i ABSTRACT Jim Powell – ‘Cotton, Liverpool and the American Civil War’ Before its civil war erupted, America had supplied 80 per cent of the raw material for Britain’s largest industry, the cotton trade. After the outbreak of war in 1861, this fell to almost zero. The purpose of this thesis is to examine what happened to the British raw cotton trade and to the Liverpool cotton market during the American Civil War. Both topics have been largely ignored by historians. Specifically, the investigation covers: a study of the alternative sources of supply, what was done to develop them before and during the war and why the attempts failed; a narrative of the cotton trade during the war in the context of political and public opinion; a quantification of the raw cotton available to Britain during the war and of the proportion of latent demand that could be met; an examination of attitudes and behaviour within Liverpool during the war; and a study of the financial side of the market, covering the the explosion of prices, the activities of speculators and cotton brokers and the business failures at the end of the war. The principal findings are these. There was no realistic alternative to the dominance of American cotton and, in its absence, no possibility of finding an adequate replacement. In consequence, Britain’s production of cotton yarn in the years 1862- 64 was at 46 per cent of the level of the preceding three years and, making a reasonable allowance for lost market growth, at 36 per cent of the requirement. The near-unanimous belief of historians that the Lancashire cotton famine was wholly or mainly caused by an over-production of cotton goods before the war is examined in detail, and is flatly contradicted by the evidence. Another accepted historical opinion, that Liverpool and its cotton traders overwhelmingly supported the Confederacy, is shown to be a great exaggeration. The reality was more subtle and more diverse but, at the very least, Liverpool strongly supported neutrality and non-intervention. More detail on the activities of Liverpool’s cotton traders, and in particular the brokers, is provided than has ever previously been published. The conclusion is that the brokers, especially those who sold on behalf of importers, were the real power in the market, more so than their clients. The orgy of speculation in cotton during the war is laid bare, as is the role of brokers within it, and the fury that this provoked in Manchester. Liverpool’s cotton brokers are shown to have had massive conflicts of interest, to have enriched themselves while much of Lancashire starved, and to have shown an almost complete indifference to the wider cotton trade. The civil war would have been a calamity for Britain’s cotton trade in any event. What happened on the Liverpool market simply made it worse. ii CONTENTS Abstract i Acknowledgements iii Tables and figures iv Abbreviations vi 1. FEAST AND FAMINE 1 An introduction to Britain’s cotton trade on the eve of the war 2. THE SATURDAY AFTERNOON SYNDROME 29 Why nothing was able to replace American cotton 3. A THREE-PHASE SUPPLY 59 How the cotton trade reacted to the civil war 4. THE UNFATHOMED PIT OF RAW COTTON 86 Quantifying the scale of the cotton scarcity 5. THE UNCHARTED MOUNTAIN OF COTTON GOODS 115 Why the cotton famine was not caused by pre-war over-production 6. LIVERPOOL, LOUISIANA? 142 The town’s contradictory response to the civil war 7. A TOLL BOOTH ON THE MERSEY 172 How Liverpool enriched itself at Manchester’s expense 8. THE BROKERS AND THE BROKEN 201 The nearest truth about Liverpool’s cotton brokers 9. FAMINE AND FEAST 232 Conclusions on Britain’s cotton trade during the war APPENDICES 1. Notes on statistical sources 239 2. Recipients of raw cotton at Liverpool 244 3. Bankruptcies of cotton brokers 250 4. Post-war biographical notes 252 BIBLIOGRAPHY 256 iii ACKNOWLEDGEMENTS I owe a great debt to Dr Richard Huzzey, now of Durham University, who was brave enough to take me on as a post-graduate student at the University of Liverpool and who gently re-educated me in the ways of academia after a lapse of more than forty years. Richard was my primary supervisor in the early years of this thesis, and has continued to be an invaluable mentor from the banks of the Wear. I am also grateful to Dr William Ashworth of Liverpool, who took on the role of primary supervisor after Richard had moved to Durham, and who has guided the thesis enthusiastically through to its completion. Dr Graeme Milne of Liverpool has been my secondary supervisor throughout, as well as the source of much essential material on the commercial history of the port. My three supervisors could not have offered a more complete balance of historical