The Cotton Was in the South, the Action Was in the North:
“The explosion of raw material from the South that followed [Eli Whitney’s invention] soon enriched New England’s textile aristocracy whose mills were partially responsible for driving up the number of slaves fivefold between 1800 and 1860. In that year close to four million slaves accounted for nearly 40 percent of the South’s population. Seeking new arable cotton acreage, Southern growers by then had relentlessly expanded westward into virgin territories that would become Texas, Louisiana, Oklahoma and Missouri.
In the Treaty of Ghent, which ended the War of 1812, England and the United States agreed to suppress the slave trade. So much for policy positions. In reality, Baltimore builders designed faster clipper ships to carry and deliver cargoes of slaves for Liverpool’s thriving slave traders. Slave-produced cotton created many of England’s most prestigious banks, including the giants Barclay and Lloyds. Liverpool’s towering skyline of massive Victorian commercial buildings stands as a monument to [slave-produced] cotton supremacy.
[New England] cotton mills were well on their way to producing $115,000,000 worth of cotton by 1860, or three times as much as the country imported, and every ounce of it relied wholly on slave labor. A US Census in 1790 counted nearly 697,124 slaves, with almost as many in New York (21,234) as in Georgia (29,264). Despite the Constitutional ban on further importation in 1808, by 1820 there were 1,533,086 slaves, almost all now in the South, and Virginia alone accounted for 425,757. By then the South produced an astonishing 2.275 billion pounds of raw cotton, and the crop accounted for 60 percent of the country’s exports. The South now supplied over 80 percent of the cotton manufactured in Britain, two-thirds of the world’s total supply, and all the cotton used in New England’s mills.
Cotton was New York’s leading export; the South depended on New York as well as for European home furnishings and high-quality imported fabrics including silks and linens. The irony in all this was that although a New York stopover required ships to travel 200 miles out of their direct lane between Liverpool and Charleston, Savannah and New Orleans, there was no logistical reason for its involvement. “The combined income from interest, commissions, freight, insurance, and other profits were so great that, when Southerners finally awoke to what was happening, they claimed that New Yorkers with a few other Northerners were getting forty cents for every dollar paid for Southern cotton,” one historian reported. Southern States that had fought to win their independence from the British crown now relinquished it economically to the North.
New York did more than ship Southern cotton; it provided much of the funding for it. Hundreds of Yankee cotton factors from New York blanketed the South every year, working with Manhattan banking houses that had the capital to make loans. Acting as independent intermediaries, the factors advanced long credit at high interest against next year’s crop, usually from 7 to 12 percent, and took their cut. Southern banks played a minor role. [Planter] Debt was chronic.
It resulted primarily from the growers’ need to expand their acreage and buy more slaves. That in turn gave financiers from England and New York the power to monitor their operations, squeeze out higher interest rates…bales became payment; they quickly turned into cash as New Yorkers sold that raw cotton to Liverpool to supply Lancashire’s mills. The cotton fields were in the South, but the action was in the North for speculators and businessmen.”
(Cotton, Stephen Yafa, Penguin Books, 2005, excerpts pp. 121-136)