CHAPTER X. KING COTTON
"The immediate result of the American war was, at this time,
to relieve the English cotton trade, including the dealers in
the raw material and the producers and dealers in
manufactures, from a serious and impending difficulty. They
had in hand a stock of goods sufficient for the consumption
of two-thirds of a year, therefore a rise in the price of the
raw material and the partial closing of their establishments,
with a curtailment of their working expenses, was obviously
to their advantage. But to make their success complete, this
rise in the price of cotton was upon the largest stock ever
collected in the country at this season. To the cotton trade
there came in these days an unlooked for accession of wealth,
such as even it had never known before. In place of the hard
times which had been anticipated, and perhaps deserved, there
came a shower of riches."
This was written of the situation in December, 1861. A similar analysis, no doubt on the explanations offered by his English friends, of "the question of cotton supply, which we had supposed would speedily have disturbed the level of their neutral policy" was made by Mason in March, 1862. "Thus," he concluded, "it is that even in Lancashire and other manufacturing districts no open demonstration has been made against the blockade." Manufactures other than cotton were greatly prospering, in particular those of woollen, flax, and iron. And the theory that the cotton lords were not, in reality, hit by the blockade - perhaps profited by it - was bruited even during the war. Blackwood's Magazine, October, 1864, held this view, while the Morning Post of May 16, 1864, went to the extent of describing the "glut" of goods in 1861, relieved just in the nick of time by the War, preventing a financial crash, "which must sooner or later have caused great suffering in Lancashire."
Arnold's generalization has been taken to prove that the immediate effect of the Civil War was to save the cotton industry from great disaster and that there immediately resulted large profits to the manufacturers from the increased price of stocks on hand. In fact his description of the situation in December, 1861, as his own later pages show, was not applicable, so far as manufacturers' profits are concerned, until the later months of 1862 and the first of 1863. For though prices might be put up, as they were, goods were not sold in any large quantities before the fall of 1862. There were almost no transactions for shipments to America, China, or the Indies. Foreign purchasers as always, and especially when their needs had just been abundantly supplied by the great output of 1858-60, were not keen to place new orders in a rising and uncertain market. The English producers raised their prices, but they held their goods, lacking an effective market. The importance of this in British foreign policy is that at no time, until the accumulated goods were disposed of, was there likely to be any trade eagerness for a British intervention in America. Their only fear, says Arnold, was the sudden opening of Southern ports and a rush of raw cotton, a sneer called out by the alleged great losses incurred and patriotically borne in silence. Certainly in Parliament the members from Lancashire gave no sign of discontent with the Government policy of neutrality for in the various debates on blockade, mediation, and cotton supply but one Member from Lancashire, Hopwood, ever spoke in favour of a departure from neutrality, or referred to the distress in the manufacturing districts as due to any other cause than the shortage in cotton caused by the war.