interests and experience, as reflected in their published works quoted here. This thesis would not have been possible without them. I would also like to thank Lucy Kilfoyle for sharing her research on the Porcupine. Many libraries and their staff have offered essential assistance to my research. I would like to thank in particular the Sydney Jones Library at the University of Liverpool, the Search Room at Liverpool Central Library, the Archive Room at the Merseyside Maritime Museum, the Library of the Athenaeum Club, Liverpool, the John Rylands Library, Manchester, the British Library, the Cambridge University Library, the Bodleian Library, Oxford, and the Joule Library, Manchester. Finally, by way both of acknowledgement and of a declaration of interest, I would like to thank my great-great-grandfather, William Mayne Neill, and his brother, Henry Montgomery Neill – the Neill brothers of this thesis. It was the discovery of their part in the cotton trade during the American Civil War and after it that set me off on the road that has led to here. Jim Powell, October 2018 iv TABLES AND FIGURES TABLES page 1.1 British Raw Cotton Imports, 1853-60 10 2.1 Source of British Raw Cotton Imports, 1857-68 53 2.2 Long-Term Share of British Raw Cotton Imports, 1840-1900 57 4.1 British Raw Cotton Imports, 1860-67 94 4.2 British Raw Cotton Re-Exports, 1856-67 95 4.3 Raw Cotton Available to British Spinners, 1856-67 100 4.4 British Yarn Production, 1856-67 105 4.5 Manufacturing Costs and Margins, 1856-66 111 5.1 British Exports of Cotton Goods, 1860-66 126 5.2 Stocks of Cotton Goods, 1856-66 127 5.3 Quarterly Sales, Stocks and Price of Raw Cotton, 1858-61 129 5.4 Estimated Consumption Deficit of British Cotton, 1861-67 139 7.1 Value of British Raw Cotton Imports, 1858-67 180 7.2 The Role of Speculation in Raw Cotton Sales, 1858-67 181 8.1 The Effect of the Civil War on Raw Cotton Consignments, 216 1860 and 1864 8.2 Non-Broker Recipients of Cotton Consignments, 1860 and 218 1864 8.3 Cotton Received by Members of the Liverpool Cotton 221 Brokers Association, 1860 and 1864 v FIGURES page 1.1 British Raw Cotton Consumption and Prices, 1800-1900 8 2.1 British Imports of Indian Cotton and its Liverpool Price, 47 1859-67 3.1 Weekly Movement of Raw Cotton Prices in Liverpool, 1861- 61 65 3.2 Collapse of Cotton Imports from America, August 1861 67 4.1 Weekly Raw Cotton Stocks, 1861-65 107 4.2 British Stock Cover at Current Production Level, 1861-65 107 4.3 Calculated Spinning Volume, 1861-66 109 5.1 British Production of Cotton Yarn and Cloth, 1853-61 123 5.2 British Exports of Cotton Yarn and Cloth, 1853-61 124 5.3 The Unfilled Demand for Yarn, 1861-67 140 6.1 Volume through the Port of Liverpool, 1854-66 153 6.2 Liverpool Port Dues, 1854-66 153 7.1 Rough Value of British Raw Cotton Imports, 1800-1900 179 7.2 Minimum Commission Earnings of Cotton Brokers, 1858-67 194 7.3 Sales of Raw Cotton to British Spinners, 1858-67 195 8.1 Recorded Liverpool Cotton Broking Firms, 1864 211 vi ABBREVIATIONS Sources in the tables and figures ABHS B. Mitchell with P. Deane, Abstract of British Historical Statistics (Cambridge University Press, 1962) CBE Custom Bills of Entry, Liverpool B Bills ED Ezekiel Donnell, The Chronological and Statistical History of Cotton (New York: James Sutton & Co., 1872) GH George Holt & Co., annual Cotton Circular for 1866 (National Archives, LCBA Records 380 COT/1/11/71) JP John Pender & Co., Statistics of the Trade of the United Kingdom with Foreign Countries from 1840 (London: Simpkin, Marshall, 1869) MDHB Mersey Docks & Harbour Board MW Maurice Williams, Seven Years' History of the Cotton Trade of Europe (Liverpool: William Potter, 1868) PP House of Commons, Parliamentary Papers, Statistical Abstract for the United Kingdom in each of the Last Fifteen Years (various years) TE Thomas Ellison, The Cotton Trade of Great Britain (London: Effingham Wilson, 1886); Ellison & Haywood, annual Cotton Circulars for 1865-66 (National Archives, LCBA Records 380 COT/1/11/70-71) Other abbreviations BNA British Newspaper Archive CC Cotton Circular CSA1 Cotton Supply Association EIC East India Company JRL, OTEA John Rylands Library, Archive of the Oldham Textile Employers' Association [L]CBA [Liverpool] Cotton Brokers’ Association LRO Liverpool Record Office NA National Archives ODNB Oxford Dictionary of National Biography __________________________________________________________________________ 1 It is unhelpful that three relevant organisations have the initials CSA. In this thesis, the Cotton Supply Association alone is shortened to the CSA. The Cotton Spinners’ Association is referred to as the Spinners’ Association, and the Confederate States of America as the Confederacy.