Re:Jeff Davis - Cotton Embargo
- --- In civilwarwest@y..., "aot1952" <wakefield1952@m...> wrote:
> Thank you very much for your attempt to educate me regarding
> international trade. I think I understand the correspondent bank
> concept and ledger 'credits' a little better now.
> I am still a little unclear how private citizens actions in selling
> or not selling their cotton directly impacts upon a government's
> accumulated credits. Other than the governemnts acquisition of
> wealth thru taxation upon the 'sales' tranaction how else does the
> governement acquire wealth or credit from such activity?
> Further, I would request from those who have cited Davis' Cotton
> Embargo as his greatest error, to please explain to me the terms
> and operation of this embargo and where I might read the contents
> of this Executive Order or legislative action.
When each nation's balance of payments (debits/credits) are tallied
by the correspondent banks (today I believe once a month), any
deficits have to be offset by a transfer of reserves (such as gold,
silver, etc.)through the various central banks, or else by a loan
that is extended to allow time for more exports to balance the
account. Even though the South had very little in the way of
reserves this would not have been a problem for them early on because
if large amounts of cotton had in fact been exported, the South's
balance of payments would have been a credit. So the importing
nations (Gr.Brit, France, etc.), would have to transfer reserves to
the South's foreign accounts, or would have had to increase their
exports to the South either through private industry trade or
government trade. Since the South mainly wanted weapons and other
war supplies, this is what would have been shipped. Once the shoe
was the on the other foot (the South importing war goods and ending
up with a deficit) then the Confed. government would have to transfer
reserves or come up with more cotton to export. Hope this helps!
I'm sure your comment about an Exec.Order or enacted legislation is
tongue-in-cheek. The "Cotton Embargo" was a voluntary, self-imposed
act that the government leaders were highly encouraging the planters
to do. Actually, the government was quite successful in encouraging
planters to switch to crops to help feed the armies. In the end, it
was the South's lack of transportation, lost supply routes, and total
mismanagement that caused it's armies (and prisoners) to practically
starve. I believe Sherman was said to be most grateful to Jeff Davis
for his successful efforts as he was marching through Georgia.