The Unraveling of the Cotton Kingdom

Kathryn Boodry

This paper argues that the diminishing importance of cotton to Anglo-American financiers after 1848 resulted in a loss of power for cotton planters in the antebellum United States, and contributed to the outbreak of the Civil War. Southern planters and Unionists alike were unable to find effective sources of international funding for their war efforts precisely because of the relative strengths each possessed, and the fact that neutrality entailed the least risk for other nation-states as well as financial houses. The end result, the Erlanger loan for the confederacy, and a union war effort funded primarily with domestically raised capital resulted in marked alterations to the American financial system.