A Three-Phase Supply

This chapter describes the three phases of the war as experienced by the British cotton trade. The first phase (November 1860 to end June 1862) was characterised by a complacency in the trade, which expected neither a civil war nor a cotton scarcity. The Confederacy’s King Cotton strategy and its failure are examined, as well as British public opinion and British government policy. During the second phase (July 1862 to end August 1864), the full scale of the catastrophe was belatedly recognised and prices soared. Cotton speculation in the Liverpool market became endemic. A price collapse in September 1864 marked the end of the phase. Thereafter, confusion was widespread and prices oscillated violently, as did speculation. This third phase arguably lasted until 1876. The chapter concludes that the civil war period in Liverpool can best be seen as an extended series of bets on whether a war would start and how long it would last.