial North America.11

  The outbreak of the Civil War severed in one stroke the relationships that had underpinned the worldwide web of cotton production and global capitalism since the 1780s. In an effort to force British diplomatic recognition, the Confederate government banned all cotton exports. By the time the Confederacy realized this policy was doomed, a northern blockade effectively kept most cotton from leaving the South. Though smuggling persisted, and most smugglers’ runs succeeded, the blockade’s deterrent effects removed most cotton-carrying ships from the southern trade. Consequently, exports to Europe fell from 3.8 million bales in 1860 to virtually nothing in 1862. The effects of the resulting “cotton famine,” as it came to be known, quickly rippled outward, reshaping industry—and the larger society—in places ranging from Manchester to Alexandria. With only slight hyperbole, the Chamber of Commerce in the Saxon cotton manufacturing city of Chemnitz reported in 1865 that “never in the history of trade have there been such grand and consequential movements as in the past four years.”12

  A mad scramble ensued. The effort was all the more desperate as no one could predict when the war would end and when, if ever, cotton production would revive in the American South. “What are we to do,” asked the editors of the Liverpool Mercury in January 1861, if “this most precarious source of supply should suddenly fail us?” Once it did fail, this question was foremost on the minds of policy makers, merchants, manufacturers, workers, and peasants around the globe.13

  At first, the panic of European cotton manufacturers was allayed by the fact that cotton imports in the previous few years had been extremely high, leaving sufficient stocks in major ports and factories for the coming months or even a year. Yarn and cloth markets from Buenos Aires to Calcutta, moreover, were glutted. With initial expectations that the war would be short, cuts in cotton exports from the American South meant rising prices for the stock at hand, which holders of cotton and cotton goods welcomed. Looking back at the early months of the war, Moskva, the voice of Moscow’s industrialists, reported that the conflict at first helped “rid us of our own crisis in the cotton industry, which was about to erupt” due to overproduction.14

  Eventually, however, dwindling supplies and rising prices began to paralyze production. In the late summer of 1861, Charles Francis Adams, the U.S. ambassador to England, wrote to his son Henry that “this cotton question is beginning to pinch.” By early 1862, as total imports of cotton into Britain fell by a little over 50 percent compared to the previous year, and imports from the United States by 96 percent, mills began shutting down for a few days each week, or entirely. Cotton prices had quadrupled from their prewar levels and, consequently, manufacturers closed shops and tens of thousands of operatives found themselves out of work. As early as November 1861, Lancashire manufacturers had shut 6 percent of their factories and introduced shorter shifts in two-thirds of them. By early 1863, a quarter of the inhabitants of Lancashire—more than half a million individuals—were out of work, receiving some form of public or private assistance. Weaver John O’Neil, who lived in Low Moor Mill in Lancashire, described his plight in his diary: “Sad and weary…and can hardly keep myself living.” In response to such misery “Unemployed Operatives” sent memorials to the Home Office, demanding relief.15

  By 1863, unemployed workers rioted in the streets of several British cotton towns, underscoring the explosive social consequences of the cotton famine. The home secretary received requests from town authorities for information on “how the military are to be obtained if required in any future Emergency.” Troops were soon stationed. Even cotton merchant William Rathbone reported to his son in the spring of 1862 that “the distress among the Poor here and in the Manufacturing districts is great, and I fear on the increase.” So serious was the crisis that thousands of miles from Europe the merchants of the Bombay Chamber of Commerce collected funds “in aid of the distressed mill hands of Lancashire.” “Anxiety” and “apprehension” began to spread.16

  Similar crises unfolded on the European continent. In France, manufacturers closed mills because they could not afford high cotton prices as imports of U.S. cotton fell from more than 600,000 bales in 1860 to 4,169 in 1863. The effect was especially severe on manufacturers of coarse cottons, such as the ones in Normandy, for whom the price of cotton determined much of the total price of production. By 1863, three-fifths of the looms in Normandy were idle, while in the districts of Colmar and Belfort, where higher-quality cottons were produced, 35 percent of all spindles and 41 percent of all looms remained unused. That same year, a French national relief committee estimated that a quarter million textile workers were unemployed. In the textile towns of Alsace posters went up proclaiming, “Du pain ou la mort” (Bread or death).17

  Lesser cotton centers also experienced severe distress: In the German lands of the Zollverein, imports of raw cotton fell by about 50 percent between 1861 and 1864 and hundreds of factory owners sent their workers home. Of the approximately three hundred thousand people engaged in the cotton industry in Saxony alone, one-third had lost their jobs by the fall of 1863, while the rest worked much shorter hours. In the northern part of the United States, removed from battle itself but not its consequences, tens of thousands of cotton workers lost employment, but the social effects were less severe because many found employment in the booming woolen mills that produced clothing for the Union army, or enlisted. In Moscow, however, 75 percent of all cotton spinning operations had shut down by 1863. Workers and manufacturers would have agreed with the U.S. consul in the German city of Stettin that “this war and its consequences stands before the whole civilized world as an interposing fate, which no nation however insignificant its direct relations to the field of contest may be, can entirely avoid.”18

  While manufacturers closed mills and spinners and weavers suffered, cotton merchants lived—for a brief time—through a golden age. Rising prices for cotton led to a frenzy with “doctors, parsons, lawyers, wives and widows, and tradesmen speculating in it.” Cotton shipments changed hands many times between speculators before being delivered to factories; with each exchange a small profit could be made. Baring Brothers, confirmed in the summer of 1863 that the “amount of money made and still making in this article is almost fabulous; for three years or more not a bale has arrived from India but has paid profit and mostly a large one.” Liverpool cotton brokers gained
as well from the presence of many speculators in the market (resulting in many transactions), and also rising prices (their commissions were a percentage of the value). In 1861, the total value of cotton imports had been £39.7 million and in 1864 it had reached £84 million, despite a much-reduced volume.19

  As price volatility and speculation spread, so too did traders’ efforts to institutionalize speculative market transactions, especially forward selling. By 1863, the Liverpool Cotton Brokers’ Association had created a standard form that could be used by merchants making contracts about the future delivery of cotton, and Liverpool newspapers began reporting forward prices of Indian cotton. That year, “time bargains” had even begun to be established in Bombay, providing new opportunities for “men afflicted with a passion for gambling.” The war, in fact, resulted “in a revolutionary modernization of trade” in which the establishment of a formal futures market was perhaps the most important element.20

  While merchants and speculators benefited from the global scramble for cotton, manufacturers loudly and frantically demanded the opening of new sources of the fiber. In France, factory owners from different cotton manufacturing regions continuously pressured the imperial government. “It is therefore urgently necessary to develop…new fields of production,” wrote the Chamber of Commerce of the city of Rouen. In 1862 a group of cotton manufacturers from Senones in the Vosges appealed to Napoleon III to bring Chinese workers to Algeria to grow cotton there. That year, cotton manufacturer Jacques Siegfried presented a “memoir” to the Société Industrielle de Mulhouse to advocate cotton growing in Algeria, supported by the Chamber of Commerce in Mulhouse: “No colonization for cotton, cotton for colonization.” When Antoine Herzog, a wealthy Alsatian cotton manufacturer, sat down in 1864 to pen a book on L’Algérie et la crise cotonnière, he hoped that France would recognize that it was “at the mercy of the political vicissitudes of a single people,” and therefore needed to “develop…by all possible means the cotton culture of countries that are capable of producing [it], and, in a special way, in our colonies.” Herzog personally pleaded with Napoleon for an audience to have him support colonial cotton-growing efforts and even traveled to Algeria to investigate the opportunities for cotton production there.21